One of the great myths of the financial newsletter industry is that every editor outperforms the market. It is, of course, not true. Despite all the claims, there’s no way every newsletter generates superior returns.
This is not to say that some newsletters don’t outperform. Many do. And fortunately for subscribers to the 100% Letter advisory service, we were one of the good ones 2013. Yes, I know this is a shameless plug. But I do have a more important point if you’ll just stick with me.
Supported by an exceptionally strong market that lifted the broad market above record levels, most of our small stocks surged. Based on simple math, assuming an equal dollar amount invested in each of our stocks, we outperformed the Russell 2000 Small Cap Index by 43.5%.
Here are three great stocks that helped 100% Letter wrap up 2013 with such a strong performance. I liked all of these stocks when I recommended them, and I still like them for 2014.
One of our biggest winners was Datawatch (NASDAQ:DWCH). Subscribers are currently up 126%. This micro cap Big Data company is just starting to turn heads, and its recent acquisition of Panopticon will help to make its product more user-friendly by integrating visual analytics.
Datawatch has been a strong performer and the stock can be a bit volatile given its small size and growing popularity. But after sticking with this great stock for well over a year now I’m even more convinced that DWCH has potential to eventually grow into a multi-billion dollar company. Buy on the dips and hold for the long-term.
Susser Holdings (NYSE:SUSS) is a really good example of an easy-to-understand company that has also been a great investment. Susser owns a chain of convenience stores and gas stations based in the booming state of Texas.
The simple business model – gas brings customers in the door and restaurant-quality food, quick snacks and drinks generate steady sales – is a hit. The company also spun off its wholesale division into an MLP. Subscribers are up over 150%, and I expect shares to continue to rise in 2014.
Best Buy (NYSE:BBY) has been a great turnaround story and the stock has been a standout performer, rising 40% since I recommended it. Frankly, I was late to recognize the opportunity. But the story is still far from over.
The positive catalysts behind BBY are still tracking in the right direction. The turnaround story is gathering momentum. Cool companies still want their products to be displayed in Best Buy stores. The revamped store layouts are great. And cost savings are bigger than planned.
Shares of BBY have been under a little pressure early in 2014. But I still believe this turn-around story has legs. I recommend building a position to hold for the long-term.
Looking Ahead To 2014
I’ve said it before, but I’ll say it again: The secret to making money in the stock market is not to simply invest in great companies, but to identify great investments that have positive catalysts on the horizon. All three of the aforementioned companies are great stocks that satisfy that criteria.
I firmly believe our catalyst-based strategy helped the 100% Letter outperform the market in 2013. And that a continuation of the strategy will help us outperform in 2014 too.
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