Since 1993, I have offered an annual list of 10 stocks. Nine are culled from the choices of experts I trust, and I include one of my own. For the fifth year in a row, those annual selections beat the S&P 500 index. This kind of streak isn’t supposed to happen, and readers should be warned that there’s no guarantee it will continue. Still, allow me to celebrate a bit. The 2020 results again illustrate the importance of diversification. Four of the 10 stocks fell in value (including one that went bankrupt), but five rose more than 25% each (including two that more than doubled). Overall, my selections returned an average of 28.8% over the past 12 months, compared with 16.3% for the S&P 500. (Prices and returns are as of November 6.)SEE MORE 14 Hot Upcoming IPOs to Watch For in 2020 and 2021
Once again, Terry Tillman, an analyst with Truist Securities (formerly SunTrust Robinson Humphrey), came through big-time. My annual selections from Tillman’s “buy” recommendations have beaten the S&P now for nine years in a row. His 2020 choice, Okta (symbol OKTA), returned a whopping 115.5%. For 2021, I like his choice of Upland Software (UPLD, $47), based in Austin, Texas, which offers digital tools for companies to manage their customer base. This small-cap stock is risky. Profits are still elusive, but Upland has more than 10,000 customers, and revenues rose in the most recent quarter by 35% over the same period last year.
The other huge winner in 2020 was Nvidia (NVDA), maker of microprocessors for applications such as artificial intelligence and PC gaming. Returning 180.9%, it was a standout in the portfolio of another regular on my list, Jerome Dodson of Parnassus Endeavor (PARWX). Dodson, a value maven, has lately been scooping up shares of another chipmaker, Intel (INTC, $45), which moved in the opposite direction of Nvidia in the past year, falling 18.9%. Intel looks like an unusual tech bargain, with a price-earnings ratio of 10 and a 2.9% dividend yield.
In September, Will Danoff celebrated 30 years managing Fidelity Contrafund (FCNTX). His recent performance has not been spotless. The fund, with $125 billion in assets, has failed to beat its large-company benchmark in two of the past five years. But I