Not every publicly traded company is straight-laced and easy to understand. Many companies have taken an unorthodox approach on the road to success. Whether it is a niche business, a strange origin story, or an odd founder, some of the best-performing stocks in the world have been issued by organizations that can best be described as “quirky.” And different doesn’t necessarily equate to bad when it comes to founding and running a company. Many of the most successful companies in history were started by people who consider themselves to be oddballs and outsiders, from Steve Jobs and Bill Gates to Elon Musk and Richard Branson. Taking a quirky or different approach to running a business often leads to disruption, outperformance, and, ultimately, dominance. In this article, we celebrate the offbeat by looking at seven quirky stocks that beat the market.
|WWE||World Wrestling Entertainment||$91.60|
|SAIC||Science Applications International||$107|
|BRCC||Black Rifle Coffee||$5.08|
Quirky Companies: AFLAC (AFL)
Supplemental insurance company AFLAC (NYSE:AFL) is about as quirky as insurance companies get. The company’s mascot is a quaking duck, and, like a 1980s era rock band, the firm is huge in Japan. Currently, about 70% of Georgia-based AFLAC’s annual revenue comes from the Japanese market.
Why? It turns out that Japan’s employer-sponsored insurance benefits are not as robust as in the U.S., nor is the government-funded healthcare system as comprehensive as in countries such as Canada. As a result, many Japanese citizens buy supplemental health-and-life insurance policies.
What’s fascinating is how AFLAC grew its business in Japan. Entering the market in 1974, AFLAC employed what it called “insurance ladies” that were modeled on Avon’s “cosmetic ladies.” These were women who literally knocked on people’s doors, selling supplemental insurance policies. In the 1990s, AFLAC further grew its market share in Japan by selling insurance policies via the mail and was one of the first insurers to go online in the country. The result is that today, the majority of AFLAC’s revenue is generated in Japan.
AFL stock has been a consistent outperformer over the years. Since the 2008-09 financial crisis, the company’s share price has risen more than 650%.
The Wall Street Journal recently profiled Dillard’s (NYSE:DDS), a department-store chain, highlighting its many eccentricities and noting that its stock has outperformed many popular tech companies, including both Tesla (NASDAQ:TSLA) and Apple (NASDAQ:AAPL) since the pandemic occurred in 2020.
One of the things that sets Dillard’s apart from other department stores is the fact that its daily operations continue to be run by the original Dillard family. The company currently has about 280 stores, most of which are concentrated in the southern U.S., primarily in Texas and Florida.
Brothers William and Alex Dillard continue to run the company and preach old-fashioned values that include careful debt management, measured growth, and employee loyalty. The brothers reportedly still visit stores on a weekly basis to see which products are selling well.
Many of the staff at the department stores have worked for the company for decades. And, unlike most other retailers, Dillard’s has not focused on bolstering its online sales. Instead, the company prioritizes giving shoppers in-person attention. While this approach may seem to go against the grain, there’s no arguing with the results.
DDS stock has gained more than 1,500% since April 2020 at the onset of the pandemic. The company’s market value is now on par with that of Macy’s (NYSE:M), although Dillard’s has less than a third of Macy’s annual revenue. The brothers’ prudent approach led Dillard’s to avoid the inventory glut that has plagued many other retailers over the last year.
Quirky Companies: Berkshire Hathaway (BRK.A / BRK.B)
I’m focusing on Warren Buffett’s entire company, not just its stock portfolio. And as a company, Berkshire Hathaway (NYSE:BRK.A / BRK.B) is pretty quirky. For starters, it’s based in Omaha, Nebraska, far from any financial hub. The company’s website is about as basic as a website can get, and it has no human resources department or marketing team. The firm’s headquarters where Warren Buffett works employs fewer than 50 people, and, by most accounts, he has employed the same, small team for more than 30 years.
Additionally, Berkshire Hathaway’s two senior leaders, Buffett and Charlie Munger, are both in their 90s now and still running the firm’s day-to-day operations. And Berkshire’s holdings include an eclectic mix of companies ranging from the Acme Brick Company and Benjamin Moore, a paint supplier, to the Dairy Queen fast food chain and Fruit of the Loom underwear. Both Buffett and Munger frequently discuss publicly their contempt for Wall Street, with Munger likening bankers to “heroin addicts.”
Yet the company inspires a cult-like devotion among its shareholders, some 40,000 of whom descend on Omaha for Berkshire’s annual meeting, nicknamed “Woodstock for capitalists.”
If you took Warren Buffett out of the picture and looked at Berkshire Hathaway on its own, it would seem like a very odd company. Yet the stock has been a juggernaut, delivering a 225% return over the past decade.
However, the stock is also quirky. Specifically, Buffett refuses to pay dividends to Berkshire’s shareholders, and the Class A stock has never split, resulting in it currently trading at more than $450,000 for a single share.
