The 3 Top-Performing Stocks of 2020

With 2020 almost behind us, it’s a great time to see what did well and what top stocks could continue to thrive well into 2021 and beyond.

stocks rising

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn moresdf

This last year has been a volatile one, and we are still living in a strange world with an even stranger marketplace. So it feels almost necessary this year to look back and see what top stocks did well on the TSX Composite Index. With a market crash behind us, and potentially multiple ahead, it’s a great time to consider where you can reinvest, especially with another $6,000 being added to the Tax-Free Savings Account (TFSA) on January 1, 2021.

So when it comes to companies that outdid themselves on the stock market this year, and over the last few years for that matter, there are three that stick out. Let’s take a look at whether these top stocks belong in your TFSA portfolio.

 

 

Shopify

Let’s first start with the obvious. Shopify Inc. (TSX:SHOP)(NYSE:SHOP) had a banger year this year, but also over the last three years. Since the company came onto the scene, shares have grown an unbelievable 3,785%! But even just looking at the past year, shares of Shopify have grown an incredible 165%.

The market crash had many worried Shopify was doomed for failure, but the pandemic saved this stock. E-commerce became a necessity overnight, making Shopify increase revenue by record-breaking numbers again and again. Most recently, revenue grew by 96% year over year, with subscriptions up 48% year over year as well. That’s recurring revenue coming in from a surge of new merchants.

While there could be another dip in share price with a market crash, see that as an opportunity to pick up this top stock. You may not get the chance again.

Ballard Power

Another stock that’s more of a surprise is Ballard Power Systems Inc. (TSX:BLDP)(NASDAQ:BLDP). The fuel cell provider is up 306% in the last three years — and 193% in the last year alone! While the stock beat Shopify even this year by share growth, there might be a bit more wariness involved in this top stock.

The growth simply isn’t backed by the record revenue we saw with a stock like Shopify. Total revenue only increased by 4% year over year in its third-quarter report. Cash operating costs continue to rise, bringing down adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) by almost $1 million. So it looks like this company could start to fade into the red in the year to come, bringing its share price down with it.

Cronos

A big surprise? Cronos Group Inc. (TSX:CRON)(NASDAQ:CRON) was also a major player during the last few years. The stock is up 114% during the last three years. Sure, that’s only 5% this year, but this could be one stock that surprises investors in the years to come. Especially in the cannabis sector.

Cronos continues to grow within the United States, selling more and more recreation marijuana throughout North America. This drove net revenue up by 96% year over year! With a new White House administration seeking the decriminalization of marijuana in the near future, this could mean that Cronos continues to be a winning top stock in 2021 and beyond.

Bottom line

When looking at these top stocks, it’s definitely best to see which, if any, fit into your portfolio. Each comes with its own risk. However, if you take the Motley Fool advice of buying and holding these stocks for the long term, it leaves little change that you see a loss decades down the road.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Amy Legate-Wolfe owns shares of Shopify. Tom Gardner owns shares of Shopify. The Motley Fool owns shares of and recommends Shopify and Shopify.

More on Stocks for Beginners

A red umbrella stands higher than a crowd of black umbrellas.
Stocks for Beginners

Top Recession-Resilient TSX Stocks to Buy With $3,000

It's time to increase your exposure to defensives!

Read more »

An airplane on a runway
Stocks for Beginners

Will Bombardier’s Stock Price Keep Soaring in 2023?

Here are the top reasons why recent gains in Bombardier’s share prices could just be the start of a spectacular…

Read more »

Automated vehicles
Stocks for Beginners

Magna Stock: How High Could It Go in 2023?

Magna International could grow in 2023 as the electric vehicle market recovers. Could MG stock hit new highs?

Read more »

Man data analyze
Stocks for Beginners

3 Top Stocks to Buy Now in a Once-in-a-Decade Opportunity

The next decade could be absolutely insane for these three top stocks that offer growth in both the near and…

Read more »

Profit dial turned up to maximum
Stocks for Beginners

How TFSA and RRSP Investors Can Turn $20,000 Into $320,000 in 30 Years

Investing in the stock market and holding patiently over the long term is the key to success.

Read more »

tsx today
Stocks for Beginners

TSX Today: What to Watch for in Stocks on Tuesday, February 21

A minor recovery in oil and base metals prices could lift commodity-linked TSX stocks at the open today.

Read more »

Young adult woman walking up the stairs with sun sport background
Stocks for Beginners

New to Stocks? 5 Easy Tricks to Give You a Leg Up

New stock investors from all walks of life can improve their returns from applying some, if not all, of these…

Read more »

IMAGE OF A NOTEBOOK WITH TFSA WRITTEN ON IT
Stocks for Beginners

2 Top TSX Stocks for TFSA Investors to Buy Now

If you have a long investment horizon, don't waste your TFSA on high-interest savings plans. Generate long-term wealth with these…

Read more »