Out of all asset classes, it is stock market that can pride itself on delivering the most satisfying returns. Its average return that made it stand out is about 8-10% yearly in long-term.

As it is just an average, the potential gains we can get by betting on individual stocks are much higher and, if we are lucky, reachable in just a couple of months. And who would want to wait a year if he can get more in a month?

The key to reaching wealth on the stock market is to find out which stock will perform the best. This may get a bit complicating, as this topic has been discussed for decades and just a few people were lucky enough to bet on right stocks.

What might help is to look at the top performing stocks and search what do they have in common. And that´s what I´m going to do right now.

The summary of best-performing stocks in period 1/1/2017 – 16/3/2017, sector they belong to and market cap can be seen in the table below.

No. Ticker Sector Market Cap Perf YTD
1 TGTX Healthcare 787.43M 198.92%
2 GBT Healthcare 1.53B 161.25%
3 PME Consumer Goods 337.93M 145.40%
4 ESPR Healthcare 697.66M 136.82%
5 SBLK Services 569.96M 116.83%
6 ASMB Healthcare 434.87M 114.32%
7 NLNK Healthcare 629.81M 113.62%
8 GOL Services 570.53M 113.07%
9 AAOI Technology 853.21M 104.61%
10 OIBR-C Technology 5.42B 102.02%
11 APOP Healthcare 670.24M 101.62%
12 TGH Services 840.00M 101.34%
13 LJPC Healthcare 606.04M 98.35%
14 TTPH Healthcare 315.90M 95.29%
15 FWP Healthcare 1.31B 89.27%

 

What needs to be said is that I included only companies with a market cap over 300 mln. USD and excluded all REITs.

At the top stands TG Therapeutics, investing into which would almost triple our initial investment. Looking at its fundamentals, one would wonder why he should put some money into it, as the company was in a loss in last four consecutive years and ratios do not get any better. At the beginning of March, the stock jumped 90%, which according to The Motley Fool was caused by “release of positive results from its phase 3 clinical trial of its ublituximab TG-1101 treatment for patients with chronic lymphocytic leukemia”.

This scenario is nothing unusual in the healthcare sector, where stocks of many companies sensitively react to releases of drug tests and results. But it just implies the risk within these companies, as their success depends on whether their drug will prove itself to be considered for treatment.

Still, as seen in the table, betting on healthcare stocks can result in hefty profits as 9 out of 15 (60%) best-performing stocks in 2017 so far belong to this industry.

To conclude, putting some money into risky healthcare companies may bring outstanding returns in short period, but this reward comes with high risk of loss, therefore these companies should not form a significant part of our portfolio.