A £1,000 investment in shares of these UK companies would have beaten Amazon and even Netflix

The UK markets have produced some runaway success stories that can rival the gains made by US tech stocks, but they were hard to find.

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

It is no secret that the US stock market has had some spectacular success stories. From 2009 to 2019, shares in Netflix returned 4,031% according to data from IG.com. A £1,000 investment in the streaming giant made in 2009 would be worth around £41,308 now. A a £1,000 investment in Amazon would have rewarded investors with £18,321.

It is possible to hold foreign stocks in an ISA or SIPP. However, many offer a restricted range of securities and charge higher fees for holding them. There are currency conversion charges when getting in and out of a position, and fluctuating exchange rates will change the sterling value of a foreign stock. If the foreign government taxes your dividends, they need to be reclaimed (if possible) and will also fluctuate as the pound weakens and strengthens.

For these reasons, many UK investors buy funds, ETFs, or investment trusts to gain exposure to baskets of international stocks without the fuss. Does that mean that millionaire-making US tech stock (they usually are tech stocks) style returns are only possible for US investors or sophisticated UK ones?

No, it does not. Using data from AJ Bell, I have identified three UK stocks that have delivered a 10-year return of over 3,000%.

Movers and shakers

The first is Judges Scientific, a company that manufactures scientific instruments under multiple brands. A £1,000 investment in Judges made 10 years ago would be worth around £45,476 now, returning 46.48% on average each year, or 4,548% in total.

Dart Group, a leisure and tourism company that owns Jet2, delivered a 3,734% return on its share price over 10 years. A £1,000 investment would have grown by 43.62% on average for each of the last 10 years to wind up being worth £37,338 now.

And finally, a 3,734% 10-year return was possible with shares in GB Group. A £1,000 investment in this electronic identity proofing and verification services company would have grown by 43.59% on average each year to end up being worth £37,260.

Aiming high

All three companies trade on the FTSE AIM 100, not the London Stock Exchange’s primary market. Dart has a market capitalisation of around £2.7bn, which is the largest of the three, and Judge is the smallest at £314m.

Assuming market capitalisation grew in tandem with the share price, then Judge would have been valued at about £7m 10 years ago, and Dart Group £71m. All three were very small, risky, and not well-known companies 10 years ago. Very few investors would have made the gamble, which is what it would have been.

But at some point in the story of our three AIM companies, they were up 1,000%, then 2,000%. Unfortunately, many investors will look at a stock that has made a substantial gain and think its probably gone too far, and decide not to invest.

Catching the next one

There are fairytale stocks in the UK markets, but they may start life as small, unknown companies that are challenging to find. They will probably only gain widespread attention when their stocks have gone up a lot.

Instead of assuming the ride is over, I suggest taking a good look at these companies. Can their businesses continue to scale up? Are revenues still growing? Are they still investing in the business? If there is good reason to be confident that they will keep growing, you might just catch the next 1,000% to 2,000% – but don’t bet your house on it.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

James J. McCombie has no position in any of the shares mentioned. The Motley Fool UK has recommended Judges Scientific. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Investing Articles

£20,000 in savings? Here’s how I’d aim to turn that into passive income of £903 a month

Our writer shares one approach to passive income investing, spotlighting a quality FTSE 100 stock he recently added to his…

Read more »

Investing Articles

Great dividend stocks! Here’s the forecast for Associated British Food shares to 2027

Associated British Foods' shares have dropped in value this year. Does this present a dip-buying opportunity for dividend investors to…

Read more »

Investing Articles

Should I sell my FTSE All-Share index fund and buy a S&P 500 tracker instead?

Harvey Jones is wondering whether now is a good time to invest more money in the S&P 500, after a…

Read more »

Investing Articles

Should I buy dirt-cheap BT shares after the recent pullback?

BT shares were on the up but now they're sliding again after the board trimmed full-year guidance. Now Harvey Jones…

Read more »

Investing Articles

Up 28%, can the easyJet share price keep rising?

The easyJet share price has gained altitude over one year but plunged over five. Is now an attractive time for…

Read more »

British Isles on nautical map
Investing Articles

Should I buy more BAE Systems shares at 1,350p?

BAE Systems shares have had a fantastic run since early 2022, yet still don't appear overvalued. Is it now time…

Read more »

Young woman working at modern office. Technical price graph and indicator, red and green candlestick chart and stock trading computer screen background.
Investing Articles

7% yield and a cheap valuation! Is this one of the best shares to buy this month?

Christopher Ruane has been looking for cheap shares to buy. This one has a 7% dividend yield, so is it…

Read more »

Man writing 'now' having crossed out 'later', 'tomorrow' and 'next week'
Investing Articles

Should I buy National Grid shares for the big dividend before it’s too late?

This year's price weakness has left National Grid shares on what looks like a tempting valuation. I hope it doesn't…

Read more »