The 2010s are coming to a close, and what a decade it’s been for the TSX. Between the rise of cannabis stocks and the decline of big oil, there have been plenty of developments to keep up with. Some stocks have been winners, others have been losers, and for the most part, the TSX has chugged along with positive but not incredible returns.
The following are three stocks that have bucked the general trend of the TSX over the past decade, delivering superior returns year in and year out.
Air Canada
Air Canada (TSX:AC)(TSX:AC.B) was a surprise riser throughout the 2010s, after facing serious problems in the prior decade.
In 2003, the airline filed for bankruptcy, after following a scorched-earth policy to ward off a buyout.
Later, the company faced serious trouble owing to a $2.85 billion pension shortfall.
Finally, Air Canada saw declining sales during the Great Recession, thanks to a decline in air travel that occurred around that time.
As a result of all these negative developments, Air Canada had a brutal time in the 2000s. However, in the 2010s, the company started turning things around after receiving financing packages from a number of big investors. Since 2012, the company has seen growing profits, which have sent its stock higher. Since the end of 2009, the stock is up 3,665%.
Shopify
Shopify (TSX:SHOP)(NYSE:SHOP) might seem like a strange stock to include on this list. After all, it went public in 2015 and has therefore only been around for about half of the 2010s.
Nevertheless, its stock has delivered a return that’s been phenomenal, even if spread out over an entire decade.
Since the closing price on the day it went public, SHOP is up 1,368%. Driven by sky-high revenue growth, celebrity partnerships, and the perception that it could be “the next Amazon,” the stock has been on an absolute tear. This year was the first major challenge on Shopify’s seemingly unstoppable march upward, with a major selloff in the fall. Since then, the stock has gotten back on course, trading at $513 as of this writing.
Constellation Software
Constellation Software (TSX:CSU) is another high-flying tech stock that has beaten the pants off the market in the 2010s.
Starting off the decade at just $37, it has since risen to $1,331 — a 3,497% return.
What’s been the secret of Constellation’s success?
Two words: growing profits.
Whereas many tech stocks are subsidized by investors while they pray for future profits, Constellation has been steadily pumping out positive earnings.
It all comes down to the company’s business model. Constellation doesn’t build anything itself in-house; instead, it looks for medium-sized software companies to acquire. It only acquires companies with proven track records of solid results, so it doesn’t get weighed down with underperforming assets.
Constellation has a strong focus on enterprise software, a segment of the tech industry that’s known for producing steady, reliable earnings. This focus has paid off handsomely for CSU, making it one of the TSX’s biggest risers over the past decade.
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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Fool contributor Andrew Button has no position in any of the stocks mentioned. David Gardner owns shares of Amazon. Tom Gardner owns shares of Shopify. The Motley Fool owns shares of and recommends Amazon, Constellation Software, Shopify, and Shopify.
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