Want to find another Splitit or Orthocell? Your best bet is… patience
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For all the investors that gain when their stock goes up several times, there are thousands more people wondering where they can make the same kind of gains.
Some will say it’s luck, others will say it’s some emerging industry that on one hand is visible enough to capture customers quickly through superior service; the other silent enough so competitors don’t even see the threat until it’s too late.
This week we’ve seen cell therapy play Orthocell (ASX: OCC) skyrocket from 9 cents to 51 cents in a single day – a 377 per cent gain. Why? The Phase III clinical trial of its CelGro technology found that it helps patients with damaged nerves regain sensation and muscle function.
We’ve also seen buy now pay later stock Splitit (ASX: SPT) surge from 20 cents to $2 in 6 weeks after its IPO. While it has now fallen back to $1, gaining five times your IPO price is still impressive.
But these still rank nowhere compared to the biggest gainers on the ASX in the last decade.
Stockhead analysis has found 43 stocks that in 10 years have gained 1000 per cent or more.
While we normally don’t cover large caps, ex-small caps gone big are an occasional exemption. Nevertheless, of these stocks, nearly a third of them still have market capitalisations of $500 million or under.
The biggest gainer is Northern Star Resources (ASX: NST), which listed in 2003 and only raised $5 million at its IPO. In early 2009, in the immediate aftermath of the GFC, the company’s share price was under 2 cents and it only had $82,000 cash left.
But acquisitions of multiple gold projects and positive production figures have led to the company being one of the biggest resource explorers on the ASX with a market cap of $5 billion.
The one other stock that has gained over 10,000 per cent in 10 years only has a market cap of $543 million – Audio Pixels Holdings (ASX: AKP).
Unlike Northern Star, it has not had substantial revenue growth. Ten years ago it had only made $185,000 in the previous half year and in 2018 only made $89,961 in full year revenue.
However it has continued to develop loudspeakers and declared to investors earlier this year it was now “poised to revolutionise the loudspeaker market”.
Among the list you would find familiar names such as Dominos (ASX: DMP) and Webjet (ASX: WEB) whose stories tell themselves.
One notable member was online lottery business Jumbo Interactive (ASX: JIN). Its long term gains have allowed founder & CEO Mike Veverka to make $17.7 million from exercising lower priced options and then selling shares.
The bottom line from all this? Sometimes patience isn’t just a virtue, it can be a cash cow.