Investors have been on a roller coaster ride for the past four years. One of the longest bull markets in history was brought to a screeching halt by the global pandemic. The S&P 500 lost over one-third of its value in a matter of a few weeks.
Yet immediately afterward, the popular benchmark index rocketed higher, more than doubling in value over the next 21 months. It then lost a quarter of its value again before turning north once more and running 50% higher. You’re not alone if you’ve experienced vertigo during this time.
Yet one constant has been growth stocks leading the market’s gains each year. Although many have been technology stocks like Nvidia (NASDAQ:NVDA) that did the heavy lifting, if you ignored other investments, you missed out on many other great opportunities.
Below are three growth stocks that have been outstanding investments that beat the S&P 500 over the past five years. They hold the promise of handily outperforming the market in the years ahead, too.
Amgen (AMGN)
Biotech giant Amgen (NASDAQ:AMGN) owns a portfolio of billion-dollar drugs including its lead osteoporosis and bone cancer therapy Prolia. The treatment delivered $1 billion in sales in the first quarter alone. Amgen had 10 drugs that delivered at least double-digit volume growth during the period. Overall, U.S. volume grew 29% while international volume grew 17%. Absent last year’s acquisition of Horizon Therapeutics, product sales grew 6%.
One of the biggest drivers of future growth could be maritide (AMG 133), Amgen’s obesity drug candidate. The biotech concluded Phase 2 trials and though it didn’t release many details, it seemed positive enough to warrant moving onto Phase 3 trials.
Obesity drugs, of course, have been one of the biggest investment themes behind artificial intelligence. Novo Nordisk (NYSE:NVO) set off a round of investment in the category with its two leading therapies, Ozempic and Wegovy. Eli Lilly (NYSE:LLY) came to market soon after with Mounjaro and Zepbound and numerous other pharmaceuticals and biotechs are piling into the space.
Amgen stock is up 43% over the past year and is 116% higher over the last five years, ahead of the S&P 500’s 101% total return. Trading at 16% of next year’s earnings, look for AMGN to pad its lead in years to come.
Netflix (NFLX)
Streaming leader Netflix (NASDAQ:NFLX) goes from strength to strength as much of the rest of the competition weakens. The movie streamer ended the second quarter with 277.7 million global paid subscribers, 16.5% year-over-year growth, and 8.1 million new members since the first quarter.
A lot of those new subscribers undoubtedly came as a result of cracking down on password sharing. It does, however, suggest investors should not expect to see the same kind of growth moving forward. Revenue, though, grew 17% to $9.6 billion leading to operating income surging 42% from last year. Margins widened by 490 basis points to 27.2%.
The strong performance comes as Paramount Global (NASDAQ:PARA) agreed to sell itself to Skydance Media, Warner Bros Discovery (NASDAQ:WBD) considers splitting its broadcast television networks from its streaming and studio operations, and Disney (NYSE:DIS) hopes to put together back-to-back quarterly profits of Disney+. With Netflix stock up 32% over the past year, there is still plenty of gas left in the tank.
e.l.f. Beauty (ELF)
The last growth stock to buy and hold forever is e.l.f. Beauty (NYSE:ELF). If you owned the stock at any time over the past five years, your portfolio is doing exceptionally well. It has returned nearly 1,000% over that time and in 2023 alone the stock tripled in value.
Helping to drive those gains is ELF’s positioning with teens. According to Piper Sandler’s Taking Stock With Teens semi-annual survey, the beauty products company holds the top position with a 38% market share, 16 percentage points more than the next leading brand.
While e.l.f. Beauty stock is up 23% so far this year, it had been up as much as 50% in March. It’s down 18% since then. That could be more of the market rotating out of previous growth names than anything wrong with ELF’s business.
Fiscal fourth-quarter revenue rocketed 71% higher to $321 million and was up 77% for the full-year. Investors may be concerned because e.l.f. Beauty only predicted 21% full-year growth for fiscal 2025. When a growth stock shows decelerating sales growth, they tend to get nervous even if that growth is still excellent.
ELF stock may go through a period of retrenchment but the long-term outlook remains strong and e.l.f. Beauty remains a growth stock to own forever.
On the date of publication, Rich Duprey held a LONG position in WBD stock. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.