1 Extraordinary Investor, Plus a 5-Stock Sampler Annual Check-In

Here at The Motley Fool, one of our key goals is to guide people to become great investors. It's so central to our mission that, until very recently, our motto read simply, "Helping the world invest -- better."

In this Rule Breaker Investing podcast, Motley Fool co-founder David Gardner leads off by interviewing a special guest who may be evidence that we're making progress. You see, in 2017, we began a one-year contest among a select core of our most-engaged members. We called it The League of Extraordinary Investors. The rules were fairly simple. Each month, these 163 players had to pick five stocks from among the 100-plus actively recommended companies in the Rule Breakers universe, and allocate 10 "chips" among them. (It's actually quite similar to what the Rule Breakers team does themselves each month, when they select our monthly Best Buys.)

These investments would be tracked over the course of a year, and at the end, we'd have a winner whose portfolio had outperformed those of their Foolish rivals. That winner was Jean Marc Ayas, and he talks with Gardner about a number of things, including stock picking, strategy, allocation, and one of the most important things the Fool has taught him about investing. Then, it's time for the one-year review of David's "Five Great Stocks You've Never Heard Of" sampler, for which he was picking from among the more obscure names in the Supernova universe. Did Ultimate Software (ULTI), Orbital ATK, NuVasive (NUVA), Littelfuse (LFUS 0.28%), and Blackbaud (BLKB -0.30%) together outperform the S&P 500 benchmark?

A full transcript follows the video.

This video was recorded on Oct. 4, 2018. 

David Gardner: The League of Extraordinary Stock Pickers. The League of Extraordinary Stock Pickers. Yup, something that had never existed before and may never exist again. It was a one-year test. I think it was a successful test, so we may well do this again. We have no immediate plans right now.

But what am I talking about? Well, what I'm talking about is the subject of the first half of this week's podcast; specifically, one year ago, on our Motley Fool Rule Breakers service, we invited some of our most engaged members [these are just paying customers] to pick stocks along with us, five a month each of the last 12 months.

Picked from existing Rule Breakers picks in the same way that we do for our Best Buys Now feature. Many of you who are Stock Advisor members or Rule Breakers members; you'll know that once a month we come out with lists of our Best Buys Now. Those are looking at existing companies that we've already recommended and saying, "We like these companies this month. These five for the next three-plus years."

We do come out with new picks every month in these services, but the purpose of Best Buys Now is to look at the ones we already have and say which ones do we like right now for new money. And it's become a very popular feature for both Motley Fool Stock Advisor and Motley Fool Rule Breakers, and I've been behind building those systems and having teams in place to pick those Best Buys Now every month for lo these many years for both of those services.

But we thought, "Why not invite some of our members to play along with us and let's call them a league, and let's look for extraordinary stock pickers." And I'm really pleased to share with you a guest -- a new friend that I'm making today and I know you'll enjoy him, too -- because the top performer out of the 163 players in our league was Jean Marc Ayas, and Jean Marc is my interview this week.

You're going to get to hear from a fellow member of Motley Fool Rule Breakers, but somebody who has distinguished himself as the No. 1 performer in the league. Briefly, here's how the game works. I'm sure I'll mention this a little bit more in my interview with him, but out of all those hundred-plus Rule Breakers stock picks [active recommendations in the service], we invited Jean Marc and others to pick the five that they like most that particular month, and we give them 10 chips to allocate across those five stocks.

For example, they could just put two on each, or they could load up six on one and put four ones; one down on the four others. So it's however you want to play 10 chips on those five stocks. And admittedly this was a somewhat short-term game, because we were just running it as a one-year contest, but the scores that each player racked up were based on multiplying their chips times their performance of each of the picks times, specifically, the outperformance of each of those picks. And so Jean Marc racked up over 5,000 points over the last 12 months playing our game with us and, yes, he is an extraordinary stock picker.

So I'm going to introduce him in just a little bit, but I want to mention the second half of this week's podcast is a review of one of our five-stock samplers. Yup, it was a year ago this month [well, actually a year ago two weeks ago, so it's been about 54 weeks later], but 54 weeks ago, I picked Five Great Stocks You've Never Heard Of. And what we'll discover, together, is how these stocks have done over the last year and whether, in fact, they have been great or whether their picker; i.e. me, was maybe not so great. We'll get to see how we're doing with those five stocks on the latter half of this week's podcast.

