As an investor, I’m always trying to find stock investments that will give me high returns in the long term. This enables me to reach my financial goals such as retiring early and paying off my mortgage. Not all stocks provide that kind of performance, but below are two that would’ve turned a £1,000 investment into considerably more!
Streets ahead
JD Sports Fashion (LSE:JD) is a sports retailer, catering to fast-fashion and streetwear desires. The growth over the past 10 years has been very impressive. In December 2012 (eight years ago), the share price was trading around 35p. It currently trades around 717p. So if you invested £1,000 at 35p a share, you’d have received 2,857 shares. At 717p, these 2,857 shares would give you a value of £20,484.
What’s contributed to this surge? In my opinion there’s two main elements. Firstly, the acquisition strategy the business has been on during the past decade. Some brands it has bought over the years since 2012 include Cloggs (2013), GO Outdoors (2016), and Finish Line (2018). Despite the recent news about GO Outdoors, these purchases have allowed JD Sports to grow inorganically at a faster pace than average. This boosted growth is shown via the share price performance.
The second driving factor is the shift in consumer demand towards sports clothing. In particular, the rise of streetwear, and the norm of wearing sports clothing when not playing sport. The stock investment in JD Sports therefore would have reaped rich rewards for long-term investors!
Another high-performing stock investment
Rentokil Initial (LSE: RTO) is another stock that would’ve turned a £1,000 investment into over £10,000 in current value. We’ve got to track back slightly longer than JD Sports to get to this figure, looking back to 2008. At the end of the year the share price was around 35p, and now trades around 480p. £1,000 would’ve bought 2,857 shares, with a current value of £13,713. Not as impressive as the stock investment in JD Sports, but still an exceptional return on the initial amount.
The business provides services mainly relating to pest control and general hygiene. The share price growth over the past decade can be put down to the diversification of services offered. It has expanded significantly, both in offerings and in locations. For example, a joint venture in 2017 saw it become the largest pest control business in India.
The business has also benefited from a rising share price due to socially responsible investors piling in. In 2018 it announced a partnership with Cool Earth in Papua New Guinea to help protect the rainforests. Other awards and accolades for similar endeavours have seen the share price rally as it’s seen as a sustainable and responsible business.
Which company is next?
These two examples show that it’s possible to generate high returns from stock investments. Both firms have shown strong growth over a holding period of around 10 years. So which businesses are now worth buying for the next decade? One stock I’m considering buying right now is HSBC. You can read my reasons for this here.