Investing in a stock that multiplies its share price by a factor of ten is the elusive holy grail for many investors. While such ten-baggers are very rare, and the US is the largest stock market in the world, it is not the first one when it comes to this type of stock, writes eToro analyst for Romania, Bogdan Maioreanu.
We looked in the main 16 developed markets indices in the past 10 years, looking for the elusive ten-baggers stocks. They make only an average of 2.7% of total stocks listed in these indices. While most would expect that the largest stock market in the world to give the largest percentage of ten-baggers, in fact Australia is the one leading. Whilst the tech and NVIDIA-led US ranks very well, it’s surprisingly Australia’s miners that dominate, followed by Sweden and Germany. Whilst Korean chemicals (Kumyang) to Japanese semis equipment (Lasertec) have done even better than the US AI-chips giant, in a timely reminder of global opportunities.
Australia had 8.9% of its largest stocks ten-baggers over the past decade. This is near double the next highest market. It’s led by lithium stocks Pilbara (320x) and Liontown (135x), with miners making up 65% of the list. Sweden follows, led by tech Fortknox (60x) and defence Invisio (39x). Then Germany with biofuel Verbio (19x) and construction software Nemetschek (18x). At the other extreme, Italy has none and UK only Games Workshop (14x) and JD Sport (10x). With France only Sartorius Biotech (9x) and Esker (10x) software.
While Romania stock exchange is not among the developed ones, it produced its share of tenbaggers, with 2.4% of the total shares listed in the past 10 years in the Refinitiv all share index of 206 stocks exceeding the 10x appreciation. While we are below the average of the 16 indexes, stocks like Chimcomplex (35x), Carbochim (29x), Teraplast (21x) and Independenta (12x) rewarded their investors with more than 10x returns.
Across the Atlantic ocean, in the US, twenty-three stocks in the current S&P 500 index have been ten-baggers over the past decade. This represents 4.6% of the current constituents. And is the fourth highest proportion of the global stock indices we analysed. It’s led by a top five of NVIDIA (share price up 118x in ten years), AMD (32x), Tesla (27x), Broadcom (20x), Cadence Design (20x). Tech dominates the list, making up 65% of the ten-bagger constituents. With the rest comprising healthcare (MOH, LLY, DXCM), transport (ODFL, CPRT), financials (MSCI, FICO), and renewables (ENPH).
In this time and age when investing in assets across the globe is very easy, 65% of the Romanian investors were looking for the winning stocks in Europe, 36% in US, 17% in Emerging Markets (like South America, Eastern Europe, Middle East, Asia), 13% in UK, 5% in China, 4% in Japan and only 2% were looking to Australia, according to the latest eToro Retail Investors Beat survey.
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