Many investors could be left licking their wounds as we close out the year but the dismal performance on our market belies the fact that there are some ASX stocks that are 5- to 10-baggers – and I’m not talking about the penny dreadfuls or playing microcap roulette.
The strong performance of these stocks stand in contrast to the circa 7% drop in the S&P/ASX 200 (Index:^AXJO) (ASX:XJO) index no thanks to the collapse in the Origin Energy Ltd (ASX: ORG) share price, Telstra Corporation Ltd (ASX: TLS) share price and Westpac Banking Corp (ASX: WBC) share price.
This isn’t to say we didn’t have blue-chips that have outperformed in 2018. The RESMED/IDR UNRESTR (ASX: RMD) share price is up a staggering 44% this year, while CSL Limited (ASX: CSL) share price surged 32% and Goodman Group (ASX: GMG) share price increased 28%.
But if you want the 10-baggers, you will need to move up the risk curve and look at ASX small cap stocks. The good news is that you don’t have to move all the way to the smallest end of the market as there are a few with market caps of over $100 million that have left their shareholders laughing all the way to the bank!
The three best performers in this category have generated an average return of 931% in 2018 and most would not have heard of the companies.
The stock that can claim the crown of being the best performer with a market cap above $100 million is the Bidenergy Ltd (ASX: BID) share price.
The BID share price raced up 1,657% over the year to trade at $1.10 on Friday as strong results, overseas expansion and contract wins excited investors.
The energy spend management software company posted a 55% surge in FY18 revenue to $4.1 million in August and announced a large contract win this month with Cushman & Wakefield Australia that would lift its annualised subscription revenue to $3.4 million.
The runner-up is the City Chic Collective Ltd (ASX: CCX) share price, which surged 712% over the year to $1.02.
This is the former apparel retailer Specialty Fashion Group, which sold some of its brands to another strong small cap performer Noni B Limited (ASX: NBL), although the Noni B share price couldn’t keep pace with the City Chic share price.
The old Specialty Fashion share price was a real dog but divesting its underperforming brands has reshaped the company with City Chic focusing on plus size women’s fashion.
In third spot is the Purifloh Ltd (ASX: PO3) share price with its not too shabby 424% rise over the 12-months to $3.83.
The water and air purification technology company’s share price got a huge boost after US billionaire, William ‘Bill’ Parfet, pumped $9.6 million into the company to buy a 16.8% stake in Purifloh at $2.40 a share.
Looks like Parfet had a great 2018!
Motley Fool contributor Brendon Lau owns shares of CSL Ltd., Telstra Limited, and Westpac Banking. The Motley Fool Australia owns shares of and has recommended Telstra Limited. The Motley Fool Australia has recommended ResMed Inc. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.