December has meant a bumpy ride on Wall Street, even for some of the best-performing stocks of 2021. However, despite the current jumpy market sentiment, so far in the year, broader indices have seen robust returns. The Dow Jones Industrial Average (DJIA), the S&P 500 and the Nasdaq-100 are up about 16.5%, 24.5%, and 20%.
In addition to the respectable double-digit returns in the bellwether indices, many individual shares have seen excellent returns, sometimes in triple digits. Therefore, today’s article will introduce 10 of the best-performing stocks of 2021. They include names from numerous industries, such as oil and gas, semiconductor, cybersecurity, clean energy, healthcare, and retail.
Given the surge in crude oil prices, it’s no surprise that energy stocks are among the topmost winners in 2021. Meanwhile, growth investors have focused on leading semiconductor and cybersecurity players that offer cutting-edge products and solutions for metaverse, artificial intelligence (AI), and cloud computing segments.
Despite the significant increase in their price tags, most of these best-performing stocks still offer substantial upside that can justify a spot on long-term portfolios. Therefore, interested reads might want to keep them on their radar. With that information, here is our list of some of the best-performing stocks of 2021:
- Atlassian (NASDAQ:TEAM)
- Devon Energy (NYSE:DVN)
- Diamondback Energy (NASDAQ:FANG)
- Ford Motor (NYSE:F)
- Fortinet (NASDAQ:FTNT)
- Intuitive Surgical (NASDAQ:ISRG)
- KraneShares Global Carbon ETF (NYSEARCA:KRBN)
- Moderna (NASDAQ:MRNA)
- NXP Semiconductors (NASDAQ:NXPI)
- SPDR S&P Retail ETF (NYSEARCA:XRT)
Best-Performing Stocks: Atlassian (TEAM)
52-Week Range: $198.80 – $483.13
Australia-based Atlassian is known for its workflow management platform that offers project planning as well as office collaboration tools. Management has been shifting to a cloud computing business model that helps generate robust free cash flows.
Atlassian released first-quarter of fiscal year 2022 results in late October. Revenue rose 34% year-over-year (YOY) to $614 million. Adjusted net income jumped 53% YOY to $118.3 million, or 46 cents per diluted share.
Free cash flow stood at $59 million during the quarter. Yet, looking ahead, management anticipates that free cash flow may not be as strong as it was in fiscal 2021 due to the cloud migration strategy.
TEAM stock is currently trading at $390 territory, up 67% YTD. Atlassian shares are not cheap at a hefty 42 times trailing sales. But for now, investors seem to be focused on the underlying resilience of its business rather than being concerned about valuations. The 12-month median price forecast for TEAM stock stands at a whopping $500.
Devon Energy (DVN)
52-Week Range: $14.93 – $45.56
Dividend Yield: 1.2%
Based in Oklahoma City, Devon Energy is one of the largest energy companies focusing on oil and gas exploration, production, and transportation in North America.
Devon released Q3 results in early November. Revenue increased 225% YOY to $3.5 billion. Net earnings came in at $838 million, or $1.24 per diluted share. Free cash flow skyrocketed eight fold from the end of 2020, reaching a record $1.1 billion during the third quarter.
Surging crude prices have contributed to significant revenue and earnings growth. Investors in DVN stock benefit from a fixed quarterly dividend as well as an extra variable dividend up to 50% of excess cash flows.
Additionally, Devon announced a $1 billion share repurchase program.
DVN stock currently hovers at $42 per share, up 170% in 2021. Shares are trading at 8.3 times forward earnings and 2.8 times trailing sales. The 12-month median price forecast for Devon stock stands at $51.
Best-Performing Stocks: Diamondback Energy (FANG)
52-Week Range: $44.62 – $117.71
Dividend Yield: 1.9%
Texas-based Diamondback Energy is another oil and gas producer that has seen mouth-watering returns in recent months. The company operates exclusively in the Permian Basin.
Diamondback reported strong Q3 results on Nov.1. Revenue grew by 165% YOY to $1.9 billion. Adjusted net income stood at $536 million, or $2.94 per diluted share. The company generated $740 million in free cash flow during the quarter.
The company is planning to return half of its free cash flow to stockholders in the fourth quarter. As a result, the board has approved a share repurchase program.
