Every investor has been that person at least once: standing around the office water cooler or coffeepot, bragging about the stock you tripled your investment on. Whether you own something unique, or bought a stock before it was a household name, or just have an entertaining story, you can relate to the three of our analysts gathered here around our virtual water cooler, sharing the stocks they like to brag about: Exelixis (NASDAQ: EXEL), Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL), and Ford Motor Company (NYSE: F).
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Sean Williams (Exelixis): Not to be a braggart or anything, but a stock I enjoy crowing about owning is cancer-drug developer Exelixis, which has more than quintupled while in my portfolio.
Things looked incredibly bleak for Exelixis in 2014 when Cabometyx (as the brand-name drug is now known) failed to meet its primary endpoint in the highly touted COMET-1 study in advanced prostate cancer. Exelixis was trading for less than $2 a share shortly thereafter, and its ability to fund its ongoing operations was called into question.
Nonetheless, I motored on and held my stake. Why? Cabometyx was being studied in two additional trials, METEOR for second-line advanced renal-cell carcinoma (RCC), and CELESTIAL for advanced hepatocellular carcinoma. The METEOR study's primary endpoint was progression-free survival (PFS), and while Cabometyx had failed to come close to achieving statistical significance in improving overall survival in COMET-1, it had a knack for hitting statistically significant PFS improvements. Last year, the METEOR "landed" and hit its primary endpoint. In fact, Cabometyx hit the "trifecta" by providing statistically significant improvements to PFS, median overall survival, and objective response rate.
Since the release of this data and the approval of Cabometyx in second-line RCC, the phase 2 CABOSUN study yielded statistically significant results that could allow a label expansion to first-line RCC. It may even unseat incumbent first-line advanced RCC therapy Sutent.
And Exelixis may not be done yet. There are multiple ongoing combination studies, often with cancer immunotherapies, that could yield additional market share in RCC, and there's the potential for expansion to advanced liver cancer if the CELESTIAL study finds the mark. During an initial interim analysis, the independent data-monitoring committee suggested the CELESTIAL study continue as planned, which is good news.
If Exelixis remains on track, it could be generating north of $1.40 in full-year EPS (according to Wall Street's consensus) by 2020, meaning it could still be considered "cheap" at its current price.
I own a piece of SpaceX. Do you?
Rich Smith (Alphabet): If you own shares of Alphabet stock, as I do, then congratulations -- you have a lot to brag about. Each share of Alphabet stock you own represents a piece of a company that's the dominant force in internet search, in advertising, and a rising force in PC and mobile operating systems as well.
This is the same company that has cable monopolies on the run, as its YouTube streaming service morphs into a "television" alternative, while its Google Fiber service forces one cable provider after another to begin offering hyper-fast internet service at affordable rates. And Alphabet also just got done reporting a quarter in which revenue grew 22%, while profits grew even faster -- up 28% year over year in Q1.
All of these things are great reasons to be proud of owning Alphabet stock. None of these things, however, is the reason I brag about owning Alphabet. Fact is, when I do brag, it's about the fact that through Alphabet, I own a piece of SpaceX.
You see, when Alphabet subsidiary Google joined with Fidelity to invest $1 billion in Elon Musk's space start-up SpaceX back in 2015, Alphabet acquired a 7.5% interest in SpaceX. Given that SpaceX was then, is now, and probably will remain for the foreseeable future, a privately held company (as is, incidentally, Fidelity), Alphabet's investment in SpaceX currently represents the only way for an individual investor to own a piece of SpaceX.
I own a piece of that. And yes, I brag about it. Wouldn't you?
No bailouts here
Daniel Miller (Ford Motor Company): To be fair, a stock I used to brag about has hit some rough times recently: Ford Motor Company. If you turn back the clock to the dark days of the past recession, you would be hard pressed to find a better story, business comeback, or stock to root for.
As many of you remember, Ford had stumbled into rough times before newly appointed CEO Alan Mulally practically worked a miracle. But thanks to a well-timed loan to provide financial security amid the company's turnaround efforts, it was able to navigate the deep recession without taking a taxpayer-fueled bailout, unlike its Detroit competitors. It returned to profitability in 2009, far ahead of its Detroit counterparts, and was healthy enough to reinstate its dividend roughly two years ahead of crosstown rival General Motors.
The company made bold moves for long-term investors, including sticking it out in Europe and doubling down in China for future growth. It gambled to improve fuel economy on its most profitable and best-selling product, the F-Series, by replacing steel body panels with aluminum. In all, Ford's story between 2008 and 2014 will be something powerful enough to be written in business books over the coming decades, and it was a stock I bragged about owning while nearly everybody else ran.
It appears the Blue Oval took a step backward after Mulally's departure in 2014, but the automaker has recently decided to shake things up and replace CEO Mark Fields with newly appointed CEO Jim Hackett from its smart-mobility subsidiary. But the automotive industry is poised to evolve greatly over the next two decades, thanks to a push toward driverless and electrified vehicles, and if Hackett is the second coming of Mulally, maybe shareholders can soon again be proud to own shares of the company that didn't close its doors during the Great Recession.
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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Daniel Miller owns shares of Ford and General Motors. Rich Smith owns shares of Alphabet (C shares). Sean Williams owns shares of Exelixis. The Motley Fool owns shares of and recommends Alphabet (A and C shares), Exelixis, and Ford. The Motley Fool has a disclosure policy.