Every investor dreams of finding an underestimated megawinner, and then reaping a big reward for seeing something most others didn't. Such trades are few and far between, however. Most stock picks end up being merely average performers.
Nevertheless, there's something to be learned by studying the few stocks that have turned fairly modest investments into seven-figure sums.
Here's a rundown of three names that have turned a $1,000 investment made at the right time into $1 million, if not more. See if you can identify what made these stocks such big winners, and then apply those ideas to your hunt for the market's next big winner.
It's not surprising that Amazon (NASDAQ: AMZN) earned top billing on this list. A $1,000 investment in its initial public offering (IPO) back in 1997 would be worth roughly $2.5 million today. That's huge, although rightfully earned. In many ways the company defined the e-commerce industry as it's known today, and with domestic market share on the order of 40%, it's still the name in the business to beat. It's doing OK overseas, too.
Just be sure to recognize the unique circumstances in place at the time it got going. Back in 1997 the internet was still relatively new. At-home computers were something of a luxury. You were almost certainly still using a dial-up connection, as broadband didn't become commonplace until the early 2000s. And even then, most websites were a bit clunky.
Amazon founder and then-CEO Jeff Bezos still saw the potential of an online mall, though, and was brilliant enough to accept ongoing losses in exchange for growing market share that eventually led to outright dominance of the North American e-commerce market. The company's also been consistently profitable since 2016, and increasingly so.
Granted, most of its recent profit growth stems from its foray in the lucrative cloud computing market. That's something of another bullish point, however. Amazon is willing to evolve over time, adding businesses that make sense to enter. Moreover, it's demonstrated that it's capable of doing so.
Almost as much as Amazon, Apple (NASDAQ: AAPL) is another name that's made a few millionaires out of small, patient investors. A $1,000 investment in the consumer-tech company's IPO back in 1980 would be worth a tad more than $2.4 million today.
Most people probably wouldn't have been so patient, of course. Apple was hanging by a thread back in 1997, when the late Steve Jobs took the helm again and began working some of his magic. That said, the bulk of this stock's incredible gain has only materialized since 2007, when the company introduced the first iPhone, beginning a race to empower the world with mobile, web-connected computers. The popular smartphone still accounts for about half of Apple's revenue.