Adobe, Stamps.com and National Beverage
It is trite that the market, in general, has recorded an outstanding 66% over the last five years. Even at that, some individual stocks have outperformed other stocks and have gone ahead to record huge successes. There are three stocks whose value have quintupled since mid-2013 and these are: Adobe (NASDAQ: ADBE), Stamps.com (NASDAQ: STMP), and National Beverage (NASDAQ: FIZZ). These stocks have increased with at least 400% within that time frame.
Adobe (NASDAQ:ADBE)
Over the last five years, the market for virtual content imaging has snowballed. Adobe has brilliantly extended its leads in this booming market by using its already established brand as well as its notable development resources.
Reports indicate that sales over the five-year period have gone up to over $7 billion from the former $4 billion recorded in 2013. In addition, the profits recorded by the company have grown even more rapidly owing to the transitioning of its business model to a cloud-based platform which wholly supports recurring revenue. Accordingly, the subscription services it offers accounted for about 84% of its business in 2017, which was a visible increase from the recorded 67% in 2015. The impact of this success was felt on earnings which went from $0.58 in 2013 to $3.43 for each share in 2017.
The growth experienced by the company also demanded that they put resources into specific areas, and thus money expended by the company on research and development went up to $1.22 billion in 2017 from the recorded $862 million in 2015. The management, however, stated that there is a direct link between the investments made and the increasing rate of cloud subscriptions. As such, they assured investors that they could expect Adobe to go on with putting in cash into its product development assets.
Stamps.com (NASDAQ:STMP)
This platform assists its customers to ship products by using postal service. The service offered by Stamps.com is regarded by investors as good business considering the current surge in digital sales. Official statistics record that e-commerce accounts for 9.5% of the general retailing industry in the present time, and that’s up from the recorded 5.5% in 2013.
This has contributed to the increase in the returns accruing to shareholders of Stamps.com. As at 2017, its revenue was $470 million, and that’s a glaring increase from the recorded $128 million in 2013. During that same period, profits also increased by more than $160 million from the $34 million recorded in 2013.
The gains clearly show the dominance which the platform wields in the industry and not just that the business model is considered lucrative by most investors. Its business model utilizes a subscription-based approach, and this gives room for easy prediction of income while also allowing for higher rate charging as shipping volume increases.
These have been pinpointed as the primary reasons why its median yearly revenue for each user increased by 15% in 2017 to over $600. The continuous growth in the median monthly fees, as well as its number of subscribers, has contributed to the increase of its stock price gains even in 2018.
National Beverage (NASDAQ: FIZZ)
National Beverage just like Stamps.com has been at the positive end of the favorable trends in industry as well as robust business execution. It has a portfolio with a primary focus on sparkling waters and is entrenched in the LaCroix franchise.
Through this, it has been able to record booming sales and profit growth that appeal to investors. Its yearly revenue has gone up by 51% in the past three years, and its earnings per share have also doubled during that period. The increase has been attributed to the mix of strong sales growth and the increasing drink prices. On the other hand, its regular cola peers have been recording flat volume and just modest profit increases.
National Beverage is currently encountering major challenges as it plans to expand its retailing network where there are already more established competitors. However, it has been suggested that if National Beverage is able to go on with its customer satisfaction, the company has a good shot at maintaining its top position in the rapidly growing industry.
In general, these three stocks each have structural advantages which are being capitalized on by the management’s smart moves, as well as strong improvements in the products offered by the companies. This combination is inarguably a perfect formula for strong sales and profit gains which are attractive to investors as it has a huge tendency of increasing their share prices.