Now I should mention we are taping ahead of the actual air date of this podcast. Normally we tape on Tuesdays and we release to you Wednesday afternoons; but this time I'm at the Conscious Capitalism Summit, the CEO summit, in Austin, Texas which I go to once a year, this second week of October. It's always a delightful group of people and very inspirational. I hear about many different businesses and not-for-profits, too; all of whom are united by this concept of consciousness and capitalism well done. So that's where I am; therefore, this is being taped last Thursday. I hope the world won't have changed too much for the five stocks I'll be reviewing or what I talk about with Jean Marc, but you should know that we pre-taped this one especially early this particular week.

And, since I'm doing this intro after having already talked to Jean Marc Ayas, I just wanted to note one thing that I cover with him. Last week I hope many of you will remember we dedicated this podcast to getting started investing, and if you're not already an investor, I hope in the last seven days you've become one inspired by our conversation last week.

But one of the interesting themes that ran through the four of us who participated in last week's podcast was I think all four of us had been started by our parents; often a parent sitting us down and talking about the stock market on our drives to school. Making it a regular conversation around the supper table. And, in fact, you'll hear that Jean Marc, even though he's from a very different place [and, in fact, another country] had the exact same experience himself.

So I can't help but point out that that's a key thread that runs not just through last week but through this week; but, of course I hope that thread continues to spread itself out through our kids, and our kids' kids, and making sure that whether you have kids or not, or whether you're a great uncle or aunt or grandparent that you have that opportunity to get a younger person started investing. Look at the flowers that bloom from that, and we're hearing that almost every week it seems, these days, on this podcast. So great to hear Jean Marc and how he got started.

Without further ado, let's start my conversation with Jean Marc Ayas.

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Gardner: And now I want to welcome him. Jean Marc Ayas, it's great to have you at Rule Breaker Investing!

Jean Marc Ayas: Thanks for having me, David!

Gardner: I wanted to start with the question that I very frequently ask new employees who come to The Fool, or friends of mine who say they invest. It's the obvious one, Jean Marc. How did you begin investing? At what age? What was the circumstance?

Ayas: I believe I must have been 12 or 13 at the time and it was my dad who introduced me to the stock market. He showed me his investments. His personal portfolio. And at the time we could only get quotes in the newspaper the next morning, or follow the ticker on the television, which was alphabetical, so you had to basically wait until the stock you were looking for would end up coming on the ticker.

That said is basically how I got introduced to it, and I was able to follow his investments. I was able to follow the news flow on the companies that he was looking at and get a better understanding of the dynamic and what makes the markets go up and down. It was interesting. It was not until much later that I made my first personal investment, but it was a great way to get introduced.

Gardner: And was your father a professional? Was this his calling? Was he an investor? Can you tell me a little bit about your family background?

Ayas: My father is a professional, yes, but not in finance. My father is an architect. My parents were immigrants to Quebec from Egypt. They came in the late 1960s. They settled here and studied here, and eventually built their family here. And I've lived in Montreal ever since then.

Gardner: So discerning listeners will pick up just a slight French accent. A lovely French accent behind the excellent English that you speak. Jean Marc, on a professional daily basis, how do you spend your time these days?

Ayas: Currently I work for one of Canada's Big Five banks. I work in the equity research team covering Canadian retail stocks. Because it's a thin market, we cover both staples and discretionary stocks. In the past I had some years in investment banking, also, at a boutique firm here in Montreal that was eventually sold.

And currently these are actually my last two weeks in my current role because I will be transitioning to a new career path and working for a company that I actually used to cover in the role in which I'm currently implicated. This company is called Alimentation Couche-Tard. It's one of the world's largest c-store operators and acquirers. In the U.S. you would probably be more familiar with it through the Circle K brand.

They're looking to build an investor relations department. Potentially also bring in some strategic responsibilities. I'm going to be the first person hired to help build that team.

