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

All of these NASDAQ and ASX stocks had an incredible 2019, with massive share price growth. But, is it too late to buy these shares? 

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

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.

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 and expresses his own opinions. 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.

More on Growth Shares

Person pointing at an increasing blue graph which represents a rising share price.
Growth Shares

What to buy now with the ASX at a record high

Analysts think these shares could still rise strongly from current levels.

Read more »

A young man looks at a stylised investment graph superimposed on an exterior office building backdrop.
Growth Shares

Where to invest $10,000 in ASX 200 stocks today

Analysts think these high-quality shares are in the buy zone for investors right now.

Read more »

A man sits thoughtfully on the couch with a laptop on his lap.
Growth Shares

Two ASX industrials shares with buy recommendations

One broker believes these growth shares are set to rise.

Read more »

Man smiling at a laptop because of a rising share price.
Growth Shares

I think these 2 exciting ASX growth shares are buys today

These stocks could deliver big returns.

Read more »

a man in a business suit and carrying a laptop stands smiling with hand in pocket outside a large office building in a city environment.
Growth Shares

Buy these 2 impressive ASX 200 shares in July: experts

Experts are bullish about these two businesses.

Read more »

A bearded man holds both arms up diagonally and points with his index fingers to the sky with a thrilled look on his face over these rising Tassal share price
Growth Shares

3 ASX 200 shares set to dominate the next decade

Let's see why these shares could be great long term picks for Aussie investors.

Read more »

A group of businesspeople clapping.
Growth Shares

3 ASX growth shares with 10-year compounding potential

Let's see which shares are being tipped as buys for growth investors.

Read more »

Woman happy and relaxed on a sofa at a shop.
Growth Shares

Are these 2 top ASX growth shares buys?

Are these high-flyers still buys?

Read more »