Three FTSE 100 shares have doubled investors’ money over the last five years, but are they still the best shares to buy for my portfolio today?
No other companies on the index have grown more than 100% in that time, with all dividends on top. Past performance can be misleading though, and success is hard to replicate. Should I still consider buying them today?
I need to tread carefully
As my table shows, US-focused equipment rental specialist Ashtead Group (LSE: AHT) is the best FTSE 100 performer over the last half-decade, growing 130.32%. It’s best over 20 years too, with an astonishing total return of 41,408%. It would have turned a £5k lump sum in 2003 into £2.28m today, with all dividends reinvested.
| Stock | One week | Three months | Six months | One year | Three years | Five years |
| Ashtead Group | -6.31% | 7.82% | -5.01% | 16.46% | 95.18% | 130.32% |
| Frasers Group | -3.24% | 2.13% | 2.92% | -10.31% | 180.06% | 104.02% |
| 3i Group | -3.07% | -2.19% | 14.01% | 48.79% | 103.42% | 102.54% |
Ashtead generates more than 80% of its revenues from US subsidiary Sunbelt Rentals, and is doing nicely out of President Biden’s $1trn US infrastructure bill.
Its share price fell 6.31% last week though, amid fears of further US Federal Reserve tightening. This could offer me a rare entry point. Despite Ashtead’s long-running success, it’s not actually that expensive trading at 17.5 times earnings. I’m keeping a close eye on its share price and if it falls further, I’ll take my chance.
Some find Mike Ashley difficult to understand but the incredible performance of his retail vehicle Frasers Group (LSE: FRAS) deserves respect.
Ashley will never be loved by all and his strategy of buying up struggling rivals has sometimes seemed to verge on the barmy. But he didn’t become a billionaire by being popular or being conventional. His success is particularly impressive given the damage the cost-of-living crisis has inflicted on the bricks and mortar retail sector.
Retail worries me
I’m a little wary of Ashley’s approach and retail worries me. Yet Frasers is still cheap at 11.17 times earnings and it’s on my watchlist.
I recently bought private equity and infrastructure specialist 3i Group (LSE: III), third best FTSE 100 performer over five years. This investment trust targets both quoted and unquoted companies with the aim of realising its stake at a profit, and has done brilliantly.
Revenues and profits tend to vary in line with disposals, and can bounce around from year to year. In 2021, earnings per share grew an incredible 771%. In 2023, they crept up 14%. That’s par for the course. Yet its longer-term performance chart is one of the most impressive I’ve seen.
The share price has climbed from a low of 112.96p after the financial crisis to 1,895p today, up an incredible 1,578%. There have been selloffs in that time, notably in the pandemic, but the trajectory has been up and up.
One worry is that 3i is now heavily exposed to just one stock, Dutch discount retailer Action. Another is that today’s economic conditions are tough for smaller companies and finance costs have risen sharply. It’s also pricey trading at a 9.15% premium to underlying net asset value.
Of the three, Ashtead looks like the best buy of the three. But I’d still rather purchase it on a dip.
