I went out on a limb last year, singling out three stocks that had more than doubled in 2016. I suggested that NVIDIA (NASDAQ: NVDA), SodaStream (NASDAQ: SODA), and Weibo (NASDAQ: WB) -- stocks that soared 224%, 142%, and 108%, respectively, last year -- had catalysts in play to carry over into 2017.
I didn't exactly nail the prediction. Just one of the three stocks would go on to double again. However, all three have gone on to smoke the market. With one trading day left in 2017, NVIDIA, SodaStream, and Weibo have risen 86%, 78%, and 157%, respectively. It's not too shabby when the worst performer has soared 78%, and the average gain of the three stocks -- 107% -- does mean that a basket of all three stocks at equal weightings would have doubled in 2017. Let's check out the reasons for their success in back-to-back years.
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NVIDIA was the S&P 500's biggest gainer in 2016, skyrocketing as the graphics chips specialist found a leading role in everything from virtual reality to artificial intelligence. One of the reasons for its success in 2016 was its knack for smoking the cover off the ball with every financial report, and the trend continues. NVIDIA has beaten Wall Street's profit targets by 19% or better every quarter over the past year.
Gaming still accounts for the lion's share of NVIDIA's revenue, but growth continues to impress. Revenue rose 32% in its latest quarter with net income growing at nearly twice that rate. As long as NVIDIA keeps lowballing its guidance, the good times should continue for NVIDIA.
There's rarely a second act for a faddish product, but SodaStream has been a choice exception. The company that was roaring five years ago with its namesake maker of carbonated soft drinks is now riding the sparkling water craze.
SodaStream's latest guidance calls for revenue to climb 13%, the Israeli company's second year in a row of double-digit top-line growth. The bottom line is growing even faster -- just like NVIDIA -- with SodaStream forecasting 30% in earnings-per-share growth for all of 2017.
There's still value in the stock. SodaStream is trading at 21 times forward earnings, a reasonable multiple for a stock that has more than doubled in 2016 and nearly doubled in 2017.
China's fast-growing social media darling has now more than doubled in back-to-back years. Revenue growth is accelerating in 2017, and it also helps that investors have been flocking to Chinese internet stocks this year.
Wall Street pros keep juicing up their optimism when it comes to Weibo. Last month, it was Gregory Zhao at Barclays boosting his price target from $100 to $120. Zhao is encouraged by Weibo's healthy growth in monthly and daily active users and the upside of gaining market share in newsfeed advertising. Doubling for three years in a row would be a huge feat, but momentum is clearly in its corner.
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Rick Munarriz has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Nvidia. The Motley Fool owns shares of SodaStream. The Motley Fool recommends Weibo. The Motley Fool has a disclosure policy.