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Is it too late to buy these top-performing shares in 2020?

Lloyd Prout
time and money

All of these NASDAQ and ASX stocks had an incredible 2019, with massive share price growth.

So as we enter 2020, is it too late to buy these top-performing shares? 

Nearmap Ltd (ASX: NEA)

Up 65% in 2019, $1.1 billion market capitalisation

Nearmap captures high resolution aerial imagery of wide-scale urban areas in Australia, New Zealand and the US multiple times each year. This fresh content, together with a range of analytics and tools, is instantly available in the cloud via web app or API integration. This location intelligence gives Nearmap great optionality and potential revenue streams.

Nearmap has great economics and is partially protected by its patents. This should help the company succeed over the long term, however, the recent rapid rise in share price means that there are lofty expectations built into today’s share price.

Aristocrat Leisure Limited (ASX: ALL) 

Up 57% in 2019, $21.8 billion market capitalisation

Aristocrat is a gaming company with a long history of success. Through acquisitions, the company has grown from predominantly a physical poker machine business into a diversified gaming business. A number of these acquisitions have been made in the digital gaming spaces of casino games and social games. This is because of the capital-light business model of the online and mobile gaming industry. As the company shifts towards digital, there should be a boost to margins over time.

Aristocrat estimates the global size of the casino market to be US$4.5 billion and the social gaming market to be worth US$45.9 billion. Over the next couple of years, the gaming market is expected to grow by 13% per annum to around US$73 billion. As a result, I expect the stock to keep on winning.

Microsoft Corporation (NASDAQ: MSFT) 

Up 57% in 2019, $1.2 trillion market capitalisation.

Bill Gates grew Microsoft into a technology behemoth on the back of the company’s incredible operating system. As Gates continues with his amazing philanthropic work, Satya Nadella is currently the CEO. Nowadays, just about everyone uses or has used a Microsoft product. Some are obvious, like the Microsoft Office package, which moved from the desktop to a cloud subscription. 

Some, however, are more in the background. Microsoft’s cloud offering, Azure, has been a powerhouse for growing both revenue and earnings at the company. Cloud is a growing trend which I don’t think is going away anytime soon and can continue to help drive Microsoft’s stock higher.

Satya Nadella has done a great job of pivoting Microsoft and growing the range of service offerings. Even on a price-to-earnings ratio of 30x and a market cap of more than $1 trillion, I expect the stock to perform nicely going forward.

Foolish bottom line

Each of these companies falls into a different capitalisation class. Nearmap is a small cap, Aristocrat a large cap and Microsoft a mega cap. Each also performed extremely well in 2019, handily beating the market. This is a perfect example of why you should consider buying stocks of different sizes. Winners tend to keep on winning, so I expect all 3 companies to continue to do well in 2020 and beyond.

The post Is it too late to buy these top-performing shares in 2020? appeared first on Motley Fool Australia.

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Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. Lloyd Prout owns shares in Nearmap Limited and Aristocrat Leisure Limited. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and recommends Microsoft and recommends the following options: long January 2021 $85 calls on Microsoft and short January 2021 $115 calls on Microsoft. The Motley Fool Australia owns shares of and has recommended Nearmap Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The Motley Fool's purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. 2020