Gardner: That's very interesting. It occasions two different kinds of questions. The first is just going to be about Alimentation Couche-Tard, as you mentioned. I'm just interested that they don't already have an investor relations department. It's a big company.

Ayas: Yes, it's pretty impressive, actually, that they've grown to the size where they are, currently, and never did it with an investor relations department helping to guide the investors on the street. They've had in the past a way of functioning that was more ad hoc with investors. I think they're looking to organize it more right now.

It makes complete sense. This is a company that is very acquisitive. They're becoming bigger and bigger on a global scale and expanding their investor base, and I think this can only be good for the messaging and letting investors and analysts, as well, understand what the key points are of Couche-Tard's story and what they're able to accomplish.

Gardner: Well, I know a lot of Americans would recognize Circle K, a longtime brand; a convenience store brand here in the U.S. I'm curious, then. The second dynamic that I wanted to ask you a question along from that interesting bit of information from you, Jean Marc, is just your own choice; your decision to shift your career from equity research to investor relations. I'm wondering on the one hand. Is equity research not paying that much anymore or was this just an exciting opportunity? What was the choice that you're making to change the path of your career?

Ayas: No, it's definitely the opportunity that Alimentation Couche-Tard offers. Like I said, it's a global company. It's a company that's known for offering opportunities to their employees to learn all the different sectors of the company, so there's always going to be opportunities to move, whether I end up staying ultimately in investor relations or move to other areas, potentially even in operations. Maybe even in the U.S. So there's a lot more runway, I think, compared to the bank.

And also, to be fair, I work in Montreal and the finance industry in Montreal is not the same as it is in Toronto and New York in terms of vertical movement within corporations. So it's a decision that I knew would eventually come. I was waiting for the right opportunity and in two weeks I'll be there.

Gardner: Well, they found a very good man for the job! In fact, they found an extraordinary stock picker!

Ayas: Thank you!

Gardner: In the introduction earlier I mentioned a little bit the experiment that we went on together with you and 162 others on our Motley Fool Rule Breakers service, inviting some of our most-engaged members to come in, on a monthly basis, and play the same game that we play internally as we select our Best Buys Now for the service.

So just to rehash a little bit, we asked Jean Marc and 162 others to submit five companies, each month, over the last 12 months; five companies that they favored to beat the market. And we asked you, specifically, if we gave you 10 chips and you had to put them on those five companies, which one would you put two on or which one might you put four on or one on.

So you allocated 10 chips across those five companies and I'm really excited to be talking to the No. 1 performer, Jean Marc Ayas, who outperformed everybody else. Racked up over 5,000 points. That's just basically multiplying the chips and the outperformance that he achieved and so, of course, the rest of this interview, Jean Marc, is us finding out how you got so good at this and what you've been doing.

Let me first start by asking when you were picking stocks from the Rule Breakers service, did you find yourself picking from the industry that you professionally follow, or did you find yourself spreading it out?

Ayas: No, most of the picks were spread out. In terms of the industry that I follow, I think maybe there was one name that I recall Five Below, which is a discretionary retailer that sells items at five dollars and below and has a lot of growth in the U.S., and that right now is seeing a tremendous performance; but besides that one, most of the picks that I made were in industries that I'm not as familiar with, but that I have been learning as I've been reading The Fool and covering these companies.

Gardner: Wonderful! Let's put a few more company names into play; companies that helped you toward outstanding performance over the last year. What are some of your favorite Rule Breakers? Are they ones you picked a year ago that helped you to this outperformance, or ones that you would just favor right now going forward?

Ayas: My favorite one, by far, was The Trade Desk (TTD -4.34%). It's funny because in the early stages of the game, I must have been in the bottom 10% of the performers for the first six months of this stock-picking contest because The Trade Desk's performance had been awful, and month after month I kept adding it to my picks and weighing it pretty heavily.

But it's a company that I believed in. It's a company that for whatever reason wasn't performing well as a stock but continued to see very strong market potential. Then they reported a quarter and the stock got rewarded because the results were extremely strong, and then there was a second quarterly report that did just the same. I think in each case the stock went up on the next day more than 30% or so. That not only allowed me to save face, but it propelled my score fairly high.

