The best investment of the decade? A trainer shop
JD Sports (JD.L) is the best performing FTSE 100 stock of the last decade, with its share price up over 3,200% since January 2010.
Shares in the footwear and sports retailer were changing hands for 32p at the start of the decade. Today, the share price stands at 831.8p. £1,000 invested in January 2010 would now be worth £32,000.
Stockbroker AJ Bell (AJB.L) said the retailer’s share price growth over the last ten years outpaced all other current FTSE 100 constituents.
JD Sports’ incredible rise has come despite a difficult time for the wider retail sector. Many other traditional bricks-and-mortar retailers have struggled to compete with online-only rivals and seen sales and profits collapse. The FTSE 350 retail index (^FTUB5300), which tracks the share prices of a number of the UK’s biggest retailers, is down 0.6% since it was set up in 2013.
JD Sports has benefited from the recent rise of “athleisure” fashion. This trend involves sports and training clothes being worn for fashion. These items are JD Sports’ bread-and-butter and the business has been able to leverage a close relationships with Nike (NKE) and Adidas (ADS.DE) to stock exclusive items that keep people coming back.
The share price has also been boosted by international expansion. The company acquired US chain Finish Line for $560m in March 2018 and CEO Peter Cowgill called the deal “transformational” at the time.
James Illsley, a fund manager at JPMorgan who backs JD Sports, told Yahoo Finance UK in February JD Sports’s “excellent operational execution” was key to its success. The retailer has benefited from stability at the top: Cowgill and chief finance officer Neil Greenhalgh have both been at the company since 2004.
READ MORE: British retail is in turmoil — but the City still loves JD Sports
As well as outpacing competition over the last decade, AJ Bell said JD Sports was also the best performing FTSE 100 stock in 2019. The retailer delivered record results earlier this year and announced a deal to buy rival Footasylum in March. Competition regulators are investigating but that hasn’t stopped JD Sports’s share price rising 130% this year.
Other top performing stocks over the last decade include: Industrial equipment provider Ashtead (AHT.L), which has risen 3,110% since January 2010; property portal Rightmove (RMV.L), up 1,240% over the last 10 years; and engineering group Melrose Industries (MRO.L), which has risen by 1,190%.
Russ Mould, investment director at AJ Bell, highlighted the fact that four of the ten best FTSE 100 performers over the last decade only joined the bluechip index in the last two years.
“In other words, if you are looking for the really big winners, you are probably better off by starting to look in the FTSE 250,” Mould said.
“This harks back to Jim Slater’s assertion that ‘elephants don’t gallop,’ meaning that the established giants of the FTSE 100 simply can’t grow fast enough to necessarily generate these sorts of meteoric returns.”