Stock indexes regularly have to make technical adjustments just to continue trading BRK.A stock. That’s weird.
American footwear company Crocs (NASDAQ:CROX) has taken its novelty foam clogs mainstream. Before the pandemic, Crocs were largely sold in surf shops and along boardwalks at the beach. However, thanks to a clever and persistent, viral marketing strategy undertaken during the pandemic, Crocs can now be found in shoe stores across North America, and they are a hot item online.
Key to Crocs’ success is that the firm invests 8% of its revenue in marketing, spending more than $200 million annually on internet influencers, brand partnerships, and digital ad campaigns. Celebrities who have endorsed Crocs in recent years include actress Drew Barrymore and the rock band KISS.
In one of its quirkier promotions, Crocs ran an online-branding campaign comprised entirely of emojis. It has also promoted its foam clogs using online memes rather than traditional advertisements.
The results have been impressive, with the company’s sales up 200% since 2019. In the last five years, CROX stock has gained 615%.
Many people discovered the casual shoes while working and learning from home during the pandemic. But unlike other companies that thrived during the pandemic only to crash in the past year, Crocs’ sales gains have stuck. In February of this year, the company forecast another record year of growth in 2023.
World Wrestling Entertainment (WWE)
Wrestling isn’t everybody’s cup of tea. But it sure is a successful business. World Wrestling Entertainment (NYSE:WWE) has succeeded as both a company and a stock by fully embracing all the quirks of professional wrestling — from the spandex pants and body slams to broken tables and smack talk.
Few, if any, entertainment stocks have outperformed WWE. In the last five years, the company’s share price has grown nearly 150%, including a 30% gain so far in 2023. The success comes despite a lot of drama behind the scenes that includes sexual misconduct allegations, executive departures, disputes with top performers, and a rumored sale of the company that has yet to materialize.
Ironically, none of the behind-the-scenes drama has hurt WWE stock. If anything, it seems to have bolstered the share price.
Most recently, Vince McMahon, who grew the company into the juggernaut it is today, returned to lead World Wrestling Entertainment after taking time away following allegations of sexual misdeeds. McMahon’s return led to his own daughter, Stephanie, resigning as co-CEO and chairwoman. It’s her second time leaving WWE. Now McMahon says he is preparing to sell World Wrestling, with possible suitors including Disney (NYSE:DIS) and Comcast (NASDAQ:CMCSA). How it all plays out remains to be seen. But it’s sure to be dramatic.
Quirky Companies: Science Applications International (SAIC)
Science Applications International (NYSE:SAIC) is often referred to as the “Pentagon’s IT help desk.” In actual fact, Science Applications provides information technology support to the U.S. federal government in Washington, D.C. A niche business, Science Application International is not very well-known outside of the DC area. Yet, owing to SAIC’s lucrative government contracts, it is an extremely successful company whose stock has been an exceptional performer. Since its IPO a decade ago, SAIC stock has increased 255%.
Due to the sensitive nature of its work with the government and the data that it has access to, Science Applications purposely keeps a low profile. Over the years, it has spun off and split its business several times to ensure that it can continue bidding on government contracts without running afoul of federal conflict-of-interest regulations.
It has also invested nearly $800 million to expand its presence in the intelligence industry through classified contracts, obtaining security clearances, and building internal security infrastructure. This may sound too cloak-and-dagger for some. But Science Applications has grown into a company with a $6 billion market cap.
Black Rifle Coffee (BRCC)
Lastly, we come to Black Rifle Coffee (NYSE:BRCC), or BRC as it is commonly known. This is not your typical coffee company. It was founded by a former Green Beret soldier and is operated by ex-members of the U.S. military. It also has a unique business model compared to more conventional coffee chains such as Starbucks (NASDAQ:SBUX) and Dunkin’ Donuts. Rather than focus on a traditional retail network of coffee shops, Black Rifle Coffee primarily mails its coffee to consumers through a monthly subscription service.
And, despite its military connection, Black Rifle Coffee is known for its humor. The company publishes an online magazine called “Coffee or Die” that focuses on military and law enforcement issues, with a big helping of humor.
Its jokes also frequently trend on Twitter and other social media platforms. And the company makes regular, charitable donations to veteran organizations. These quirks have led Black Rifle Coffee to attract more than 100,000 subscribers who pay a monthly fee to have its coffee shipped to them.
Black Rifle Coffee had the misfortune to go public via a special purpose acquisition company (SPAC) in February 2022 as the market was tanking. As a result, BRCC stock has declined 48% since it went public. However, the company’s future looks bright as it estimates its total addressable market at $4 billion annually. Black Rifle Coffee is also building a retail coffee shop network beyond its home base in Utah.
On the date of publication, Joel Baglole held long positions in CSU, AAPL and DIS. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.