The year 2018 has come and gone. For most publicly traded companies, it was a bad year. But a handful of businesses and individuals stood out from the crowd and had great runs in the year that passed. Similar to Apple Inc during the late 2000s recession, there are always stocks that become runaway bulls in bear markets. Despite the TSX losing 15% of its value last year, there were a surprising number of stock market successes in the same 12-month period.
In this article I’ll be chronicling five of them–starting with one whose fortunes may not look rosy this year, but had a great run in the last.
Despite a late-year sell-off, Canada Goose shares returned about 46% in 2018, soundly beating the TSX average. It’s no surprise. With a massively popular line-up of luxury parkas, the company is growing earnings at about 34% year over year. Canada Goose is currently facing the risk of Chinese boycotts over the Meng Wanzhou fiasco which, because it depends on China for growth, could hurt the stock. But for 2018, at least, Canada Goose was a winner.
Shopify shares returned 37% in 2018. This is smaller than Canada Goose’s return, but I ranked Shopify higher on the list because it ended the year without any major issues. Shopify’s internal data shows that it posted massive sales in the week of marijuana legalization and on Black Friday weekend. Assuming the company keeps up its frothy growth and starts turning profits, 2019 should be another big year for Shopify.
Tilray Inc (NASDAQ:TLRY)
Tilray is one of the few cannabis stocks that remains up from its late summer prices. The stock IPO’d at just $17.50 and ended the year at over $70. Although the stock is way down from its fall high of $214, it’s still up 300% from its IPO. This stock’s fundamentals don’t quite justify its price, but it had an amazing run nonetheless.
On the topic of cannabis stocks, I should mention cannabis short sellers like Andrew Left of Citron Research. With the Horizons Medical Marijuana Life Sciences ETF down 44% year-to-date, anyone shorting cannabis shares after mid-October would have made a pretty penny by today. As the most vocal cannabis shorter of the year, Left and his company Citron get my vote for the second place stock market winner of 2018.
Finally we have Lululemon, whose shares ended 2018 up 51%. This falls short of Tilray’s return, but I rank Lululemon higher because its price is more justified by fundamentals. Lululemon grew earnings at 60% year-over-year in its most recent quarter, while having a 27% return on equity and a 12% profit margin. Despite this frothy growth, Lululemon trades at just 27 times projected future earnings with a very low PEG ratio of 1.36. Because of its solid returns last year and strong position in this one, Lululemon earns my nomination for biggest TSX winner of 2018.
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Fool contributor Andrew Button has no position in any of the stocks mentioned. Tom Gardner owns shares of Shopify. The Motley Fool owns shares of Shopify and Shopify. Shopify is a recommendation of Stock Advisor Canada.