FANG stock is at slightly above $100 per share, up 120% YTD. Shares are trading at 5.9 times forward earnings and 3.5 times trailing sales. The 12-month median price forecast for FANG stock stands at $135.
Ford Motor (F)
52-Week Range: $8.43 – $21.49
Dividend Yield: 2%
Dearborn, Michigan-based legacy automaker Ford manufactures automobiles under the Ford and Lincoln brands. The company boasts around 14% market share stateside and a 7% share in Europe.
Ford announced Q3 results in late October. Total revenue declined 5% YOY to $35.7 billion, mainly due to the global semiconductor shortage. Ford generated a net income of $1.8 billion and adjusted free cash flow of $7.7 billion during the third quarter.
Despite chip shortages and inflation concerns, Ford’s revenue and profits continue to benefit from strong margins. Also, a potential increase in semiconductor availability should boost top line growth.
What has recently excited Wall Street is that Ford has made substantial progress in the electric vehicle (EV) market. The pipeline includes F-150 Lightning trucks and the Mustang Mach-E. Management forecasts EVs to account for close to half of its global vehicle sales volume by as early as 2030.
F stock currently sells for $20 per share, up 130% YTD. It is trading at 10.5 times forward earnings and 0.6 times trailing sales. The 12-month median price forecast for Ford stock stands at $20. Therefore, interested readers might want to wait for a potential pullback before hitting the buy button.
Best-Performing Stocks: Fortinet (FTNT)
52-Week Range: $137.31 – $355.35
Sunnyvale, California-based cybersecurity group Fortinet provides products and services for networks, cloud, applications, and mobile environments. Its products include firewalls, unified threat management appliances and network security, as well as the security platform, Security Fabric.
Fortinet released Q3 results in early November. Total revenue increased 33% YOY to $867 million. Non-GAAP net income stood at $165.9 million, or 99 cents per diluted share. Free cash flow soared 77% YOY to $330 million.
Recent metrics suggest that the global cybersecurity market “is projected to grow from USD 165.78 billion in 2021 to USD 366.10 billion in 2028 at a CAGR of 12.0% during the 2021-2028 period.” Therefore, Fortinet is likely to see continued top line growth, too.
Management is guiding for 29% YOY revenue growth for the full year. On a side note, in mid-December, the company joined the Nasdaq-100 index. FTNT stock currently hovers at $335 territory, and surged 125% YTD.
Shares command a premium at 74 times forward earnings and 17.7 times trailing sales. The 12-month median price forecast for Fortinet stock stands at $380.
Intuitive Surgical (ISRG)
52-Week Range: $227.47 – $369.69
Sunnyvale, California-based Intuitive Surgical is known for its robotic da Vinci Surgical System, used in minimally invasive surgeries. The company also offers various accessories and services for the system.
Intuitive announced Q3 results on Oct. 19. Revenue increased 30% YOY to $1.4 billion. Non-GAAP net income stood at $435 million, or $1.19 per diluted share, up from $334 million in the prior-year quarter.
The medical group dominates the global robotic surgery market with an almost 80% market share. Metrics suggest: “The global surgical robots market size was valued at USD 2.3 billion in 2020 and is expected to grow at a compound annual growth rate (CAGR) of 21.6% from 2021 to 2028.”
Therefore, as robotic-assisted surgery continues to gain further adoption, Intuitive should see further top line growth as well. ISRG stock sells around $358, up 31% this year.
But shares are not cheap at 61 times forward earnings and 22.9 times trailing sales. The 12-month median price forecast for Intuitive stock stands at $370.
Best-Performing Stocks: KraneShares Global Carbon ETF (KRBN)
52-Week Range: $24 – $54.79
Expense Ratio: 0.78% per year, or $78 per $10,000 invested annually
Wall Street has been paying increased attention to the alternative energy space. Therefore, our next choice is an exchange-traded fund (ETF) that enables investors to participate in emissions trading. The fund waas first listed in July 2020, and net assets stand at $1.57 billion.
Emissions trading is a “cap-and-trade” system, whereby a “‘cap’ is set: a limit on the total number of emissions…‘Trading’ takes place through transactions in units constituting the right to produce a fixed volume of greenhouse gas emissions. The number of available units is limited, giving them a financial value. Market supply and demand determines the value (and therefore the price) of units.”
