We may all want to get rich quick, but smart investors understand that "slow and steady" wins the race. Just as you don't start off as a CEO, but have to work your way up the company ladder, having as a goal the chance to hit it big on a stock is not a reasonable way to look at the stock market. You're more likely to lose it all than to be the bigwig.
Still, sometimes some stocks do reward investors with monumental returns in a very short span of time, so while you shouldn't seek out such opportunities, they're nice when they fall into your lap...or your portfolio. Shopify (SHOP 3.62%), Cara Therapeutics (CARA -2.20%), and Clovis Oncology (CLVS -0.90%) are examples of three such stocks; each turned $8,000 into at least $25,600 in just one year.
Shopify (up 220.5%)
The fast-growing e-commerce platform for small- and mid-size businesses has been on a tear for more than a year, seemingly able to do no wrong. By giving such companies a simple, seamless, and secure platform to conduct business and meet the expectations of consumers who demand transactions anywhere, anytime, on any device, Shopify's vehicle for establishing web-based and mobile storefronts has been a hit.
In its first-quarter earnings report, Shopify saw its subscription-based revenue jump 60% from last year as more merchants began using its services, while its merchant solutions revenue -- from processing payments and the like -- nearly doubled. That was the result of more businesses using its platform, but also from moving into new markets and having more businesses adopt its payment-processing service.
The stock has responded in kind, more than doubling in value since the start of 2017, but tripling in value over the last 12 months. An $8,000 investment in Shopify a year ago would be worth $25,637 today. Can it keep going? It does trade at some heady multiples, and analysts are beginning to think shares are due for a breather, but the business itself appears solid; Shopify should continue to be a long-term winner.
Cara Therapeutics (up 491.1%)
Getting approval for a new therapy from the U.S. Food and Drug Administration is a labyrinthine process for biotechs, so anything that can make the path straighter and smoother is welcome. When Cara Therapeutics earned breakthrough-therapy status for its new treatment in chronic kidney disease patients undergoing dialysis, IV CR845, for moderate-to-severe uremic pruritus -- an itching sensation for which there is a surprisingly large patient population -- it sent the biotech's stock soaring.
All year long shares of Cara have been rising because of the positive results it's seen in early and mid-stage studies, but the new designation turned on the afterburners, and as a result the stock is running 50% higher in the past week alone. While that doesn't guarantee approval at the end of the regulatory maze, it does give Cara access to a whole host of resources that wouldn't normally be readily available.
Cara Therapeutics then followed up with an announcement about an independent review of IV CR845's treatment of postoperative pain, and the positive signs for expanded use of the therapy. Because the opioid treats pain differently than similar classes of drugs, it has a lower risk of addiction, a huge problem with most opioids. This is a big opportunity for Cara.
The stock has risen nearly fivefold over the last year, turning $8,000 into $47,288. While it's no sure thing that Cara Therapeutics will win approval, all signs are looking bright right now.
Clovis Oncology (up 677.5%)
Clovis Oncology is another biotech that's running hot after positive developments. Its stock is also up about 50% over the past week or two, after it announced positive top-line results from a pivotal late-stage study on its newly launched ovarian cancer drug Rubraca, which is a PARP inhibitor.
A PARP is a protein that tries to repair damaged cells. In cancer treatments such as chemotherapy, you don't want a damaged cancer cell repaired, you want it to die -- so Rubraca blocks the repair mechanism.
Right now Rubraca is approved for third-line treatment for ovarian cancer, but the recent test results were so good that Clovis intends to accelerate its application for a second-line treatment designation, and then for maintenance therapy, which is the ultimate goal. Earlier this year Tesaro obtained such a designation for its Zejula therapy; if Clovis can do likewise, it's a lucrative market to attack.
Like Cara, Clovis Oncology had also been moving higher before the latest developments, but really surged afterwards. It may be a bit speculative at this point, even with the positive trial results, but if Rubraca is successful Clovis could have a big winner on its hands.