3 Stocks Growing Faster Than Apple
Apple stock has been on an incredible run over the last year. Shares have increased roughly 67% in a 12-month span, with total returns coming in at a fantastic 70%. Meanwhile, the S&P 500 has gained roughly 12% over the period.
Apple stock currently trades near all-time highs, and the company has set a new record for highest market cap in history. But as great as the iPhone maker's performance has been, it isn't the only stock that's been crushing the market. We asked three Fool contributors to spotlight a company that has delivered even greater returns than Apple within the last year. Read on to learn about these massive market beaters.
(Skyworks Solutions): Apple has been a huge performer over the past year, but the company has grown so large that it's hard for even its massive results quarter after quarter to move the needle as much as smaller companies can experience. One great example of that phenomenon comes from Apple supplier Skyworks Solutions , which has ridden the coattails of various tech giants to its own great success.
It's true that Skyworks owes some of its success to Apple. But the nearly 150% returns that the stock has posted in the past year aren't due entirely to the Cupertino-based tech giant. Indeed, one of the areas that Skyworks believes could help it grow the fastest involves the rising popularity of wireless communication generally. For high-end operations, Skyworks hopes to help support high-bandwidth uses like streaming video and music through its customized signal-filtering and tuning solutions. Meanwhile, other uses like navigation and power-management offer different but equally promising chances for Skyworks to broaden its business reach. With the rise of the Internet of Things, mobile payments, and on-demand entertainment, Skyworks doesn't have to labor entirely in Apple's shadow, and with plenty of runway left ahead, Skyworks could easily keep outpacing Apple's returns in 2015 and beyond.
Joe Tenebruso (Electronic Arts): Few large-cap companies have outperformed Apple over the last year. Yet surprisingly, what was once deemed "The Worst Company in America" has done just that.
After struggling for years with stagnating game franchises and a poor reputation among gamers, Electronic Arts appears to have righted the ship. The long-beleaguered video game maker turned in an impressive 2014 and has risen more than 90% in the last 12 months, compared to Apple's nearly 70% returns.
Fueled by the launch of new game consoles like the Xbox One and PlayStation 4, EA's trailing-12-month revenue surged 22% over the prior-year period. And thanks in part to a major shift toward higher-margin digital revenue -- which now comprises more than half of EA's total revenue-- adjusted earnings rose an even more impressive 51% during that time.
New CEO Andrew Wilson is taking steps to restore Electronics Arts' image among gamers by delivering high-quality new games such as the critically acclaimed Dragon Age: Inquisition, as well as popular new services such as EA Access, where gamers can subscribe to digital access to EA's older titles. These initiatives, along with consistently strong operational performance throughout 2014, have even led my Foolish colleague Sam Mattera to name Wilson the best tech CEO of 2014.
Looking ahead, I expect more solid performance from Electronic Arts. The company has another potential blockbuster due out later this year in Star Wars: Battlefront, and the momentum the company has built should continue as the new game consoles remain early in their growth cycles. As such, Fools may wish to consider adding this successful turnaround story to their watch list.
(Ambarella): Growing demand for wearables and security cameras has propelled chipmaker Ambarella to incredible gains over the last year. The company is a small-cap stock with a market cap of around $2 billion, and its stock is prone to big swings, but shares have gained roughly 85% over the last 12 months and it looks like the company is poised to continue delivering wins for investors. Ambarella supplies image and video processing chips for devices such as GoPro cameras, and recently delivered great results for its fourth quarter and fiscal year. Sales for the annual term were up 38.5% over the prior year, and earnings per diluted share grew nearly 85%.
With a forward price-to-earnings ratio of roughly 40, Ambarella is priced for sustained growth and well above Apple's forward P/E of roughly 15, but the semiconductor company appears to be in shape to deliver. It anticipates that annual revenue will increase between 27% and 30% this year, along with improved operating margins, and there are reasons to believe the chipmaker's growth story is just getting started. Business is picking up in China and South Korea, and Ambarella is diversifying its customer base with wins in Xiaomi's upcoming low-cost action camera and the emerging drone market.
Security and automotive cameras also look poised for growth, and Ambarella's expertise in low-power, high-performance video chips will enable it to benefit from the rise of the Internet of Things. The stock could be a great pick for investors who are looking to capitalize on momentum in cameras but find individual camera makers like GoPro too risky.
The article 3 Stocks Growing Faster Than Apple originally appeared on Fool.com.
Dan Caplinger owns shares of Apple. Joe Tenebruso has no position in any stocks mentioned. Keith Noonan has no position in any stocks mentioned. The Motley Fool recommends Ambarella and Apple. The Motley Fool owns shares of Ambarella, Apple, and Skyworks Solutions. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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