Our fund, the KraneShares Global Carbon ETF, provides access to the carbon allowances futures market. It tracks the returns of the HS Markit Global Carbon Index. The cap-and-trade carbon allowances covered involve the European Union Allowances (EUA), California Carbon Allowances (CCA) and the Regional Greenhouse Gas Initiative (RGGI).
The ETF might appeal to readers who believe the cost of carbon emissions will continue rise. In that case, KRBN would benefit. So far in 2021, the fund is up over 98%, and hit a record high in December.
52-Week Range: $102.66-$497.49
Cambridge, Massachusetts-based Moderna needs little introduction. As a commercial-stage biotechnology name, it has developed one of the leading vaccines against Covid-19. Prior to the pandemic, its focus has been on mRNA therapeutics for infectious, cardiovascular, and immuno-oncology diseases.
Moderna released Q3 results on Nov. 4. Revenue was $5 billion. A year ago, it had been $157 million. Net income came in at $3.3 billion, compared to a net loss of $233 million a year ago. Cash and equivalents ended the quarter at $15.3 billion.
Moderna’s Covid-19 vaccine generated billions of dollars in profits in 2021. Given the increasing concern regarding the omicron and other potential new variants, analysts predict vaccine revenue to stay high in the coming quarters. Aside from the Covid-19 vaccine, Moderna has 37 mRNA products in the pipeline, including vaccines for Zika, HIV, and the seasonal flu.
MRNA stock hovers around$247 per share, up over 135 % YTD. despite the run-up in price, MRNA shares look cheap at 10.6 times forward earnings and 9.2 times trailing sales. The 12-month median price forecast for Moderna stock stands at $304.
Best-Performing Stocks: NXP Semiconductors (NXPI)
52-Week Range: $154.75 – $239.91
The Netherlands-based NXP Semiconductors manufactures high-performance mixed-signal products. It boasts a substantial market share especially in the automotive market.
NXP announced Q3 results on Nov. 1. Revenue went up by 26% YOY to $2.9 billion. Non-GAAP operating income came in at $959 million, up 64% YOY. Free cash flow stood at $724 million.
The automotive industry accounted for roughly half of the total revenue in the third quarter. Analysts highlight that the increasing share of semiconductors and electronic components in EVs will continue to be a key long-term growth driver.
NXPI stock is at $225 territory, up 41% this year. Shares are trading at 18.9 times forward earnings and 6.1 times trailing sales. The 12-month median price forecast for NXPI stock stands at $247.
SPDR S&P Retail ETF (XRT)
52-Week Range: $62.86 – $104.31
Dividend Yield: 0.8%
Expense Ratio: 0.35% per year
Our final discussion also centers around an ETF. The SPDR S&P Retail ETF invests in a range of retail businesses stateside. The fund started trading in June 2006, and net assets stand at $781 million.
XRT has 109 holdings and tracks the returns of the S&P Retail Select Industry Index. The top 10 names account for roughly 14% of total assets. Therefore, the fund is not top heavy and price moves in a single stock do not have a substantial impact on the value of the fund.
In terms of the sub-sectoral breakdown, internet and direct marketing retail has the largest weighting with 22%. Next in line are apparel retail (19%), automotive retail (18%), specialty stores (16%), and food retail (6%).
Among the leading businesses on the roster are Chewy (NYSE:CHWY), Leslie’s (NASDAQ:LESL), Sprouts Farmers Market (NASDAQ:SFM), Groupon (NASDAQ:GRPN), AutoZone (NYSE:AZO) and Murphy USA (NYSE:MUSA).
Year-to-date, XRT has soared by 36%, and hit an all-time high in mid-November. Trailing price-to-earnings (P/E) and price-to-book (P/B) ratios stand at 10.37x and 2.96x. I like the diversity of the fund and would look to buy the dips.
On the date of publication, Tezcan Gecgil did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Tezcan Gecgil, Ph.D., has worked in investment management for over two decades in the U.S. and U.K. In addition to formal higher education in the field, she has also completed all three levels of the Chartered Market Technician (CMT) examination. Her passion is for options trading based on technical analysis of fundamentally strong companies. She especially enjoys setting up weekly covered calls for income generation.