A decade of growth stories - where are they now?

If you’ve been in markets long enough, you’ll know that every now and then (yet with remarkable consistency) a stock market theme comes along that captures people’s attention and dominates the zeitgeist.

Think infant formula, buy-now-pay-later, WAAAX (whatever happened to that movement?!?!) or lithium.

The common thread with these themes is that they start with a few ardent believers, before a groundswell of optimism kicks in, which leads to a period of euphoria. I’m more interested, however, in what happens after that.

So, in this wire, I’m going to look back at some of the dominant themes and stocks of the last decade and answer the question, “Where are they now?”

Aside from being a fun retrospective, hopefully it points out that growth waves don’t last forever and that there is certainly a time to be in and to be out of these themes.

Infant Formula

A decade ago, the start of the infant formula craze began with A2 Milk (ASX: A2M) and Bellamy’s up 205% and 724% in 2015, respectively.

The movement was driven by Chinese demand, stemming from an event that happened much earlier – in 2008 – where a number of babies died from consuming tainted formula.

At the peak of the Chinese demand, the term “Daigou” came to the fore, meaning “buying on behalf of”. Daigou were Chinese shoppers who would purchase products overseas and take them back to China – think suitcases full of baby formula – which caused much consternation among Aussie parents when there were formula shortages. 

Australian infant formula was considered white gold, with anything that A2 Milk, Bellamy’s, Blackmores, Bubs (ASX: BUB), Synlait (ASX: SM1), Clover Corp, or Fonterra made was gobbled up quicker than it could hit the shelves.

Whilst A2M would go on to become a market darling in the following years, reaching a high of $20 in 2020, post that peak the stock has had a much tougher time. It is currently trading around $8, having hit a low below $4 in late 2023. 

As for Bellamy’s, the share price peaked around $22 in 2018, and the company was ultimately bought out by China Mengniu Dairy for $13.25 in late 2019.

And the rest… Blackmores was delisted in August 2023 after experiencing a similar rollercoaster ride in its share price. Bubs Australia peaked around $1.60 in 2019, it now trades at 12 cents per share. Clover Corp is similar, peaking at $3.30 in 2019, now trading at 46 cents per share. Synlait is still listed but has gone through significant changes to operations and ownership.

Lithium – part one

Lithium will feature twice in this wire, and as George W. Bush once said;

“There's an old saying in Tennessee — I know it's in Texas, probably in Tennessee — that says, fool me once, shame on — shame on you. Fool me — you can't get fooled again" - (yep, he really said this)

Well, fooled again ASX lithium investors were, but more on that later.

The first instalment was driven by electric vehicle (EV) growth expectations and excitement around Tesla. Some of the share price moves in 2016 were incredible;

• Orocobre up 96% (Orocobre merged with Galaxy Resources in August 2021, creating Allkem, which later merged with Livent to become Arcadium, which Rio Tinto (ASX: RIO) acquired)
• Galaxy Resources up 356% (see above)
• Pilbara Minerals (ASX: PLS) up 56%

The most interesting story here is Pilbara. Whilst anyone who invested in 2016 more than likely made some money over the journey, those who bought into the second wave through 2021-2022 might not have been so lucky. We’ll get to that shortly.

Tech and the onset of WAAAX

2017 was an interesting year for a couple of reasons. Buy-now-pay-later (BNPL) started to come onto the radar but wasn’t yet the all-conquering behemoth it would be. And whilst the term WAAAX wouldn’t be coined for another couple of years (in 2019), it was some of the constituents that would really light things up in ’17.

• Afterpay was up 121% (but you ain’t seen nothing yet)
• Appen (ASX: APX) was up 192%
• Altium was up 64%
• Out of interest, Pro Medicus (ASX: PME) was up 81%

Appen and Altium are the stories out of this lot, with the former the poster child for riding the wave but also knowing when to bail. The share price peaked above $31 in 2020 but now trades around $1.14. The company lost some major clients, which led to subsequent financial decline and a collapse in the share price.

Altium had a better time of things, with the company acquired by Japan's Renesas Electronics Corporation in a deal valued at approximately $9.1 billion. Under the terms of the agreement, Renesas purchased all outstanding Altium shares at $68.50 per share, marking a 39% premium over Altium's one-month volume-weighted average price prior to the announcement.

Altium was removed from the index in July 2024, completing one of the happy ending stories out of this bunch.

The year of healthcare

2018 was the year of healthcare, with CSL (ASX: CSL) up 31%, Pro Medicus up another 24%, and ResMed (ASX: RMD) up 44%, whilst Appen (54%) and Altium (63%) also kicked on – although you already know how those stories end.

If 2018 was broadly the year of healthcare, then 2019 zooms in on Pro Medicus specifically.

It is in this year that PME might first rightly be considered a market darling, rocketing from around $11 to a high near $37 in September - only to roll over and close the year around $22. A wild ride, yes… but also a preview of things to come.

Just this year, PME topped out near $300, collapsed to $161 just last month, and is now trading around $275 – talk about a wild ride!

The PME story is still being told in real time, but wowee, just look at that chart above - what a journey so far.

