By: Bob Haegele
February 5, 2021The Motley Fool recommends two stocks picks each month through its Stock Advisor program. Therefore, we’d like to assess the performance of Motley Fool stock picks from last quarter. After all, they show excellent returns on their website, but do their recommendations really reflect that?
Spoiler alert: yes, Motley Fool’s recommendations from last quarter have fared quite well. In fact, it appears to be business as usual as Fool’s picks continue to crush the larger S&P 500’s returns. Only one of their picks from Q4 has a negative return so far, but it was the last pick of the quarter, recommended in mid-December. Thus, it’s far too soon to assume that pick is a dud.
- Average return, Motley Fool stock picks: 36.4%
- S&P 500 return (10/2020-1/2021): 10.225%
Overall, Motley Fool’s recommendations are beating the market easily with stocks from Pinterest (PINS) and Lemonade, Inc. (LMND) being the big winners so far. Let’s take a look at each stock pick in more detail.
Pinterest (NASDAQ: PINS)
Rec. date: 10/01/2020
Return since recommendation: +73.2% | YTD: +24.4%
Is Pinterest a social media platform? Is it just a visual search engine? I’m not sure anyone really know for sure, but one thing is certain: its stock is soaring.
Tom Gardner recommended this stock at the beginning of October, 2020, having first recommended it in July of the same year. (The brothers often recommend stocks multiple times.) This time around, Tom cited the company’s $25 market cap, “unique” platform, rapid growth, and excellent management.
Autodesk (NASDAQ: ADSK)
Rec. date: 10/15/2020
Return since recommendation: +16.2% | YTD: +0.17%
Tom recommended Autodesk on 10/15/2020, noting the company has had some growing pains that could cause some investors to overlook it. But, as they say, one man’s trash is another man’s treasure, and he thinks there is opportunity to be had.
Autodesk is a type of computer-aided design (CAD) software, and thousands of projects around the world benefit from it. Digital design is vastly superior to paper-and-pencil, meaning things should only get better for Autodesk. According to Gardner, the company’s addressable market is $69 billion, but its revenue is just $3.5 billion today. That leaves a ton of room for growth.
Fiverr International (NASDAQ: FVRR)
Rec. date: 11/05/2020
Return since recommendation: +38.2% | YTD: +40.6%
Fiverr has been around since 2010, but recent trends due to COVID-19 that may become permanent have changed the game. Namely, those trends are freelancing and working from home. Indeed, what was once less desirable and even stigmatized work is now becoming the norm for many.
Both businesses and workers alike are now seeing the benefits of remote work. Although bills such as AB-5 just before the pandemic challenged the idea of the independent contractor, it seems the tide has shifted once again.
Thus, Fiverr is growing rapidly, has an addressable market of $100 billion, and has great leadership. A great opportunity for sure.
Zebra Technologies (NASDAQ: ZBRA)
Rec. date: 11/19/2020
Return since recommendation: +12.6% | YTD: +5.93%
Zebra Technologies is another stock that has been recommended before but deserved another mention. As David Gardner noted in his Motley Fool stock recommendation, companies that dominate their respective markets will almost always have a stock price that comes with market dominance. Such is the case for Zebra, which has a 40% market share in barcode printing. It also dabbles in other technologies, such as RFID.
As David notes, this might be a bit of a boring business, but its financials are anything but, and that’s what matters. It acquired Motorola’s enterprise business for $3.45 billion in 2014 and has greatly improved that business. As such, it has greatly expanded its mobile capabilities. All told, its addressable market is about $25 billion.
Lemonade, Inc. (NASDAQ: LMND)
Rec. date: 12/03/2020
Return since recommendation:+86.7% | YTD: +18.2%
Lemonade, Inc. is a newer company that offers insurance policies to renters and homeowners. It also offers health insurance policies for pets. Tom Gardner first recommended it at the beginning of December, 2020.
According to Tom, the company perfectly meets his requirements, which is that it has (1) delighted customers, (2) a passionate CEO who is deep in product, (3) excellent underlying financials, (4) a very large market opportunity and (5) a dynamic culture where employees love their work.
Clearly, Lemonade is firing on all cylinders as this Motley Fool stock recommendation has had astounding 86% growth in just over two months. From a business perspective, what Lemonade does differently is that it greatly simplifies the experience of applying for insurance. As a result, it only takes a few minutes. It’s not just the stock that has seen a huge rise; the company is growing rapidly, too.
The Bottom Line
As you can see, The Motley Fool’s most recent stock recommendations have done quite well. And these stock picks are no fluke; its picks have averaged more than a 500% return since Stock Advisor started in 2002. The Motley Fool is undoubtedly one of the best stock advice websites.
That being said, what we’re showing you here are last quarter’s stock recommendations. The best way to get the latest picks is by becoming a Stock Advisor member. You get significant savings on your first year with our link, so the cost is just $99. We would highly recommend taking advantage if you want the most timely Motley Fool stock recommendations.
To learn more about Stock Advisor, see our full Motley Fool review.
