Don't let anyone tell you that it's been a ho-hum year for investors. A lot of stocks have made some big moves higher this year, and that includes roughly 50 companies with market caps north of $1 billion that have more than doubled in 2018. What if things are just getting started?
I took a look at three stocks that can double again in 2019 a couple of weeks ago, but now I have some more names for your consideration. Square (SQ 0.48%), Glu Mobile (GLUU +0.00%), and Etsy (ETSY +3.21%) have rewarded investors handsomely in 2018. They could lead the way by repeating the feat in the year ahead.
Image source: Square.
Square: Up 101%
The high-tech merchant payment processing specialist has been on a tear over the past two years, and if it doubles again in 2019, it will be three years in a row that the stock tops a 100% return. It would be quite the three-peat.
It's easy to see why the market has become enamored with Square. It has posted accelerating revenue growth in each of the past seven quarters, a streak that started at a 21% year-over-year top-line increase in the first quarter of 2017, clawing its way up to 51% in its latest quarter. Adjusted revenue is growing even faster, up 68% in the third quarter.
Raising the bar with every passing quarter will get more challenging in 2019, largely because of the law of big numbers. However, with its Square platform continuing to woo merchants and its Cash App gaining traction with consumers, it's hard to bet against the market darling until it proves mortal.
Glu Mobile: Up 104%
A hot app can work wonders for a smallish mobile gaming publisher, and Glu Mobile has a knack for coming up with a hit just when a former trendy diversion starts to grow stale with smartphone jockeys. Glu Mobile's latest winner is Design Home, a game where players tap into their inner interior decorator. It's been Glu Mobile's top draw for more than a year, accounting for 41% of its gross bookings in its latest quarter. Covet Fashion and Kim Kardashian: Hollywood were earlier hits that eventually passed the baton to the next sticky app.
Glu Mobile's success over the past two years -- it nearly doubled in 2017 -- stems from the conservative guidance that it continues to push higher with every quarterly report. Growth may be slowing at Glu Mobile, but it still isn't at the point where it needs another fresh winner off the bench. Its four largest releases all experienced double-digit percentage bookings growth in its latest quarter. The well at Glu Mobile may eventually run dry, but now it's still gushing with its pulse squarely on what young app players are craving.
Etsy: Up 164%
The leading online marketplace for arts and crafts keeps gaining traction. Revenue surged 41% in its latest blowout quarter, and its adjusted profit more than doubled what Wall Street pros were expecting. Making analysts look like lightweights is just what Etsy has done over the past year when it comes to barreling through bottom-line targets.
| Quarter | EPS Estimate | EPS Actual | Surprise |
|---|---|---|---|
| Q4 2017 | $0.09 | $0.36 | 300% |
| Q1 2018 | $0.06 | $0.10 | 67% |
| Q2 2018 | $0.04 | $0.07 | 75% |
| Q3 2018 | $0.07 | $0.15 | 114% |
Data source: Yahoo! Finance.
The big catalyst for its recent surge was a decision to boost its selling fees in June, something that could've scared away sellers but, thankfully for investors, that wasn't the case. Etsy's seller base has risen by 8% over the past year with gross merchandise sales climbing 20% in that span of time. It's a win-win-win. Sellers are making more sales. Buyers are finding a broader selection of crafty merchant wares on the site. Investors are cashing in on the explosive margin expansion resulting from the higher fees.
