Please ensure Javascript is enabled for purposes of website accessibility

3 Stocks That Turned $1,000 into $5,000

By Demitri Kalogeropoulos – Updated Apr 17, 2018 at 6:58AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Amazon leads this list of market-thumping stock returns since 2012.

The stock market has made respectable gains of nearly 70% over the past five years. Yet investors could have done much better than that if they were lucky enough to buy (and hold) individual stocks with unusually strong growth profiles.

You wouldn't have had to pick especially risky investments like small-capitalization companies or biotech start-ups to beat the S&P 500, either. Instead, many well-known stocks generated fantastic returns for patient investors.

Below we'll look at three companies -- (AMZN -1.57%), Logitech (LOGI -0.56%), and Skechers USA (SKX -6.98%) -- that grew by at least 400% over that period.

AMZN Chart

AMZN data by YCharts.

Leading the industry shift

Five years ago, e-commerce sales accounted for less than 6% of the broader retailing world, according to government statistics. Today, that figure stands above 9%, and that seemingly small spike translated into a rough doubling of the digital sales pie.

Chart showing e-commerce sales as a percentage of overall retailing.

E-commerce has shot up to over 9% of retailing from less than 1% in 2000. Data source: Federal Reserve Economic Data.

Market leader Amazon has been by far the biggest beneficiary of this tectonic shift in retail. Its product sales passed $118 billion in 2017, up from $52 billion in 2012. 

Yet investors have been even more pleased with Amazon's improving profit position. Its surging sales base, in addition to profits from its cloud services division, helped it generate $3 billion of net income over the past 12 months and $2.3 billion in the prior year. In contrast, it posted a modest net loss in 2012.

With enviable market positions in two major growth industries, it's understandable why investors are so optimistic about this founder-led company that's managed to hold on to a start-up mentality even as it passes $700 billion in market capitalization.

It's not over until it's over

Computer peripherals specialist Logitech faced major challenges to its business back in 2012 and 2013. Consumer demand for PCs was plunging, and that shift threatened core product lines like keyboards, pointing devices, and speakers. In fact, revenue dropped in 2012 and fell again the following year as profits slumped.

A girl listens to music using headphones.

Image source: Getty Images.

The company's subsequent recovery has been a case study in the power of operating and design flexibility, at least when those actions come from a business with a strong brand and a long track record for innovative product design.

Thanks to new releases in high-growth areas like home speakers and video gaming, Logitech recently notched a 22% sales spike over the holiday quarter. That marked the company's best growth pace in seven years. And, with help from cost cuts spurred by its sales slump in 2013, cash flow set a quarterly record as well.

A marathon, not a sprint

The rally in Skechers' stock can be pinned on the footwear specialist's success at standing out in a crowded global marketplace. The company owns the top walking, work, and casual dress footwear brands in the U.S. Yet some of its best gains lately have come from its international segment, whose growth powered a 27% sales spike in the most recent quarter. Skechers' $4 billion of revenue in 2017 was nearly three times the $1.5 billion it generated five years ago. Profit growth hasn't been quite as impressive, but the company still managed $383 million of operating income last year, compared to just $22 million in 2012. 

Executives said in early February that this growth was "a testament to the worldwide strength and relevance of our product, marketing, and brand." Investors are hoping those assets will deliver additional market-thumping gains when Skechers kicks off its new fiscal year by reporting earnings results on April 19.

No one knows which stocks will trounce the market over the next five years, but I'd pick Amazon to outperform among this group. Its success is less dependent on innovation, after all, and it's tied to an e-commerce niche that still has a bright outlook for growth as it approaches 10% of the broader retailing industry.

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Demitrios Kalogeropoulos has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Amazon and Skechers. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned, Inc. Stock Quote, Inc.
$113.00 (-1.57%) $-1.80
Skechers U.S.A., Inc. Stock Quote
Skechers U.S.A., Inc.
$31.72 (-6.98%) $-2.38
Logitech International SA Stock Quote
Logitech International SA
$46.00 (-0.56%) $0.26

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 10/03/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.