Thought infant formula was crazy? Buy-now-pay-later says, “Hold my beer”

You’ll forgive me for dragging your minds back to 2020 – it’s a period most of us would rather forget. In a market sense, perhaps nothing captured the complexity of boredom we all faced through the pandemic quite like the BNPL movement that was fuelled by us sitting at home, ordering things online.

The pandemic kicked off in January 2020 and we were in lockdown by March 2020. Afterpay’s share price surged from around $9 in March 2020, to more than $158 by February 2021 - a 1650% jump. Coincidence? No.

Afterpay wasn’t the only player to benefit;

• ZIP (ASX: ZIP) rallied 49% (it was more than 200% at the high)
• Openpay rallied 80%
• Sezzle put on 195%

In a classic case of ‘where are they now?’, only one of those companies is still ASX-listed – ZIP. And whilst it had a solid 2024 and pretty much became a market darling again, surging from around 65c to a high above $3.50, if you were still holding from anywhere near the $14.50 high from 2021, it didn’t really matter. Proof, however, that themes – or at least certain stocks within themes – can have multiple lives (as we’re about to see with lithium).

What about the rest?

Afterpay was taken out by Block (formerly Square) in 2022 in a $39 billion deal. With the benefit of hindsight, that price appeared steep – but we’re all geniuses after the fact. So, Afterpay shareholders made off like bandits. How did the rest of the BNPL believers fare? Mixed, at best.

Sezzle, after a proposed agreement to be acquired by ZIP fell apart in 2022, was delisted in Australia and relisted on the Nasdaq in 2023, where the share price has gone from around US$13 in August of that year, to just north of US$100 per share recently – not bad.

As for Openpay? It is no longer operating, having gone into liquidation in 2023.

Lithium – part two

Beyond these peaks, new peaks shall rise... and then crash and burn. That's the story of lithium part deux. 

This time, it was fuelled by forces similar to part one - electric vehicles. However, it was actual sales (rather than the promise of future sales in part one) that drove the move, as global EV sales doubled in 2021 to almost 7 million units.

But it wasn't just EVs that drove the rally in the lithium price. Supply-side bottlenecks and policy tailwinds also contributed. That confluence of factors saw lithium rally all through 2021 and well into 2022, before the price changed course aggressively in November. By the end of 2024, the lithium price was back to where it was when the rally started in 2021. 

 

Still, there were some big share price moves from peak to trough, and if you managed to time it right, there was money to be made. 

• Pilbara went up nearly 400% between the January 2021 low and the October 2022 high.
• Core Lithium (ASX: CXO) went up more than 1000% between the January 2021 low and the November 2022 high.
• Liontown (ASX: LTR) went up more than 600% between the January 2021 low and the November 2022 high.

The most surprising growth story of all... 

2023 saw a flight to safety amid economic and market uncertainty. Monetary policy was the major factor, as the US Federal Reserve, ECB, RBA, and others continued hiking rates aggressively to combat persistently high inflation.

The commentary at the time was that central banks would keep hiking until something broke. Break they did in March, with the collapse of Silicon Valley Bank, Signature Bank, and later Credit Suisse rattling global markets. Throw into the mix concerns about a slowing global economy and serious talk of recession, and investors were rightly on edge. 

So, where did they park their money? Equally surprising and unsurprising, Aussie investors put their money in the bank. More specifically, they bought Commonwealth Bank (ASX: CBA) shares. And they've kept buying them to this day. 

That's right, the monster run in CBA started in October 2023 and continues unabated. What's the reason for the rally? Many have tried to explain it. All have failed.

Last year

2024 was a bit of a mixed year when it comes to growth stories, with a couple of the previous narratives and stocks bobbing up once again. 

At a sector level, tech took the honours with a more than 50% gain. Certain healthcare stocks also enjoyed monster returns, whilst BNPL was back in the spotlight courtesy of ZIP. 

• Zip up 360% in 2024
• 360 (ASX: 360) up 198%
• Sigma (ASX: SIG) up 162%
• Pro Medicus up 161%
• Telix (ASX: TLX) up 144% 
• Technology One (ASX: TNE) up 98%

Last year provided a couple of important lessons when it comes to growth stories. Firstly, like Lazarus, they can rise from the dead. 

ZIP was dead (at least from a growth stock perspective) after the first wave of BNPL stocks fizzled out, but managed to lift itself off the canvas. Lithium, as we saw, also enjoyed multiple waves over the past decade. So growth investing sometimes requires being flexible, looking at things with fresh eyes, and being willing to take on new information as it presents itself. 

Equally, there are other parts of growth investing that require taking a leaf out of Jesse Livermore's playbook: Be right and sit tight. 

If you had sat in a handful of tech and healthcare names over the past decade and not tinkered, chances are you'd be sitting pretty today. Tough to do given the volatility, but that's what being a great growth investor requires. 

The key, ultimately, is knowing when to sit and when to bail. Again, not easy, but if you can master that, all the riches shall be yours. 

Over to you

What growth wave did you catch and which did you miss? Share with us your stories about the great wins and the frustrating misses. 

Also, did I miss any great growth stories? Let us know in the comments section below.