The Motley Fool’s flagship Stock Advisor newsletter has outperformed the S&P 500 by nearly three to one since launching in 2002. Launched by brothers Tom and David Gardner, Stock Advisor focuses on explosive growth stocks that investors can hold onto for years to come.
Growth stocks had a banner year in 2021, but have suffered heavy losses in the first half of 2022. In this guide, we’ll take a look at the Motley Fool’s best stock picks of 2021 and see how they’ve performed so far.
What is The Motley Fool?
The Motley Fool is a stock research and investment idea platform founded by Tom and David Gardner in 1993. The platform offers a variety of paid stock picking newsletters that focus on growth stocks, offer real estate investing, dividend investing, options trading, and more. The Motley Fool services include Millionacres, Rule Breakers, Motley Fool Options, Everlasting Portfolio, Rule Your Retirement, and the Motley Fool Stock Advisor.
The Stock Advisor newsletter is the Motley Fool’s flagship service. The service has more than 700,000 subscribers.
Stock Advisor originated as a monthly stock picking service run by Tom and David Gardner. Each brother would issue a stock pick every month. As of 2022, the stock picks are issued by the Fool’s team of analysts who follow the same investment style as the Gardner brothers.
Motley Fool Investment Style
The Stock Advisor newsletter is focused on explosive growth stocks. Picks are concentrated on companies that are disrupting existing industries, building wide moats, or experiencing rapid and sustainable growth. Some of Stock Advisor’s best-performing picks include companies like Amazon, Costco, Disney, Nvidia, and Tesla.
Stock Advisor picks are intended to be held for at least five years, and the portfolio contains several picks that are more than 10 years old. Stock Advisor never issues short-term trade ideas, and many high-performing picks are re-recommended over time.
The service issues two new picks each month.
Motley Fool Stock Picks 2021
The Motley Fool rode the wave of enthusiasm for growth stocks in 2021, with nearly every pick in the portfolio posting gains in the months after it was added. Motley Fool re-recommended several stocks that have historically yielded very strong returns for the Stock Advisor portfolio. However, the risk-off shift in the first half of 2022 has erased most of the stock picks 2021 gains. Currently, none of the 24 stock picks issued in 2021 have unrealized gains.
Keep in mind, Motley Fool recommends holding stocks for at least 5 years, so short-term price action would be considered “noise” with this investment strategy. While investing is always risky, these recent price drops may present buying opportunities for new investors who want to start building portfolios. Only time will tell.
Let’s take a look at some of the best stock picks from 2021.
All performance data is as of May 2022. We will revisit this post within the year to reflect updated performance data.
- Date of original pick: 9/6/2002
- Date of 2021 pick: 5/20/2021
David Gardner originally recommended Amazon stock in 2002, a pick that has yielded gains of more than 13,800%. He also re-recommended in 2010 for a 1,102% gain and in 2018 for a 20% gain.
In 2021, David Gardner picked Amazon yet again because he sees even more growth ahead, and not only in ecommerce. Gardner pointed to cloud computing and advertising as areas of significant growth potential for Amazon, and said that moves into logistics, healthcare, or groceries could give Amazon an even larger moat in the future.
- Performance since original pick: 13,848%
- Performance since 2021 pick: -34%
- Date of original pick: 7/15/2016
- Date of 2021 pick: 8/19/2021
Shopify is a stock that Tom Gardner and his team keep returning to. Gardner first picked Shopify in 2016, and then twice more in 2018, again in 2020, and then two more times in 2021 – first in May, then in October. The 2016 pick is up 930%, while the 2018 picks are up 162% and 146%.
Tom Gardner believes strongly in Shopify’s ability to serve as a consistent, differentiated competitor to Amazon. The company offers its own payment network and makes it easier for small businesses to compete in the world of ecommerce, without giving up control over their operations.
- Performance since original pick: 930%
- Performance since 2021 pick: -76%
- Date of original pick: 11/16/2012
- Date of 2021 pick: 8/19/2021
David Gardner first recommended Intuit, the company behind QuickBooks, TurboTax, and Mint, in 2012. Since that time, the stock has gone up 615%.
Gardner re-recommended it in 2021 after seeing Intuit’s big bets on AI algorithms. He believes AI will enable Intuit to cut costs for its existing products and move into lucrative verticals like lending. He compared Intuit to companies like Microsoft and Adobe, which have generated high yet sustainable revenue growth rates.
- Performance since original pick: 615%
- Performance since 2021 pick: -28%
- Date of original pick: 6/16/2014
- Date of 2021 pick: 7/18/2021
David Gardner first recommended Idexx Laboratories in 2014 after spotting high growth in pet ownership in the US. The veterinary diagnostic company’s stock has since grown 460%, and Gardner sees an opportunity to double down.
Pet adoptions soared during the COVID-19 pandemic, and Gardner believes that high levels of pet ownership are here to stay. Couple that with increasing per capita spending on pets, and Gardner believes that Idexx Laboratories could continue to see strong growth in the years ahead.
- Performance since original pick: 460%
- Performance since 2021 pick: -33%
- Date of original pick: 6/16/2017
- Date of 2021 pick: 7/1/2021
Tom Gardner recommended Paycom in 2017, 2018, and 2021. He sees the company’s end-to-end human resources software platform as more essential than ever in a world of remote work and high employee turnover. He also points to the company’s high – and consistently growing – gross margin as a sign of its operational efficiency.
Gardner’s 2017 and 2018 picks are up 296% and 201%, respectively. The stock has lost roughly half its value in the 2022 sell-off, although it’s fared better than many other mid-cap tech companies.
- Performance since original pick: 296%
- Performance since 2021 pick: -26%
Motley Fool’s Lifetime Performance
When evaluating the performance of the Motley Fool’s 2021 class of stock picks, it’s important to keep a long-term perspective in mind. Many of these picks saw several months of initial gains, but they’ve been hit with steep losses in the first half of 2022. As a result, none of The Motley Fool’s 2021 recommendations currently hold unrealized gains.
However, many of the Motley Fool’s 2021 picks are re-recommendations of stocks that have dramatically outperformed the market since they were first added to the portfolio. Amazon, which was one of the first picks in the Stock Advisor portfolio, has returned nearly 14,000% over the past 20 years. Shopify, Intuit, Idexx Laboratories, and Paycom have all produced triple-digit gains since they were first recommended.
In addition, over the entire 20-year history of the Stock Advisor service, the portfolio has returned 322% compared to 116% for the S&P 500. Despite losses in the first half of 2022, the portfolio currently holds unrealized gains of 205%.
Aggressive investors may consider doubling down on some of the Motley Fool’s 2021 stock picks. All of them are currently selling at a discount relative to the prices at which they were recommended. We’ll update the performance of these picks later in the year.
Conclusion: Motley Fool 2021 Stock Picks
The Motley Fool doubled down on some of its historical strongest picks in 2021, seeing opportunities for several of the platform’s favorite companies to grow even more. While these stock picks have suffered heavy losses in the first half of 2022, the positions are intended to be held for at least five years.
The Motley Fool’s long-term performance suggests that many of these picks may pay off in the future. In the meantime, investors have an opportunity to buy the Motley Fool’s 2021 picks at discounted prices.