Gardner: That's a company that came to Rule Breakers in February of 2017 and so here we are a year and a half later and from that initial buy at $34.30 to see it at about $136.00 today means that it's gone up 4x in value over that year and half. But isn't it interesting to think that for the first several months, as you were playing along, Jean Marc, that it was such an underperformer and so disappointing, even within that incredible run over the last year and a half of it going up 4x in value?

Ayas: Absolutely, you're right. It's very interesting. And even though the market reaction had not been great after some of the earnings releases, their earnings were great. The revenues were growing quickly and just listening to their conference calls and to CEO Jeff Green and his team talk about their opportunities and the performance, it was hard to understand why the market wasn't rewarding the company, and it was hard to understand how things could go wrong.

And not just in the conference calls, but I've had the chance to listen to a bunch of presentations that Jeff Green has made that are posted online. He's a very insightful leader. He's really on top of his business, on top of his industry, and he's got tremendous vision. So all of these things made me appreciate where the company was headed.

And not to mention that when you look at the metrics, this is a company that had fast growth. That had expanding margins. It was profitable compared to many of its peers that weren't, and it was a major disruptor of the current industry.

Gardner: That's right. And for those who have not yet found The Trade Desk, I should just mention that they basically are behind programmatic ad buying. Their goal is to put the right ad in front of the right shopper at the right time using the internet as kind of a cloud-based optimization platform for ad buyers. So if they're doing their job well, Jean Marc, you as an advertiser are really pleased to work with them because you're working with a visionary team that knows how to use all of the different ways we can reach people to reach the right people.

Ayas: That's correct. And I would add to that that the demand platform that they've built is the largest independent one, and I think in the long term this is going to be very important for media buyers who are going to be choosing, basically, between the closed systems that are offered by Google or Facebook. So not to get too technical, but I think it's a big advantage that the company has and that the market potentially overlooked for a good chunk of time.

Gardner: I don't want to dwell too long on The Trade Desk because there are so many other companies that I'd love to talk about with you, and I know we're going to run out of time. I'm not even going to get to talk about everything I'd like to talk about anyway, but let's put a couple of more company names into play. What are a couple of more companies that you particularly have favored or did well with over the last 12 months?

Ayas: Some of the companies that I weighed more heavily I'm not sure did as well in the grand scheme of things, but it's a company that I did weigh heavily and that I believe in very much is Take-Two Interactive. It's a company that's benefiting a lot from strong trends in the gaming industry with mobile and e-sports doing extremely well and growing fast. They have some strong game franchises. I know you're a gaming fan, so...

Gardner: I can't wait for Red Dead Redemption. Yup, Red Dead Redemption 2 is coming out in just a few weeks.

Ayas: Right. So their strong franchises are very good for the stickiness of the revenues and they keep putting the money back in to develop new games and new franchises that are going to eventually benefit in the future.

But I think most of all, for that one, what I appreciated was its size. It's maybe not always the best way to evaluate, but when you look at Activision Blizzard  and EA Sports and how big they are, it shows the potential that Take-Two has to get to these levels. I think that's what was interesting to me.

Gardner: That's right. Take-Two's market cap, these days, looks like it's clocking in around $15 billion, whereas Electronic Arts is more than twice that size as is Activision Blizzard. What a tremendous industry it's been. They're all winners and I think that it remains such an important industry going forward.

Ayas: Correct.

Gardner: How about another company?

Ayas: I also weighed heavily on iRobot. This one is a company that I've always liked. I find it very innovative. I don't personally own any of the products, but I know people who do. I've seen them operate. It's a fun company with fun products and a lot of new uses that could eventually come.

In this case I think it was more a question of the stock had been beaten down after some misses, but also because of some fears of competition coming from Chinese brands. But when you would listen to the CEO talking about his business, and he's always been pretty frank about it, the discussion has always been the same, which is the market opportunity is very large. There could be other players that come in and it's not necessarily going to stop us from getting the growth that we need. And we have the opportunity to get into new product areas.

This was a company that I opportunistically, I guess, added to my stock picks based on the weakness, and it eventually rebounded and that helped my performance.

Gardner: And one more curiosity question. This is more about your strategy playing the game that we gave you to play. When you were given 10 chips, were you typically going two, two, two, two, two across five companies or did you go with some six, one, one, one ones? How did you play the game?

