Between the dual market corrections bookending 2018 and the increasing pessimism surrounding stocks and the global economy, it’s hard to remember that many companies did quite well this year. Blue chippers like Amazon (AMZN), Merck (MRK) and Netflix (NFLX) advanced more than 30% this year, despite steep fourth-quarter drop-offs. But those weren’t the best large-cap growth stocks of 2018.
No, the 10 best-performing large-cap stocks of 2018 all achieved gains of at least 50%—not bad considering the Nasdaq is down 3.6% and the S&P 500 is down 4.25% year to date. Not surprisingly, most of them (seven) are in the technology sector. Two are healthcare companies (including the only stock to double this year); the other is a well-known services company.
My only real takeaways from this list are that healthcare stocks are a good place to be right now—the healthcare sector was the best-performing stock market sector of 2018 (+5.1% as of this writing), and one of only two sectors in the black along with utilities. Technology stocks, despite being basically flat for the year, always have plenty of upside even in a down year. And lastly—don’t rule out another big year for these stocks in 2019. Any stock that still has momentum after the recent slog has a good chance of really getting going when the market breaks out of its current funk.
The 10 best large-cap growth stocks of 2018 might be a good place to start. Here they are, from largest to smallest return. And of course, we still have a few trading days left this year, so this list could change slightly between now and the New Year.
Without further ado…
The Best Large-Cap Growth Stocks of 2018
Dexcom, Inc. (DXCM): +100%
Advanced Micro Devices (AMD): +90%
Atlassian Corporation (TEAM): +77%
Tableau Software (DATA): +75%
Square Inc. (SQ): +72%
Iridium Communications (IRDM): +66%
Advance Auto Parts (AAP): +62%
ABIOMED, Inc. (ABMD): +61%
Fortinet (FTNT): +59%
Veeva Systems (VEEV): +57%
Many of those are familiar names. Advanced Micro Devices had a huge first half of the year after a stagnant 2017, though it has retreated significantly since September. Square made the list of our “Forever Stocks to Buy in 2018,” penned by our CEO and chief investing strategist Tim Lutts back in May. And if you own a car, you may have been to an Advance Auto Parts store.
Not so familiar are Dexcom and Atlassian Corporation. Dexcom is one of the two healthcare companies that made the cut; it develops, manufactures and distributes continuous glucose monitoring systems for people with diabetes. Atlassian is an Australian software company (it trades on the Nasdaq) with 120,000 corporate customers around the globe. It’s best known for Jira, its issue tracking application, and Confluence, a team collaboration and wiki product.
Despite their strong gains this year, not all of the best large-cap growth stocks of 2018 have much momentum right now. Fortinet just dipped slightly below its 200-day moving average, and Veeva Systems is darn close to doing the same. ABIOMED dropped below its 200-day in mid-November and hasn’t been back above it since; Square did the same earlier this month. I’d steer clear of those two until they shape up.
Tableau Software, on the other hand, has plenty of momentum, as the below chart shows:
That looks like a potential leader of the next market rally. Now, if you want to know the names of other promising growth stocks that didn’t make this list, I highly recommend you subscribe to our Cabot Growth Investor advisory, where Mike Cintolo routinely beats the market by not only uncovering the market’s best growth stocks, but protecting you from portfolio-ruining losses by setting strict loss limits.
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Investment analyst and Chief Analyst of Cabot Wealth Daily, Chris Preston brings you all the latest from the investing world. Sign up to get updates and breaking news delivered FREE to your inbox. Get unlimited access to our library of complimentary investing reports.Sign up now!