The legendary 10-bagger -- a stock that delivers 10 times the return on its purchase price -- remains a fairly rare event in modern markets. And the pandemic drove instability across many different industries, with deep plunges in some sectors and others seeing new interest and investment due to their offerings.
These three companies experienced new highs since the beginning of the global pandemic, making an investment in the last decade truly pay off -- at least, to a certain point. $10,000 invested in Apple (AAPL -0.95%) in early 2013 delivered 10-bagger results at recent highs. Likewise, a $10,000 investment in Netflix (NFLX -2.54%) shares in mid-2014 at less than $70 soared to over $700 by late 2021. Roku (ROKU 0.91%) also saw new highs with its shares hitting $400 versus the $40 they sold for at the end of 2018.
However, what goes up also sometimes goes down -- as it did for two of these stocks. Let's take a closer look at all three -- and see what could be in store for their shares from here.
Apple dominates with innovation, iPhones, and India
The king of the smartphone market continues innovating with each iteration of its popular iPhone line. Accessories and services drive the company's App Store and offerings further into the lifestyles and pockets of consumers. The pandemic may have boosted sales, but Apple continues to perform well even as the global economy has reopened.
At a recent share price of $170, the stock isn't far off its 52-week high of $183. Over the past six months, the smartphone maker has moved roughly in tandem with the S&P 500, outperforming it by 4 percentage points over that period.
Apple may have a catalyst overseas, however. The huge economy of India seems ready to consume Apple products as its smartphone adoption levels take off. The company grew its smartphone shipments to India by 108% year-over-year in 2021, making it one of the fastest growing brands in the region, and Counterpoint Research expects continued growth throughout 2022.
Stay-at-home orders drove Netflix to new heights
Streaming powerhouse Netflix brought entertainment to millions of viewers stuck at home during the depths of the pandemic. It delivered 10-bagger results for many long-term shareholders who got in during the past decade, but Netflix failed to hold onto much of those gains as cities and markets reopened.
The streaming company's stock currently trails the S&P 500 by more than 35 percentage points over the past six months, making it one of the worst performers in the index so far this year.
Some investors may see this dip as a buying opportunity, but the company has yet to assure the broader market of its recovery. Long-term, Netflix has shown great resilience, but a potential recession may limit its growth in the near future.
Roku's pandemic power now wanes
Roku hasn't fared much better than Netflix when it comes to proving itself after recent all-time highs. While there are more Roku devices in homes worldwide than ever, and the company posted total net revenue growth of 18% year over year in its second-quarter 2022 earnings report, the stock continues to lag the S&P 500 by 45 percentage points.
The horizon doesn't seem so bleak for this previous 10-bagger, though. Recent partnerships with Walmart and Paramount could deliver the catalysts that, when coupled with strong earnings growth and guidance, may bring Roku share prices back in line with its previous successes. The company may even reach previous highs if share prices rise to reflect continued success through its partnerships.
The future of home and mobile entertainment
Smart investors know that profits can be made in bear markets, and bear-market investments can generate wealth when the bulls take control. Apple remains in a strong position and could be a dividend leader, while both Netflix and Roku could well stay near lows before seeing a return to previous levels.
Current market conditions provide a great opportunity to get in on these stocks at a much lower price point than during the onset of the pandemic, with its stay-at-home orders and boost to home entertainment. Never try to time the bottom of the market -- instead, focus on quality and long-term potential, especially when a recession could be looming. Consider the overall strength and position of these companies before making a leap during uncertain times.