Ayas: I don't think I ever did a six, one, one, one, one; but I definitely put some different weights on most months. There were months where I didn't have any particular inclination and so I kept it at twos evenly across the board, but I believe I've put some four weights a few times on some of the companies depending on where the current stock price was when I had to make the pick and depending on the potential that I could see in the next few months.

It's particularly interesting in a game like this because obviously, when you're investing for the long term, the dynamic is going to be much different than when you're investing for one year, and so you have to respect the fact that there's going to be earnings releases. There's different things that you have to take into consideration in terms of timing, and there's also the fact that momentum played a part. I mean, it was obvious that there was a lot of momentum in Software as a Service stocks, and so I focused a lot of my chips on companies like those.

Gardner: This was a one-year experiment for us. It's the first time we tried the league and for now, we're just pausing it and just reflecting on the results. And Jean Marc, I know we're going to invite you to come into our Farm Team and our team on Motley Fool Rule Breakers and be part of our regular voting. You've certainly distinguished yourself and we would love to do that with you.

But I'm wondering. Any advice that you would have for investors, in general, based on your perspective? Obviously you're a professional at this. But as a very successful investor [yes, it was just a year, and you and I know that anything can happen in a year], but clearly your instincts backed up by your professional experience suggest that you're probably going to do well not just last year, but in the next five years, too. How do you suggest somebody approach these kinds of more volatile companies and these innovators?

Ayas: I have to say that my early years investing were horrible. I didn't do well because I was mostly buying stocks and not buying companies, which is something that The Fool has taught me to do better. Over the years I followed a lot of the advice that has been dispensed on your site and in your podcasts, and so I would say my biggest takeaway is to invest for the very long term and to hopefully not sell. Never sell. This is something that I learned and that has been good for my portfolio for a while now.

When I look back at some of the investments that I did have, it's interesting, because I used to own Amazon. In 1999 I purchased it and probably sold it shortly thereafter. And then I bought it again in 2002 and sold it shortly thereafter. And I thought I was smart with 30% returns. I think the key for me, now, has been to buy stocks and to hold onto them for a very long time, especially when it's companies that are rule breakers. That are disrupting markets. It takes time for these trends to play out and it's important to follow through with these companies for the long term to see how they end up.

Gardner: Spectacular. All right, well now as we come to a close, the two questions I often like to ask around Fool HQ to people I've just met for the first time; let's say a new employee. Here they come. The first one, Jean Marc, is what's your superhero power?

Ayas: I would say I'm resilient. It's hard to put me down. I'm the type of person that's not afraid to fail, and so I always look at these situations as learning opportunities for the future.

Gardner: That's wonderful, and sometimes there's overlap with that first answer with the second question that I'm going to ask. I know you've heard this podcast before, so you may have heard me ask this of my fellow employees. At The Motley Fool we have our core values and one of them is your motley. The idea is that we are blended together from hundreds of different people who come from different walks of life and they all come to work, here, at The Fool Headquarters; and each of them has a value that probably defines them that they stand for.

So the catchphrase we use around these halls is "what's your motley?" And so my question for you, Jean Marc, I ask, is "what's your motley?"

Ayas: Mine would be the word "kaizen" that comes to mind. That's Japanese for continuous improvement. It's an approach that I always take, which is to always get better at everything that I undertake and everything that I take interest in, in general.

Gardner: Was that Toyota's manufacturing process? Do you know the background of "kaizen?"

Ayas: For some reason I associate it with General Electric, but I'm not sure why that is. I think maybe because it was mentioned by Jack Welch several times in his books and in his management style. To be honest, I'm not sure.

Gardner: Aha! Well, actually, through our friend Wikipedia, which I'm looking at as we speak, I see that it's a little bit of both. So it was once called "the Toyota way," and it was first practiced in Japanese businesses after World War II, influenced by American business; but, indeed, General Electric and other big practitioners, and in some cases originators. So that's really an interesting blend and a great motley!

Well, Jean Marc, I also want to thank you so much for having graced us as the No. 1 performer in the League of Extraordinary Stock Pickers, graced us with your performance over the last year, and your presence in this week's podcast. I hope you have a wonderful transition into that next phase of life and I look forward to talking in the future!

