A 10-bagger describes an investment that has increased 10 times in value.
The term '10-bagger' was first coined by Fund Manager Peter Lynch in his book One Up On Wall Street. Landing one of these is every investor's dream.
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Which stock just joined the exclusive club?
Supply Network Ltd (ASX: SNL) is up 1,058% over the past 5 years at the time of writing.
This week, it reached a 52-week high of $40.35. On 8 May 2020, it traded at just $3.45.
That means the company is a 10-bagger for those who invested 5 years ago.
Even for recent investors, it has been an incredibly successful investment. The company is up 94% over the past year and 22% for the year to date, far outpacing the S&P/ASX All Ordinaries Index (ASX: XAO), which is down 0.5% so far this year.
What has driven this run?
Supply Network has been around since 1976. It sells aftermarket truck and bus parts in Australia and New Zealand through its network of Multispares branches. The majority of its recent growth has come from its truck parts business.
The company is supported by strong industry tailwinds, including Australia's ageing truck fleet, with the average truck nearly 15 years old. Trucks have also become increasingly complex in Australia, with up to 30,000 parts per vehicle. This has driven strong demand for the ASX All Ords company, with its 10-year compound annual revenue growth rate (CAGR) sitting at around 14%. Recently, it has been even higher, delivering 18% revenue growth in the most recent half.
Has the company peaked?
Management has stated that revenue growth is likely to moderate towards its 10-year average. However, new ambitious 3-year targets have also been set. The company is hoping to achieve $450 million in revenue by FY2028. Based on its history of hitting targets ahead of time, the company is well-positioned to continue delivering for its shareholders.
Other notable ASX 10-baggers
Supply Network certainly isn't the first ASX company to deliver 10-bagger returns for shareholders. CSL Ltd (ASX: CSL) rose from $13 in 2006 to more than $313 in 2023, rewarding its investors. Meanwhile, Pro Medicus Ltd (ASX: PME) increased from $26 in 2020 to an all-time high of $298 earlier this year. Telix Pharmaceuticals Ltd (ASX: TLX) has achieved 10-bagger status over an even shorter time frame. In fact, over the past 5 years, it is up a staggering 1,1723%, making it one of the biggest ASX 200 success stories.
