The 10 Best Stocks During the Obama Administration

By Dan Caplinger Markets Fool.com


Image source: White House.

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The inauguration of President-elect Donald Trump will take place later this week, and President Barack Obama is about to leave office after eight years in the White House. Those of different political persuasions will disagree about the reasons behind what's happened since then, but the fact is that the S&P 500 (SNPINDEX: ^GSPC) has climbed 167% over that time frame, and that doesn't include the upward impact of dividends that stocks have paid since 2009.

As strong as the bull market has been, those returns pale in comparison to what the top-performing stocks have accomplished. Let's look at the stocks currently in the S&P 500 and find the 10 top performers during the Obama administration.

Stock

Total Return

ULTA Salon (NASDAQ: ULTA)

4,350%

Netflix (NASDAQ: NFLX)

3,037%

General Growth Properties

2,737%

Regeneron Pharmaceuticals

2,294%

Priceline Group (NASDAQ: PCLN)

2,241%

Skyworks Solutions

1,888%

United Rentals (NYSE: URI)

1,778%

Amazon.com

1,587%

Expedia

1,574%

XL Group

1,463%

Source: S&P Global Market Intelligence.

Perhaps the most interesting thing about these top 10 stocks is that they don't actually have that much in common with each other. You'll find a wide variety of different industries represented, and some of them appear to have little connection to the financial crisis. There are, though, a few common themes, and those concepts are likely to keep driving performance in the future.

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The mobile revolution keeps moving forward

Several of the companies above have benefited greatly from advances in technology over the past eight years, but they've taken different approaches toward capitalizing on their opportunities. For Priceline and Expedia, gains stemmed largely from the perception in 2009 that the travel world had changed forever. The 2008 recession convinced many people that business travel would shrink dramatically, as cost concerns forced many businesses to consider other options, like teleconferencing, as an alternative to live interaction. Yet that never actually happened, and even with challenges persisting in some parts of the global economy, both Priceline and Expedia have found niches in which to grow and prosper.

The convenience that technology provides has lifted shares of many other tech companies. On this list, Netflix and Amazon share the streaming video arena in common, but more broadly, they've taken advantage of rising demand for consumer convenience by delivering goods and services directly to homes rather than making customers venture out to fulfill their needs. Americans have been quick to adopt those attitudes, but both Amazon and Netflix have growth opportunities internationally to duplicate their U.S. successes and get another spurt of revenue and profit gains in the years to come.

Finding other ways to thrive

Yet some companies have found ways to fight back against the domination of online alternatives. Ulta Salon has counted on the desire of its customers to visit its stores, producing an in-store salon experience that complements its vast array of beauty and other products well. Even as many brick-and-mortar companies have had to close stores, Ulta has gone through a massive expansion, and sees that trend continuing indefinitely.

The best thing about Ulta's business model is that, try as they might, online retailers simply can't duplicate the tactile feeling of having professional stylists and cosmeticians working directly with you in person. That gives Ulta a competitive advantage that will help defend its business from the online retail trend.

Similarly, United Rentals has tapped into the sharing economy by providing construction equipment to those who need it without requiring customers to go to the expense of making a full upfront purchase. Just as companies like Uber and Airbnb seek to offer those who want to be able to go places and stay somewhere without having to buy a vehicle or a home, United Rentals offers the use of what would be prohibitively expensive equipment to buy at attractive rental prices.

Those prices allow United Rentals to make a profit even as they save customers money. That's an idea that never goes out of style, and if the construction market starts to gain traction, then United Rentals could see even more extensive gains in the future.

The stock market has soared during the Obama administration, and these 10 stocks saw particularly impressive gains. For most of them, opportunities still exist that could send their share prices even higher long after the current president has left the White House.

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Dan Caplinger owns shares of Priceline Group. The Motley Fool owns shares of and recommends Amazon.com, Netflix, Priceline Group, Skyworks Solutions, and Ulta Salon, Cosmetics and Fragrance. The Motley Fool has the following options: short January 2017 $75 calls on Skyworks Solutions. The Motley Fool has a disclosure policy.