3 Surprising Stocks That Significantly Outperformed The S&P 500 In 2020

Wall Street’s major averages are trading near their all-time highs as we approach the end of the year, with the benchmark index hovering below the 3,700 mark.

SPX Monthly 2000-2020

Recently, investors have been especially encouraged by positive developments on the COVID-19 vaccine front as well as by growing hopes for a new fiscal stimulus package from US lawmakers.

While most of the focus of this year’s rally has been on the popular mega cap tech stocks, such as Apple (NASDAQ:), Amazon (NASDAQ:), and Microsoft (NASDAQ:), stay-at-home winners, like Zoom Video Communications (NASDAQ:), Netflix (NASDAQ:), and DocuSign (NASDAQ:) have also been in the spotlight. More recently, beaten-down value names, like JP Morgan Chase (NYSE:), General Electric (NYSE:), and Walt Disney (NYSE:) have garnered investor interest as hopes for an economic recovery escalate.

There have been other, perhaps less-followed winners as well. Below, we highlight three which vastly outperformed the S&P 500 in 2020.

1. Etsy

  • Opening Price, Jan. 2, 2020: $45.19
  • Closing Price, Dec. 15, 2020: $177.80
  • 2020 Gains YTD: +301.3%

Within the booming internet retail space, Etsy (NASDAQ:) has been a standout performer this year, benefiting from increased sales as people around the world flocked to its online marketplace platform during the COVID-19 pandemic.

Year-to-date, shares of the Brooklyn, New York-based e-commerce company have more than tripled, soaring 301% to easily outpace the S&P 500’s roughly 14% gain over the same timeframe.

ETSY stock, which has outperformed other notable names in the sector since the start of the year, such as Amazon, and eBay (NASDAQ:), ended at a new record high of $177.80 on Tuesday. At current levels, the fast-growing tech company has a market cap of $22.4 billion.

ETSY Daily TTM

In a sign of how well Etsy’s business has performed amid the ongoing COVID-19 pandemic, the company has turned in that have beaten revenue forecasts in each quarter this year. Through the first nine months of 2020, Etsy’s revenue grew 102% year-over-year, while total gross merchandise sales (GMS)—a key metric used in the e-commerce sector to measure transaction values—jumped 101%.

Additionally, Etsy’s number of active buyers as of the end of the third quarter increased 55% year-over-year to 69.6 million. It also saw a surge in the number of merchants on its platform, with active sellers rising 42% from a year earlier to 3.68 million.

With the peak holiday-shopping season at hand, Etsy should continue to enjoy a boost to its already-stellar financial performance heading into the new year.

2. PayPal

  • Opening Price, Jan. 2, 2020: $110.75
  • Closing Price, Dec. 15, 2020: $220.79
  • 2020 Gains YTD: +104.8%

PayPal Holdings (NASDAQ:) has been one of this year’s biggest winners, with the digital payment processing company benefiting from the accelerated shift to online shopping and e-commerce amid the coronavirus health crisis.

Investors have also been encouraged by strong growth numbers for its popular, person-to-person mobile payment app, Venmo, as well as its recent announcement to allow customers to buy, sell and hold cryptocurrencies, including and .

Shares of the digital payment leader have outperformed the S&P 500 by a wide margin in 2020, soaring almost 105% with just a couple of weeks remaining in the year. PYPL stock, which reached an all-time high of $223.16 on Monday, ended at $221.60 yesterday, earning the San Jose, California-based fintech firm a valuation of $260.1 billion.

 

PYPL Daily TTM

At the start of November, PayPal reported blockbuster , with the digital-payments giant enjoying its highest rate of growth since it was spun off from eBay in 2015.

Earnings soared 121% from the year-ago period to $1.07 per share, while revenue jumped 25% year-over-year to $5.46 billion. Meanwhile, total payments volume (TPV)—a closely watched metric for the company—jumped 36% from a year earlier to a record $247 billion.

PayPal added a record high 15.2 million new accounts in the three months ended Sept. 30, up 55% year-over-year. Overall, the e-commerce company now has about 361 million active accounts on its payment network.

Its Venmo payment app continued its torrid pace of growth amid the pandemic, with the amount of people using the service rising to 65 million users as of the most recent quarter.

We expect PayPal’s stock to extend its run higher in the new year as the current operating environment has created a perfect backdrop for digital payment providers to thrive.

TeraDyne

  • Opening Price, Jan. 2, 2020: $69.68
  • Closing Price, Dec. 15, 2020: $120.44
  • 2020 Gains YTD: +76.6%

Teradyne (NASDAQ:), which develops and supplies automatic testing tools used by manufacturers of semiconductors, circuit boards, and wireless networking modules, has been one of the top performers in the semiconductor equipment industry this year, with shares surging 76.6% in 2020.

While that in itself is impressive, what makes its year-to-date gains even more remarkable is that the stock soared 117.3% in 2019 as well.

Shares of TER have outperformed larger rivals such as Applied Materials (NASDAQ:), and ASML Holdings (NASDAQ:) this year. The stock settled at a fresh all-time high of $120.44 last night, giving the North Reading, Massachusetts-based semiconductor test equipment maker a market cap of $20 billion.

TER Daily TTM

TeraDyne reported positive earnings surprises for all of the year, crushing Wall Street’s expectations for profit and revenue due to robust demand for its automatic test equipment (ATE) products from makers of memory chips, wireless networking modules, and 5G wireless systems.

Earnings climbed roughly 53% from the year-ago period in its latest quarter, while sales rose around 41%, both topping expectations.

The company counts IBM (NYSE:), Intel (NASDAQ:), Qualcomm (NASDAQ:), Analog Devices (NASDAQ:), Texas Instruments (NASDAQ:), and Samsung (OTC:) among its high-profile customers.

Looking at the full-year, TeraDyne expects earnings of $4.50 per share and revenue of $3.0 billion in fiscal 2020. That would indicate year-over-year growth rates of 57% and 33%, respectively, reflecting strength in the company’s test businesses, including Memory and Storage test shipments, and System on a Chip (SOC) test shipments.

Despite the lofty gains recorded over the past 24 months, TER stock still looks attractive going forward, considering the strong demand for its ATE products and services.

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