2014 has been a pretty lacklustre year for investors in the Australian share market. Funds that track the progress of the ASX 200 and All Ordinaries indices have returned just 2% in the five months of 2014 so far, however investors in individual stocks have been able to far outperform by holding these three high-flying stocks.
Western Areas Limited (ASX: WSA) has benefitted from a 50% jump in the nickel price over the last 12 months due to export bans from other producer countries. The Australian nickel producer has long-life mines that were profitable at lower prices and are expected to be wildly profitable at the currently elevated prices. Excited investors in Western Areas have pushed up the share price by 93% in 2014 so far, with few signs of slowing down as the company aims to increase mine output to take advantage of higher prices.
APN News and Media Limited (ASX: APN) has been another big winner for shareholders in 2014. A 78% rise in 2014 has been as a result of the strong performance of the company’s Australian and New Zealand radio and advertising assets. APN’s management is cleverly divesting underperforming assets and upping investment in growing assets. The key risk to investors in APN is weakness in its dominant Australian and New Zealand radio network.
Finally, an interesting little company that has made a splash in 2014 is TFS Corporation Limited (ASX: TFC). Shares in the company are up nearly 72% so far this year as the company gets closer to making some serious profits from its Indian Sandalwood plantations. Indian Sandalwood oil is in demand from cosmetics and pharmaceutical companies where supply is well below demand. Investors have finally cottoned onto the potential of the company, which is expected to continue benefitting from the worldwide undersupply of the oil.
These companies highlight that investors can greatly outperform the index by investing in the right companies. Admittedly investors should not expect that all picks will deliver 70%+ returns over five months, but investing in stocks with great futures such as those recommended by the Motley Fool Share Advisor Service, can lead to great returns over time.
We hear it over and over from investors, "I wish I had bought Altium or Afterpay when they were first recommended by The Motley Fool. I'd be sitting on a gold mine!" And it's true.
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*Extreme Opportunities returns as of June 5th 2020
Motley Fool contributor Andrew Mudie does not own shares in any companies mentioned. You can find Andrew on Twitter @andrewmudie
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