23 December 2021

Market Analysis

The best and worst performing stocks of 2021

It’s been a historic year for the stock market. Few times has the market exhibited such exuberance and growth opportunities for retail traders and investors. And few times has the gap between the best performers and the worst has ever been so great. 

Of course, great performance is a matter of perspective and risk tolerance. And opinions can vary wildly depending on the time horizon as well. Nobody wants to be the one left holding the bag when an overvalued stock eventually pops. 

Therefore, before we proceed, a word of caution. 

The stocks outlined below may or may not be a good fit for your trading portfolio at this point in time. Do your own research before deciding whether an asset is a good fit for your own strategy, goals and investment horizon. 

And with that out of the way, let’s take a look at the best and worst performers of 2021, based on their year-to-date performance. 

We’ll start with the stocks that soared despite the pandemic-induced volatility and managed to smash market expectations.

The best-performing stocks of 2021 

1. AMC and GameStop

Is anyone surprised that the internet’s favorite and highly controversial meme stocks could have rallied so hard this year? Probably everyone. Yet, AMC Entertainment Holdings, Inc. and GameStop Corp. provided shareholders with returns upwards of 1.370% and 800% respectively. 

GME’s stock has been highly volatile throughout the year, which is to be expected from such a speculative asset. In January, 2021 GME came out of the gate swinging, achieving a fresh all-time-high at $321, and after several peaks and valleys, it’s currently trading near $157 - a 800% year-to-date gain.

The company’s third-quarter financials registered net sales of $1.29 billion compared to last year’s Q3 revenue of $1 billion, which according to the earnings report is attributed to the company’s newfound business relationships with the likes of Samsung, LG and Razer among others. 

AMC’s stock may be changing hands at a modest $29 per share as of late, yet its year-to-date gains exceeded 1,300%. Its third-quarter revenues reached $763 million in Q3 2021 compared to the $708 consensus as more than 40 million moviegoers flocked to the company’s cinemas amid rising vaccination rates. 

Revenue is also forecast to grow by 41% per year and as of the end of Q3, AMC has more than $1.8 billion in cash and cash equivalents.

2. Moderna

Vaccine stocks will likely continue to look healthier and healthier as the pandemic continues to dominate the headlines. And as Moderna, Inc., has already announced its booster dose is effective in tackling the Omicron variant, its stock may continue to rally. 

Moderna is currently trading at $276, which may be a far cry from its $480 all-time-high reached in August 2021, but it’s still up by more than 147% year-to-date. 

Admittedly, Moderna’s Q3 earnings fell below analysts’ expectations, however, revenues came in at $5 billion making the company profitable - all thanks to its vaccine sales. For comparison, the previous year’s third-quarter revenues were only $157 million.

Overall, this biotech company is sitting on a great balance sheet and enjoys a proven track record. 

3. Ford Motor Company

Ford may have faced headwinds due to the volatility in oil prices and the ever-growing chip supply shortages, however, the American auto manufacturer had a great run this year and was one of the few that managed to outperform the S&P 500 in 2021. 

Ford’s stock is currently hovering near $19 – a major resistance level - after bouncing off its all-time-high at $21. The stock surged over 114% year-to-date amid a streak of better-than-expected earnings reports, and analysts’ estimates suggest that it’s still largely undervalued by more than 30%. 

The company is heavily investing in electrified vehicles, which could position it to outgrow Tesla in the next few years. 

Ford achieved great results in Q3 with $35.7 billion in revenue and a net income of $1.8 billion. 

4. Nvidia

NVIDIA Corporation is a designer of graphics processing units (GPUs) for the gaming and professional markets, as well as system-on-chip units (SOCs) that power artificial intelligence and high-performance computing systems.

NVIDIA's stock has been performing great in 2021, growing by 107% year-to-date.  In the third quarter of 2021, NVIDIA reported a record revenue of $7.10 billion which is a 9% gain from the previous quarter and a 50% gain from Q3 2020. 

5. Alphabet (Google)

While the FAANG group of stocks and their record market cap gains throughout the pandemic have placed them in a league of their own, it would be unfair not to mention the big winner of the tech stock rally on Wall Street this year.

Google’s stock has grown by 64% year-to-date, starting the year at a modest $1,726 and now ranging near $2,832. The company’s market cap hit the $2 trillion mark for the first time back in November before the stock dipped below the $3,000 handle. 

However, future growth is not an issue for Google, and the company’s CEO is confident that search and ad revenue will soon push valuation towards $3 trillion.    

The worst-performing stocks of 2021

Now, onto the stocks with the most disappointing performance. However, keep in mind that a beaten-down stock may not be completely out of the game and instead may present a buying opportunity for patient investors who can hold out during the dip. 

1. Twitter

Twitter’s stock price dropped by 18% year-to-date despite third-quarter earnings meeting analyst estimates.

Q3 revenue grew to $1.284 billion compared to expectations of $1.285. This translates to a 37% increase from last year’s third quarter. And earnings are forecast to grow 67% per year.

Therefore, while Twitter may have underperformed this year, investors may consider this a good opportunity to buy in at a discount. 

2. PayPal

The digital payments titan is currently valued at $222 billion. PayPal peaked at $358 back in July 2021, however, it’s now trading well off its highs at $189.

PayPal’s year-to-date returns are also down 18% as Q3 was quite underwhelming in terms of earnings. Despite Q3 revenues of $6.1 billion – a 13% year-over-year rise – this was one of PayPal’s weakest quarters in the last couple of years. 

3. Zoom

While Zoom is the ultimate example of a stock that thrived during the pandemic, it’s now experiencing a dramatic slowdown.

Zoom’s stock tumbled in 2021 and is now down 44% year-to-date while earnings are stronger than ever. Third-quarter revenue came in at $1.05 billion beating expectations by 35%.

Zoom also generated upwards of $390 million in free cash flow in Q3 for a total of $1.6 billion this year.

4. Alibaba

Alibaba’s stock got hit hard across the board in 2021, starting from $270 in February to $120 as of December 22 - bringing its year-to-date performance to a negative 48%.

This disappointing performance is only made worse if we compare it to the competition in the US, which skyrocketed this year. However, this blow has more to do with the Chinese government and its efforts to rein in big tech and especially Alibaba and its CEO, Jack Ma.  

In Alibaba’s Q3 earnings call, the company reported $31,147 million in revenue, which translates to an increase of 29% year-over-year.

Wrapping up

The pandemic accelerated trends and widened the gap between the small-cap and big-cap stocks. The world, the global economy and the financial markets will likely remain forever changed by these events, which are reflected by the fluctuations on the charts themselves. 

There are still some days to go before we bid farewell to a highly turbulent, and equally exciting 2021, however, the market may still hold surprises despite the thin liquidity expected amid the holiday season.

This was our year-in-review, and we are eager to see what new opportunities await us in 2022. 

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