These 2 FTSE 100 stocks grew more than 3,000% in the last decade! Here’s what I’d do now

Harvey Jones is blown away by the two best performing stocks on the FTSE 100 (INDEXFTSE:UKX).

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Wow. Just wow. The best performing stock on the FTSE 100 over the past decade has grown by an incredible 3,200%, according to new research by wealth platform AJ Bell.

If you are not impressed by that number, try this one instead.

If you had invested £1,000 in this particular stock on January 1 2010, you would have had a whopping £32,000 by 18 December this year (with dividends reinvested), which might have made you feel better as you navigated doing that last minute Christmas shopping.

Sporty stuff

So what is this mighty 30-plus bagger? A round of applause, please, for branded sportswear, fashion and outdoors retail specialist JD Sports Fashion (LSE: JD).

Its performance is nothing short of phenomenal, given that this was such a tough decade for retailers, as shoppers abandoned the high street to spend yet more time in front of their screens, and price growth outpaced wages for most of the decade.

Kicking yourself for missing out? You’re not the only one, my colleague Paul Summers wished he had bought this classy business too.

JD Sports was relatively small beer at the start of the decade. Russ Mould, investment director at AJ Bell, says that isn’t surprising, quoting legendary investor Jim Slater’s mantra that ‘elephants don’t gallop’: “The established giants of the FTSE 100 simply can’t grow fast enough to necessarily generate these sorts of meteoric returns,” Mould said.

JD Sports only joined the FTSE 100 this summer but has continued its winning streak, rising another 38% in the last six months, lifting its market cap to almost £8bn.

Obviously, the big money has now been made. If JD Sports rose another 3,200% in the next 10 years its market cap would hit £264bn, and although it is expanding its template globally with much success, I can’t see that happening.

The JD Sports share price now trades at 23.5 times earnings, comfortably above the FTSE 100 average valuation of just over 18 times, but not massively pricey. There are signs of the inevitable slowdown, as earnings growth of 58% 55% and 32% in the three years to 2018 are set to fall to 17% in 2020 and 13% in 2021.

That is still pretty good going, though. I’d buy and hold it for the next decade.

Ashtead Group

The second-best performing FTSE 100 stock over the same period was equipment rental firm Ashtead Group (LSE: AHT), close behind after growing a mind-boggling 3,110%. A repeat over the next decade would lift its market cap from £11bn to £353bn, so again, it ain’t gonna happen.

Ashtead generates 90% of its revenues through its US subsidiary Sunbelt, so has benefited from the booming economy stateside. That may be a problem as the IMF predicts growth will fall from 2.4% this year to 2.1% in 2020, although US Federal Reserve rate cuts and a US-China trade deal may keep the party going a little while longer.

The firm has increased its dividend every year for the last decade, so although the current yield of 1.8% seems low, you can brace yourself for plenty of progression. Especially since the payout is covered a massive 4.6 times by earnings.

The Ashtead share price looks stupendously cheap at 11.7 times forward earnings, although again, earnings are slowing. After years of growth measured at more than 20% or 30%, we are looking at 13% and 9% over the next two years.

At today’s valuation, it still looks a buy to me. Now roll on 2020.

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.

Harvey Jones has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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.

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