best performers since 1980

I’ve been doing some catch-up reading on banks recently and bumped into this fascinating table from a recent presentation by M&T Bank (NYSE:MTB). This table shows the best 30 stocks (as of May 31) out of the entire universe of 567 U.S.-based stocks traded publicly since 1980.



Of course this is not the list of the best 30 companies. For one thing, it doesn’t include any company that went public after 1980 so many of the best-performing stocks since then have been left out including biotech companies such Amgen (NASDAQ:AMGN) and Biogen (NASDAQ:BIIB) and internet companies such as Priceline (NASDAQ:PCLN). [Not to mention Microsoft.]

But there are so many interesting things about this table.

Fourteen companies have compounded faster than Berkshire Hathaway (NYSE:BRK.B), although a few by just the tiniest bit, including names that I would not have thought of such as Hasbro (NASDAQ:HAS) and Valspar Corp. (NYSE:VAL), which has just been acquired by another surprising top performer Sherwin-Williams Co. (NYSE:SHW).

I would never have guessed that Eaton Vance Corp. (NYSE:EV) topped the list with a whopping 23.3% CAGR.

Financials, industrials and consumer stocks dominate the list. There are seven financial stocks, 11 consumer stocks and five industrial stocks.

There were only two materials companies (now only one with Sherwin-Williams acquiring Valspar), one information technology company, one energy company and zero utility companies. I’m actually very surprised that there is an energy company on the list. Maybe there’s something special about HollyFrontier (NYSE:HFC).

Berkshire Hathaway and Warren Buffett (Trades, Portfolio)’s favorite sectors are financials, consumers and industrials.

Of the list 10% are specialty retailers, a segment that has been absolutely crushed recently by the Amazon (NASDAQ:AMZN) effect. Can Gap (GPS), L Brands (LB) and V.F. Corp. (VFC) ride out this Amazon storm and continue their 37-year track record?

The following companies did not surprise me: TJX Companies (TJX); Stryker (SYK); Danaher (DHR); Walmart (WMT); Berkshire Hathaway; M&T Bank; Walgreens (WBA); Astronics (ATRO); and Church & Dwight (CHD).

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Here's Grahamites follow-up article on the best performers for the last decade.  Topping the list was Netflix.  AMZN is tenth.  AAPL is 40th.  ROST is 45.

A few observations:

None of the companies on the since-1980 top-30 list made it to the top 60 list for the last decade.

Very few stocks on the top 30 list made it guru investors’ portfolios. Most notably, Transdigm (NYSE:TDG) is owned by Wally Weitz, Priceline (NASDAQ:PCLN) owned by Dave Rolfe and Ebix (NASDAQ:EBIX) is owned by our lovely founder Charlie Tian.

Technology and biopharmaceutical companies dominated the list. Three of the FAANG stocks made the top 60: Netflix (NASDAQ:NFLX), Amazon (NASDAQ:AMZN) and Apple (AAPL). Google’s parent company Alphabet (GOOG) surprisingly only ranks No. 299 with a 10-year annualized return of “only” 13.5%. Equally impressive is the new biotech giants such as Regeneron (NASDAQ:REGN) and Incyte (NASDAQ:INCY) with mind-blowing 10-year CAGRs north of 35%.

For those of you who are curious about where Berkshire (BRK.A) falls in the list – Berkshire Hathaway ranks No. 737 with a 10-year annualized return of 8.8%.

What about some of Berkshire’s largest holdings?

Wells Fargo: No. 914, 10-year annualized return of 7.454%.
Coca Cola (NYSE:KO): No. 740, 10-year annualized return of 8.746%.
American Express: No 1240, 10-year annualized return of just 5%.

Among the worst performing stocks of the last decades are a few easily recognizable names:

Fannie Mae (FNMA) and Freddie Mac (FMCC) – both suffered a negative 28% CAGR.
J.C. Penney (NYSE:JCP) – negative 23% CAGR.
American International Group (AIG) – negative 24.75%.
Sears holdings (SHLD) – negative 21.69%.