Total return: 57,282%........ (from Kiplingers.com)
The Nineties have been one of the best decades of the century for
stocks, and nobody did better than Dell Computer's stockholders. Had
you been among the fortunate who owned Dell shares when the
decade began (and you steadfastly held on to them), you'd be sitting
on a return of 57,282%--that's right, 57,282%--the result of
compounding when a stock more than doubles year after year after
year . . .
You know Kiplinger's First Law of Investing--that past results are no
predictor of future performance. But there's also Newton's First Law of
Motion--that an object will keep moving on the same path until
deflected by an outside force. So with the assistance of fund manager
James O'Shaughnessy, we unearthed the highest-returning stocks of
the 1990s and then asked analysts who follow the stocks' fortunes
what they think about their prospects for the next three to five years.
For the moment, these companies' futures look reasonably bright. On
average, analysts expect each of them to rack up earnings gains of at
least 22% a year over the next five years. A word of caution, though:
With the run-up that these stocks have had, expect inordinately high
price-earnings ratios in some cases. Earnings estimates are courtesy
of Zack's Investment Research.
Dell Computer
Total return: 57,282%
Now master of the mail-order-computer universe, Dell is the "poster
child of the '90s bull market," says O'Shaughnessy, who manages
O'Shaughnessy Cornerstone Growth fund. Had you invested in Dell at
the start of 1990, you'd have reaped an annualized return of
107%-doubling your stake, and then some, every year. Dell is
poised for further glory if notebook- and desk-top-PC sales continue
to increase. A consensus of analysts predits 30% annual earnings
growth over the next five years.
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