10x Return Stocks (Part 1)

When people think about 10 bagger stocks, they often think about all the wonderful growth stocks that gradually return 10x over time. Over the weekend, we ran some filters to seek out the current stocks that returned 10x between their lows and their highs during the past decade, to see how these stocks behaved. Therefore, some of these stocks may be now at a price significantly lower than their previous peak, but they did at one point in the past decade returned 10x for the investors who bought at their lows. This also excludes the stocks which got acquired and are no longer trading. In addition, we filtered out all the stocks with current market capitalization less than $300 million, thus filtering out all the penny stocks and a few others. With these criteria, we found around 500 of these stocks. Since the dot com bubble bursted in 2000, these stocks did not take into account one of the craziest bubbles of investment history. However, there were plenty that caught the housing bubble and commodities craze before the financial tsunami washed them out. From this universe of 10x return stocks, they can be basically classified into 3 types:

While it's great to be able to invest in the true growth stocks, there are actually a lot more crashed-and-recovered and super-spike stocks which returned 10x for those investors who bought at the lows. In this article, we will highlight and discuss some of these stocks.

Many of these stocks are dot com stocks which saw their immature business models crashed, but survived the dot com bubble burst, modified their business and found new source of revenue, or executed much better afterward with the wind of internet/broadband revolution behind them. For example, all three of the major

, Sina.com

, Sohu.com

, and Netease

, crashed after the dot com bubble, all traded below $1/share or close to it at one point, but found new life in SMS (Short Message Service, or texting in the US) services to generate the necessary revenue to fight another day to prosper later. They are all trading between $40/share - $60/share these days, so they in fact returned 40x-60x to investors who bought at the lows, much better than household names like Google

(which did not even make the 10x return list except for the investors who got the stocks before the company went public). Not all crashed-and-recovered stocks are tech stocks. For example, Airgas, Inc.

, which is currently in an

fight from Air Products and Chemicals, Inc.

, is a company which distributes industrial, medical, and speciality gases such as nitrogen, oxygen, helium, etc. While ARG did not exactly crashed, its stock declined from $25/share to $5/share from 1996 to 2000. The

is currently at $65.5/share. Some of the other crashed-and-recovered 10x return stocks include tech stocks such as Akamia

, Citrix Systems

, Ebix

, and those from other industries such as Gymberee

, NutriSystems

, and EZCorp

. In part 2 of this article, we will discuss the super-spike and true-growth 10x return stocks.