Ayas: Thank you, David! It's been a great conversation and I'm glad I had the opportunity to speak with you!

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Gardner: Wow! I'd never actually talked to Jean Marc before, but how much fun was it to just pick up the phone and find out who this person is who won our stock contest? I had never talked to him before. That conversation I just shared with you was a lot of fun.

I do want to mention again getting starting investing. Since we're going to be, the first week of November, closing out that series with Part II a few weeks hence, I just want to remind you that you can email us at [email protected] if you have additional questions about getting started investing, or a great story of how you've just gotten started investing or something else as a result of last week's podcast. But again, the first week of November we're going to be dedicating to answering any questions that were aroused by last week's podcast or any additional stories or pointers that we can add when we close it out in the first week of November.

Well, it's time to review Five Great Stocks You've Never Heard Of.

[...]

Gardner: Well, the date was September 13th, 2017. The Rule Breaker Investing podcast that published that Wednesday, slightly more than a year ago, was entitled Five Great Stocks You've Never Heard Of, and here's how I came up with that list.

I remember remarking on that podcast that I had recently submitted 10 different possible stock recommendations to my friend Simon Erickson, who helps run Motley Fool Explorer. And Motley Fool Explorer some of you will know and be subscribers to, but if you're not a member, this is a service where monthly we come up with four stocks and kind of like March Madness, a Final Four Bracket that you'd be used to if you're a college basketball fan, we'd battle them against each other to see which is the one that will be the winner that month. And we'll pick a theme, like maybe we'll say AI, or marijuana stocks, or whatever it is that seems interesting at the time and we'll find four companies that are tied into that theme in some way and then our talented group of stock pickers [some more extraordinary stock pickers] at The Motley Fool end up winnowing those four down to the final one, and then we put real money into that one stock.

And so Simon Erickson, who oversees that service, came to me and said, "Hey David, let's do one with lesser-known companies," and he said, "could you submit me 10 ideas?" I gave him my 10 ideas and he used four of them. And history will show he took Insulet (PODD 0.92%), Masimo (MASI -0.85%), Pegasystems (PEGA -1.35%), and 2U (TWOU -8.15%). I don't have time to talk through those companies today. I hope some of you would recognize Insulet, Masimo, Pegasystems, or 2U; but those are the four that Simon took and I'll mention at the end how the one that won has done in the intervening year.

But the six that he did not pick from I felt like I had done the work, so why wouldn't I take "five great stocks you've never heard of" from those six and feature them as my stock sampler on this podcast, and that's exactly what I did.

Now there were five traits that needed to be true of these companies and they are, in fact, true of all of them.

Trait No. 1: They needed to never have been picked by any of our Supernova missions. So Supernova, another service I'm affiliated with at The Motley Fool, has real money portfolios. They're drawn from my picks in Stock Advisor and Rule Breakers; and yet of the 210 companies that were in the Supernova Universe a year ago, 130 of them had never been previously selected in any real money portfolio, so I figured that's Trait No. 1. I want to pick something that hasn't yet gotten additional love, here, at The Motley Fool.

Trait No. 2: It had to have a market cap of under $10 billion, because probably if it's a great stock you've never heard of, it's not going to have a market cap that's really big. And now that I can say "market cap" and know that all of my listeners know what that is every week without having to explain it, because we have a game show that we play on a quarterly basis, you understand that when we go for smaller companies with market caps below $10 billion, we're looking in more of the "hidden gems" of this kind of a universe.

Trait No. 3: The brand name must be one you and I wouldn't recognize. So earlier when I said that Simon took Insulet, Masimo, Pegasystems, and 2U, I'm thinking most of the people [well, maybe not listeners of this podcast], but anybody that you might talk to on the street probably haven't heard of Insulet or Pegasystems. Am I right? So that needed to be true of these five stocks I'm going to share with you as well.

Trait No. 4: They had to have already been long-term market beaters. That's right. Usually in my experience the winners keep on winning. One of my ultra-themes -- one of my uber themes of this podcast -- and so I wanted to find companies that had already done well, thinking they're going to continue to do well.

