2020 wasn’t the easiest year to make money in the stock market, given the coronavirus pandemic, but if you were patient and smart, you could still have done well.
TheStreet writers and experts evaluated stock performance, quarterly results versus expectations and execution against strategy to come up with their top picks for the year. These picks, some of which were unveiled this week, will continue to be revealed this week and next, with our pick for Stock of the Year to be announced on Monday, Dec. 21. Please check TheStreet often between now and then.
2020 stock performance*: +33%
Only a shallow drawdown during the COVID-19 selloff. From February peak to trough, Costco (COST) – Get Report only dropped 16.6% as investors quickly recognized this essential retailer is where the consumer would flock to pantry load and “panic buy” on goods.
The company’s style of reporting monthly sales provided great transparency into how it was performing and the consumer trends it was seeing. Costco has been a clear winner from a consumer who wants quality products at low prices. The company has delivered double-digit percent total comps since June. Meanwhile, membership fee income has grown, and retention rates are strong.
With plenty of cash on hand, Costco rewarded its shareholders with a $10 per share special dividend in December.
2020 stock performance*: +27%
Investors are finally accepting the fact that Walmart (WMT) – Get Report, the world’s largest retailer, is in position to compete with Amazon (AMZN) – Get Report head-to-head. The key to Wal-Mart’s success in 2020, and going forward, is the company’s surge in online sales. U.S. e-commerce sales jumped 79% in Wal-Mart’s third quarter, and that was before the introduction of the company’s answer to Amazon Prime, called Wal-Mart +. Wal-Mart has taken its time with Wal-Mart +, focusing on the customer experience instead of the number of subscribers. This bodes well for the company’s future.
2020 stock performance*: +71%
Apple (AAPL) – Get Report is set for big things in the next two to three years with chips coming in-house on the new Macs, fuller integrations of apps and phone operating systems on all devices, Services continuing to build, the continuing awareness of and play to privacy concerns, a strong mix of lower price point phones with new 5G offerings and strong performance in recovering China.
2020 stock performance*: +1,058%
Nio (NIO) – Get Report is an Chinese electric vehicle (EV) company that’s benefiting from the continued shift to EVs, as well as subsidies supporting that shift in China. At one point, Nio was held by the Stocks Under $10 portfolio.
2020 stock performance*: +127%
It’s been an all-around great year for Nvidia (NVDA) – Get Report as earnings have benefited from exposure to secular growing trends in gaming and the Data Center, one major acquisition was completed and an even larger deal was announced, and there have been several key product launches and new partnerships announced to support growth in the years to come.
In April, the company received all necessary regulatory approvals and closed its $7 billion acquisition of Mellanox. With this immediately accretive deal, Nvidia’s fast-growing data center business became even bigger. In May, Nvidia unveiled its new Ampere Architecture and A100 GPU, which the company has said is “the greatest generational performance leap of NVIDIA’s eight generations of GPUs.”
In June, Nvidia and Mercedes Benz announced a transformative partnership in which the automaker plans to launch software-defined, intelligent vehicles using end-to-end Nvidia technology. And in September, Nvidia announced it has agreed to acquire ARM Limited from Softbank (SFTBY) . This move was well-received by the market and analysts despite the significant regulatory hurdles the deal faces.
* As of Dec. 8 close
Costco, Walmart, Amazon, Apple and Nvidia are holdings in Jim Cramer’s Action Alerts PLUS Charitable Trust Portfolio. Want to be alerted before Cramer buys or sells these stocks? Learn more now.
How TheStreet Chose the Best Stocks of the Year
TheStreet polled a group of 16 writers and editors at TheStreet, RealMoney, Action Alerts Plus, Stocks Under $10 and Trifecta Stocks and asked them to nominate candidates, and then narrowed that list down to the top 25 stocks. We then asked each of those writers and editors to rank the top 25 from top to bottom, assigning 25 points for a No. 1 ranking, 24 points for a No. 2 ranking, etc. We then totaled the points for each stock to arrive at our final rankings.
The result is a comprehensive list of the stocks that performed and executed the best in 2020, helping drive the S&P 500’s rebound from its pandemic-induced lows in March.