After nine years, the bull market in stocks has started to look a bit shaky lately. Major benchmarks have finally suffered a long overdue 10% correction, and some stocks have taken even larger hits as investors start to question how much longer rising stock indexes can help support individual stocks across the market.
Yet even with the bull market taking a breather, some stocks haven’t broken their stride at all. Since July 2017, a select few have managed to quadruple in price. Among them are Enphase Energy (NASDAQ: ENPH) , Nektar Therapeutics (NASDAQ: NKTR) , and Endocyte (NASDAQ: ECYT) . If you’re only now learning about these highfliers, your first and most obvious question is whether there’s anything more to be gained from buying their shares. Below, we’ll take a closer look at their prospects for further share-price appreciation.
ENPH data by YCharts . Returns since July 1, 2017.
Enphase’s day in the sun
Enphase Energy has mounted an impressive recovery, turning $1,000 into roughly $5,450 over the past nine months or so. Yet as strong as that gain looks, it’s only managed to regain a portion of the ground that shares of the solar micro-inverter specialist lost in the preceding few years. As a maker of equipment that residential solar installers to ensure that each individual solar module can deliver energy even if other modules in the system are in shadow or are otherwise unable to produce electricity, Enphase went through a period in which it lost market share to new competitors in the space.
Image source: Enphase Energy.
Lately, solar has seen a bit of a resurgence, and regulations that have required solar installers to use electronic systems at the individual module level have helped to support Enphase’s business. Recent earnings results show how the company has worked hard to reduce costs and boost margin figures, and some believe that Enphase could return to profitability in the near future. That’ll be necessary to justify the big gains in the stock so far, but if it works out, there could be still further boosts for shares.
Nektar Therapeutics has also enjoyed impressive gains that have turned every $1,000 invested nine months ago into more than $5,250 today. The company has worked on a number of biotechnology advances, with pipeline treatments for auto-immune diseases, cancer, and pain relief showing considerable promise. What’s vaulted Nektar into the public consciousness among investors is the fact that it has drawn interest from major pharmaceutical companies as collaborators, looking to lend their expertise in what they see as possible blockbusters down the road.
Right now, Nektar should have all the cash it needs to take its current candidates through development toward hoped-for FDA approval. With the potential for further milestone payments from its partners as well as the revenue that an approved treatment would fetch from patients, Nektar has plenty more room to run if things keep going well for the biotech company.
Endocyte stakes its claim
Finally, Endocyte is another clinical-stage biotech company, and it has seen the greatest gains of any of the three stocks on this list. The stock’s rise has boosted the value of investors’ holdings sixfold since mid-2017, and many are looking forward to further gains if things go well for the company.
Endocyte has further to go before it can turn its dreams into reality, with successful phase 2 results for its prostate cancer treatment leading to development of a new trial to begin later in the first quarter of 2018. It could still take years for the drug to be ready even for an application to the FDA for approval, and that makes the gains to date seem a bit premature. Yet with such encouraging results, enough investors are willing not to wait to pile into the stock that as long as no negative news comes out about the treatment, Endocyte could continue to see further gains.
Be smart with your investing
You can’t expect stocks to quadruple very often, and these three have a lot of special circumstances that have made them such strong performers. Yet with a lot of things going well for them, further gains for these companies are possible as long as conditions don’t turn against them.
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Dan Caplinger has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy .
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