Trait No. 5: And then finally No. 5, the fifth trait is, I told Simon, "I'm going to select for you, in the list I give you, companies that I admire in some way, shape, or form. There's some special affinity I have with them. Usually it's just I like what they do in this world."

So those are the stocks. Simon took his four from the 10. He left me with six and I took five of those six and I made them Five Great Stocks You've Never Heard Of. And this is odd for me. I said, "Let's do them in reverse alphabetical order that particular podcast, so I'm going to now present the results in that same order, reverse alphabetical order.

Longtime listeners of this podcast know that we're always trying to beat the stock market averages with our five-stock samplers. And you'll also know, if you're a longtime listener, that we've had a great deal of success with these. Out of the roughly 15 of these we've done over three-plus years, we've barely ever lost with any of them; so always, when I bring back a review, the big question is can we keep the music going. Well, let's see.

Stock No. 1: Remember, reverse alphabetical order. The ticker symbol is ULTI. The company is Ultimate Software. This is a company that does talented human resource management using the cloud, cloud services through its UltiPro platform. This is a company with recurring revenue. One I like a lot. And I'm happy to say I like it even more because of its performance lo these last 12 months. So spoiler alert! This is the best performer in the group.

ULTI was at $187 at market close on September 13th a year ago, and today it's at $311. So quick math -- it's up 66%. Now, we're always comparing ourselves to the S&P 500 to the market's average. How has the market done over the last year? Well, the market is up 16% since that podcast on September 13th, so plus 66 for ULTI, for Ultimate Software, minus 16 from the market gives us a plus 50. We're beating the market by 50% to start off this five-stock sampler.

Stock No. 2: I'm happy to say it's going to help out, as well and this was probably, of the five companies, the most interesting one and the best story that I have for you, because five days after this podcast aired a year ago, this company got bought out. Shocker! Just five days after our podcast. I didn't even get a chance to do my next podcast before this company had already been bought out or, at least, announced as having been bought out. The ticker symbol is OA. The company was Orbital Atk. This is an aerospace and defense company. Orbital Atk operating not far from Fool Headquarters here in Northern Virginia. A long time Rule Breakers holding and a market beater for us.

At the time that I did the podcast, it closed that day at $108 and five days later Northrop Grumman said, "We're going to pay all cash $134.50 a share for that company." And so yup, Orbital ATK has been a winner for us.

Now, there is some question how to score this because right away the stock went up to about $130 or so, and probably in real life you might have considered closing it out at that point. But I'll just point out that it wasn't until June of this year that the final deal was consummated. Yes, it was at $134.50 from Northrop Grumman, but we'll go ahead and score it that way. So the stock went from $108 to $134.50 this past June. That's up 25%. And the market over that period of time [from last year's podcast to June, when this one disappeared] was up 11%. So we're going to give ourselves a plus 14 in the win column for Stock No. 2. 50 plus 14 is plus 64. We're off to a hellaciously good start with Five Great Stocks You've Never Heard Of.

Stock No. 3: Well, I'm happy to say this is a contributor to positive score, as well. Stock No. 3 is NuVasive. The ticker symbol is [NUVA]. NuVasive, the company behind spinal surgery. Minimally invasive solution of its own kind. Coming in through the side of your body if you're going to have spinal surgery. It's an innovative procedure. And I'm happy to say NuVasive has been a winner over the last year.

The stock, right after the podcast, was at $58.50 a share. Today it is at $69. We're talking about a stock that is up 18%. Again, the market up 16%. So just a minor outperformance, but outperformance nonetheless, so that's a plus 2. That puts us plus 66 in the win column after three of our five stocks.

Now, here's some bad news. The rest are losers, so the question is are we going to stay above water after I go through Stocks No. 4 and 5? And before I present Stocks No. 4 and 5, again in reverse alphabetical order, I should mention that typically when you pick five stocks, you're going to have probably a few losers. It's very rare that we're going to get five stocks out of five beating the market.

