We all want to pick the next Amazon.com, Inc. [NASDAQ:AMZN] or Wal-Mart Stores Inc. [NYSE:WMT]. Just take a look at how much each stock has grown since listing on the stock market.
Source: Google Finance
Whether you invested in Amazon or Wal-Mart right after their initial public offerings, you would have been happy. But here’s the best part. You could have invested in either company 10 years after their IPO, and you still would have made amazing returns by now.
Just look at Wal-Mart. By 1996, it had already run up significantly from when it listed in 1972. You might have thought there was not much left to squeeze out of Wal-Mart. But had you sold out, you would have missed out on a share price climb from $11.30 to $68.50 between 1997 and 2000.
The same applies to Amazon. Had you got out when the stock ran up significantly from the late 1990s to 2014, you would have missed out on a 217% return from 2015 to present.
Of course it’s easy to say this in hindsight. But it goes to show that you can still generate amazing returns, even when a stock has significantly run up in previous years.
Is Australian furniture seller, Nick Scali [ASX:NCK] one such growth stock to watch?
Download this free report now and learn the eight rules Warren Buffett applied to grow his first nest egg by 1195% in four short years.
PLUS you’ll get Money Morning every weekday… absolutely free.
Simply enter your email address below and click the ‘Send My Free Report’ button now.
Nick Scali’s Profit Growth
Over the past five years, NCK has generated revenue growth above 10% every year. The business has also had average profit growth of a little over 26% from 2013–17. Yet, investors sold the stock down leading up to the release of their full year results for 2017.
The expectation of lower housing activity is making investors question the growth of new furniture purchases.
Now, I’m not about to tell you that NCK will be the next Wal-Mart or Amazon over the long-term. But I do believe investors have closed the books on NCK’s growth stock a little too soon.
If you want to check out more growth stocks like NCK, click here.
Junior Analyst, Money Morning