The Best Stocks of the Millennium

What have been the best stocks to own in this new millennium, by all accounts the most Britney-filled of all the millennia on record so far? And what, if anything, can we learn by simply running a couple of quick computer screens to find the answer?

The results are different from any predictions that I recall seeing or hearing when we said goodbye to the old millennium, which, for the purposes of this column (and acknowledging arguments to the contrary), we'll assume ended on Dec. 31, 1999. This was supposed to be the decade, century, and millennium of Internet shopping, online brokers, biotech, renewable fuels, regenerating limbs, and every other visionary departure from the mundane and antiquated mechanisms that got us through the dark and uneducated times known as the 20th century.

The runners-up ...
In terms of what companies have grown sales the most this century, a lot of those forward-looking companies have indeed been awesome. Unfortunately, they haven't been nearly awesome enough to translate into rewards for late-1999 purchasers of their stocks. Just take a look at the returns from these companies, which have grown sales by more than 20% annually for the past seven-plus years and had sales of at least $100 million already in 1999.

Company

Total Revenue
CAGR, 1999 Through Sept 2007

Total Revenue,
1999

Stock Price
Change Since

Biovail (NYSE:BVF)

24.6%

$172.5

(46%)

EchoStar Communications

27.9%

$1,602.8

(41%)

HLTH (NASDAQ:HLTH)

26.1%

$102.1

(68%)

King Pharmaceuticals

20.1%

$512.5

(61%)

Dollar amounts in millions. Data from Capital IQ.

These companies are by no means failures. Look at those compounded seven-year growth rates! EchoStar, for example, is the nation's third-largest pay-TV provider, with more than 13 million subscribers. Nevertheless, by the time the end of 1999 rolled around, it had expectations embedded in its stock price that required even more growth than it achieved.

And the winners are ...
So what has done well this millennium? Done well? Forget that! What's done the best?

I ran a screen for the best-performing stocks of the millennium, with the caveat that they had to have share prices of $5 or more at market close on Dec. 31, 1999.

A few companies at the top of the list are household names. Apple (Nasdaq: AAPL  ) , for example, has enjoyed this millennium immensely, as has health-care provider Humana (NYSE: HUM  ) .

But you'll also see some big winners you may not know. Take a look:

Company

Product

1999 Market Cap

Price Change
This Millennium

ITT Educational Services (NYSE:ESI)

For-profit education

$382

1,003%

Covance (NYSE:CVD)

Drug development services

$631

770%

Steel Dynamics (NASDAQ:STLD)

Steel & iron

$764

539%

Dollar amounts in millions. Data from Capital IQ.

Other industries represented near the top of the list included slot machines, pool supplies, and trucking.

There's nothing special about those results or this particular time frame; the same thing would be shown in nearly any randomly chosen longer-term time frame, including 50- or 60-year periods. When Jeremy Siegel set out to study what companies had been the best investments out of the original S&P 500 lineup over the period from 1957 to 2003, he found that the No. 2 and No. 3 companies started out as producers of glass and cans.

The Foolish conclusion
What many of the Millennial Winners have in common is that they were small, established, profitable companies producing things that had worked for decades ... largely ignored things ... things that don't usually create headlines or dreams of quick riches.

Of course, that's the point. The better-performing companies of nearly any time period are going to be the ones that don't have fanciful expectations built into their stock prices, but rather have a demonstrated history of being able to succeed as tastes, technologies, and markets change.

These are the kinds of companies we look for in Motley Fool Hidden Gems -- small, ignored companies doing unappreciated, profitable things. It's worked out so far for us, and the strategy has produced total average returns of 26%, versus 16% for the S&P 500.

If you'd like to learn more about our service, a free, no-risk 30-day guest pass to Hidden Gems is yours for the taking.

This article was originally published on Sept. 18, 2006. It has been updated.

Bill Barker does not own any stocks mentioned in this article. The Motley Fool has a disclosure policy.


Read/Post Comments (0) | Recommend This Article (4)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

DocumentId: 558430, ~/Articles/ArticleHandler.aspx, 4/19/2014 3:24:44 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 1 day ago Sponsored by:
DOW 16,408.54 -16.31 -0.10%
S&P 500 1,864.85 2.54 0.14%
NASD 4,095.52 0.00 0.00%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

4/17/2014 4:00 PM
AAPL $524.94 Up +5.93 +1.14%
Apple CAPS Rating: ****
BVF.DL $0.00 Down +0.00 +0.00%
Biovail Corp (USA) CAPS Rating: ***
CVD $96.97 Down -0.93 -0.95%
Covance, Inc. CAPS Rating: ****
ESI $26.58 Down -0.11 -0.41%
ITT Educational Se… CAPS Rating: **
HLTH.DL $0.00 Down +0.00 +0.00%
HLTH Corp CAPS Rating: ***
HUM $104.74 Down -4.06 -3.73%
Humana, Inc. CAPS Rating: ***
STLD $18.00 Down -0.90 -4.76%
Steel Dynamics, In… CAPS Rating: ***

Advertisement