Tesla
stock has doubled this year, and so have 12 other stocks in the
Russell 1000,
including
Meta Platforms
(META),
Nvidia
(NVDA), and
Palantir
(PLTR). Doubling your money isn’t easy, and doubling it in just six months is even more difficult, so investors now have to decide: Is It time to take profits or let it ride?
To answer that question, we looked at how stocks that doubled during the first six months of the year performed during the second half in each of the past five years. And at first glance, the answer seems obvious. Winning stocks have not only kept winning, they have, on average, gained another 32%.
Digging into the numbers, however, suggest the picture isn’t quite that rosy. The media stock, for instance, has gained just 16%, and the numbers are skewed by a spectacular 2020, when seven stocks doubled during the first half of the year and then averaged a gain of 63% over the next six. Strike them out, and the average stock dropped 2.3% over the second half of the year. That would suggest caution—unless 2023 is a repeat of 2020.
| Security Name | Ticker | YTD %Chg |
|---|---|---|
| NVIDIA Corporation | NVDA | 179% |
| AppLovin Corp. Class A | APP | 143% |
| Palantir Technologies Inc. Class A | PLTR | 137% |
| Meta Platforms Inc. Class A | META | 134% |
| DraftKings, Inc. Class A | DKNG | 131% |
| Sotera Health Company | SHC | 128% |
| Carnival Corporation | CCL | 113% |
| Builders FirstSource, Inc. | BLDR | 110% |
| Tesla, Inc. | TSLA | 109% |
| Royal Caribbean Group | RCL | 105% |
| MongoDB, Inc. Class A | MDB | 105% |
| Coinbase Global, Inc. Class A | COIN | 105% |
| Spotify Technology SA | SPOT | 102% |
Source: Dow Jones Market Data
What’s also remarkable is just how many stocks in the Russell 1000 have doubled this year through June 29. There have been 13—Tesla, Nvidia, Meta Platforms, Palantir,
AppLovin
(APP),
DraftKings
(DKNG),
Sotera Health
(SHC),
Carnival
(CCL),
Builders FirstSource
(BLDR),
Royal Caribbean
(RCL),
MongoDB
(MDB),
Coinbase Global
(COIN), and
Spotify Technology
(SPOT)—nearly as many as the 16 from the previous five years combined. That points to just how strong the rally has been so far in 2023.
There’s also a middle ground between buy and sell. Investors who bought these stocks early have the option of selling a piece of their positions, maybe a third or a half. That was if the stock keeps rising, they are at least holding some, and if it drops, well, they took some profits before that happened.
Ultimately, it depends on how good you feel about the stock going forward—and whether it’s more than speculation driving the current gains.
Write to Ben Levisohn at [email protected]
Read the full article here
