In the spirit of today's All-Star Game, our own all-star analysts offer a glimpse at their best-performing stocks over the past few years.
Best turnaround
Last June, when I singled out Nokia (NYSE:NOK) for our inaugural blue-chip stock report, I reasoned that the shares were unfairly discounted because of slumping North American market share. I also believed that the Finnish phone maker wasn't getting nearly enough credit for its global dominance of the smartphone segment.
A year later, with the stock now up more than 18% with dividends reinvested, I still believe in that thesis for Nokia. Top management has continued to buy back shares, its 2% dividend is still a market-beater, and it remains the overwhelming top dog in emerging markets, including its 60% share of the Indian market. I believe I'll be able to sell my shares for at least $24 per stub, and perhaps much more.
Best growth stock
I first bought Akamai (NASDAQ:AKAM) for roughly $5 a share in 2002, but quickly sold when the bear clawed at my position. At the time, I figured it was better to protect losses. How I now wish I had held; I'd be sitting on more than a six-bagger today.
At least I was smart enough to get back in shortly after the company began producing positive cash flow in early 2004. Months later, I recommended it to Motley Fool Rule Breakers subscribers. Those who purchased at roughly the same time as I did are up more than 160% today.
And I still like the investing thesis. Akamai is far and away the leader in delivering content over the Web, including sites such as this one. It also serves the vast majority of music downloads through storefronts such as iTunes, and it's gaining traction in bringing traditional business functions to the Web. Those powerful advantages should lead to more big gains in sales and earnings. I'm hoping to hold my shares for at least the next decade.
Best blue chip: Of all the stocks in my portfolio, one accounts for 9% of my investing net worth. That's Oracle (NASDAQ:ORCL). I originally bought the shares in early 2004, when fears over the database king's struggles to buy PeopleSoft had investors running for the exits. My original purchase is up nearly 49%.
I've since added heavily to my position, on the theory that Oracle's cash flow would easily fund its acquisitions. And it has; nearly all debt it has assumed has been short-term. Moreover, the company's diversified revenue base has led to double-digit earnings gains, including a 13% increase in non-GAAP net income in Q4.
Finally, Oracle trades for just 13.5 times forward earnings -- easily one of its cheapest multiples ever -- and insiders, including combative CEO Larry Ellison, hold more than 20% of the outstanding shares. It's only for the sake of diversification that I don't buy more.
Best mutual fund
Being a stock jock, I haven't been much for mutual funds. Till lately, that is. Blame Julius Baer International Equity (FUND:BJBIX) for my change of heart. I originally purchased shares for my regular IRA in 2003, and my original investment is up more than 60% since.
I'll admit that I bought the fund on someone else's advice, but now I see why it came so highly recommended. First, its total expense ratio is 1.31%, well under the category average of 1.57%. Second, its manager, Richard Pell, has been on the job since 1995 and is Julius Baer's chief investment officer. Third and finally, the fund is closed to new money, which means that management can focus solely on generating returns for existing investors like me. I like those odds.
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Fool contributor Tim Beyers owns shares of Nokia, Akamai, Oracle, and Julius Baer International Equity. Akamai is a Motley Fool Rule Breakers pick. Find out all of Tim's stock holdings by checking his Fool profile. The Motley Fool has an ironclad disclosure policy.