But I'm happy to say often it's one great stock, or one or two, that has consistently propelled us to outstanding performance, not just in these five-stock samplers, but it's often a smaller minority of stocks in Motley Fool Stock Advisor or Motley Fool Rule Breakers that provide tremendous amounts of outperformance. And, in fact, a single big winner, in my experience, wipes out all of your losers combined and then leaves some profit on top of that. A company like Netflix. Or a company like Intuitive Surgical in Stock Advisor and Rule Breakers respectively. These are tremendous long-term winners.

Of course, the only way you're ever going to get great performance is by holding over long periods of time. You heard Jean Marc Ayas, my new friend, double underline that earlier in my conversation with him. So I guess I'm not surprised that I have a couple of losers. I'm always disappointed, but let's see how much they lost.

Stock No. 4: And of these five companies, this is probably the least well-known of all. Littelfuse. Little not even spelled like small, but L-I-T-T-E-L. Maybe a German name. Littelfuse. Yup, it's kind of a fuse company. It makes circuit protection products. It's one of those companies that has just thousands of different products. Lots of little gizmos. Lots of little different fuses and ways to protect surges in your house if there's a lightning storm. This is certainly a company that does sell in some cases to consumers but a lot of them B2B industrial sales. Business to business. So that's Littelfuse.

I'm sorry to say Littelfuse has underperformed since I picked it a year ago on this podcast. It was at $185 a share then. Today it's at $193. So it's up 4%. It's not down. But with the market up 16%, that has been an underperformer, so we have to deduct 12 points from our plus 66 score. That gets us down to plus 54 as we hit our fifth and final stock, also an underperformer.

Stock No. 5: Which brings us to our fifth and final stock, as I already mentioned, also an underperformer. The real question is just how badly. Well, let's see. The ticker symbol of Stock No. 5 is BLKB. The company name is Blackbaud. And Blackbaud is a cloud-based platform and services company serving a lot of the not-for-profits that you know and love in this world.

That's right. If you have a friend who runs a not-for-profit, or works for one, or maybe that friend is you. Maybe you do it. You may well know Blackbaud as a company that for a few decades, now, has been enabling you to manage and oversee your business, the donations you're taking in, and to help manage a not-for-profit. And it is a leader within its industry.

Unfortunately, it wasn't a leader vs. the stock market. A year ago Blackbaud was at $84 a share when I picked it on this podcast. These days it's at $96. So I will say that it is up, and that does make me happy. It did underperform. It's up 14% -- the market up 16% -- so it's only a minus two that we take away from our 54% of outperformance for 52% overall, as we now wrap up the numbers for this five-stock sampler review.

That's right. These five stocks picked a year ago, the market was up 16%. On average, these companies are up 26%. And so that's not bad for a group of companies that you've never heard of and they were picked out of the scraps of unclaimed picks by my friend Simon Erickson as he continues to do the good work he does in Motley Fool Explorer.

Now, I did mention earlier that he took those other four and from those four, Masimo was the one that our team in Motley Fool Explorer selected and put real money in. So you might be wondering. My stocks, that I've just shared with you are up 26% on average. The market was up 16%. How did Masimo do in Motley Fool Explorer, picked at the same time?

Well, Masimo was at $84.35 when The Motley Fool put its own real money into it. The theme that month was called Hidden in Plain Sight, which is kind of the same idea of Great Stocks You've Never Heard of. And Masimo, today, has gone from $84 to $119. It's up 45%. So I want to congratulate Simon Erickson and The Motley Fool Explorer team for their outstanding outperformance which Motley Fool Explorer has generated months and months and years now; but it's fun to notice in closing that their stock actually outperformed my basket of five stocks, and yet I was still pretty happy with our basket of five stocks.

Well, enough. What a fun time it was getting to meet a new Fool. Jean Marc Ayas, thank you for joining me. And reviewing these five stocks picked a year ago on this podcast and see how they've done. Five Great Stocks You've Never Heard of.

Next week, I'm going to celebrate a special moment in Motley Fool Stock Advisor history. My brother Tom and I have picked one stock every month since March of 2002, and if you do the math with me [and darn it, why would you], you would know that this month's pick represents Pick No. 200. The 200th monthly pick that my brother Tom and I have made in support of Motley Fool Stock Advisor members going back to March of 2002. So next week's podcast is going to be called 200 Stock Advisor Picks Later.

In the meantime, Fool on!