“To date, the best-performing investment in my Stocks and Shares ISA is…”

Not all stocks are created equal — every investor will be aware of that, with most having had their fair share of damp squibs in their ISAs.

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

Midnight is celebrated along the River Thames in London with a spectacular and colourful firework display.

Image source: Getty Images

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

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.

The Pareto Principle informs the belief that 20% of the holdings in a Stocks and Shares ISA are responsible for 80% of the portfolio’s growth.

Here at The Motley Fool, we like to let our winners run! Below, a selection of our free-site contractors share their most-celebrated positions that are underpinning that 80/20 rule of investing.

Ashtead Group 

What it does: Ashtead Group provides rental equipment to a multitude of sectors in the US, Canada and the UK. 

By Royston Wild. I bought rental equipment giant Ashtead Group (LSE:AHT) for my ISA in autumn 2019. And I used share price weakness last summer to increase my holdings. 

The FTSE 100 firm’s blowout performance during the 2010s encouraged me to open a position (it was the FTSE 350’s best-performing share that decade). And it’s proved to be my greatest buy yet. 

My Ashtead shares have so far provided a return north of 82%. This is thanks to the company’s acquisition-led growth strategy, which has allowed it to thrive even in tough conditions. Latest results showed revenues and pre-tax profits up 23% and 29% respectively between November and January.

Acquisitions can carry unwanted surprises that erode shareholder value. But the firm’s solid track record helps soothe (if not totally eliminate) any fears I have on this front.

The fragmented nature of the North American rentals market leaves plenty more scope for Ashtead to grow through acquisitions, too. And I’m confident it could deliver explosive earnings as its market recover.

Royston Wild owns shares in Ashtead Group. 

Berkshire Hathaway

What it does: Warren Buffett’s company is a conglomerate. Its main operations are in insurance, railroads, and utilities.

By Stephen Wright. As of right now, the best-performing stock in my Stocks and Shares ISA is Berkshire Hathaway (NYSE:BRK.A)(NYSE:BRK.B). As far as I can tell, there are two reasons for this. 

The first is that it’s a really good company. It generates cash through a well-run insurance operation and invests it intelligently in places that generate good returns.

The second is that I’ve managed to avoid selling it. With other stocks, I’ve offloaded them at times when I thought they were overpriced, but with Berkshire I’ve held on for the long term.

Going forward, the biggest risk is that the company’s size means it won’t be able to grow at the rate it has before. This is something that CEO Warren Buffett is up-front about.

I accept that as a limitation, but I think Berkshire’s size also brings opportunities. It means it can do deals on a much bigger scale than less well-capitalized companies.

Stephen Wright owns shares in Berkshire Hathaway.

Rolls-Royce Holdings

What it does: Rolls-Royce designs, develops and manufactures aircraft and helicopter engines, combat jet engines, large commercial aircraft, unmanned aerial vehicle engines, and nuclear reactors.

By Harvey Jones. I was pretty confident I had chosen a good time to finally buy Rolls-Royce (LSE: RR) shares when I took the plunge on 1 November last year.

The stock had been a disaster zone for years, losing three quarters of its value as repeated profit warnings, a bribery scandal and the pandemic took their toll.

I decided things had gone far enough, and with Covid lockdowns easing and people starting to fly again, aircraft engine maker Rolls-Royce might just take wings.

Also, I thought it was a good time to buy shares generally, with the FTSE 100 dipping in mid-October.

Over three busy weeks I bought Persimmon, Rio Tinto and Lloyds Banking Group, but Rolls-Royce is the clear winner. up 84% since then at the time of writing.

I’m expecting the shares to idle for a bit while investors wait to see whether new CEO Tufan Erginbilgic can break new ground. 

This arguably remains a risky stock to buy, however. Rolls-Royce has high fixed costs and the return on its capital expenditure is measured in decades, with most of its revenues coming from the long-term maintenance contracts sold alongside its engines. As we saw during the pandemic, that leaves it particularly vulnerable during spells of short-term turbulence.

The company has been working down its debt, but it’s still on the high side at £3.3bn and requires further attention.

Rolls-Royce has a long way to go, but with a fair wind the worst may now be over. I’ve enjoyed the growth. Maybe one day I’ll get some dividends, too.

Harvey Jones has positions in Lloyds, Persimmon, Rio Tinto, and Rolls-Royce.

Tesla 

What it does: Tesla designs and sells electric vehicles, energy systems, and software systems internationally.

By Gordon Best. Tesla (NASDAQ:TSLA) has long been a favourite of the market. However, in the last year, many factors have weighed on the performance of the stock, including wider economic uncertainty, supply chain disruptions, and a range of Tesla specific issues.

CEO Elon Musk’s Twitter acquisition, growing competition, and demand concerns have sparked volatility in recent months.

However, in the last month, the share price has climbed over 30% following strong delivery numbers, as a new CEO for Twitter was appointed, and as Elon Musk met with Chinese officials to discuss a range of topics. Recent excitement in AI also presents a tremendous opportunity, as Tesla’s AI capabilities may be underestimated. 

However, the future remains unclear. Geopolitical tensions between the US and China, controversy surrounding Elon Musk, and recession fears may cause investors to retreat. Tesla’s performance will continue to be driven by how well factories scale, and how self-driving technology evolves. 

Gordon Best own shares in Tesla.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

The Motley Fool UK has recommended Tesla. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

More on Top Stocks

ESG concept of environmental, social and governance.
Investing Articles

5 sustainable UK stocks that Fools love

Five completely different stocks, all listed in the UK, that tick a wealth of ESG boxes as well as looking…

Read more »

Top Stocks

4 stocks Fools love with a long history of increasing dividends

Familiar with REITs? You may want to be after reading this, with two of the four dividend stocks falling under…

Read more »

Mother and Daughter Blowing Bubbles
Investing Articles

5 stocks that Fools have been buying!

Our Foolish freelancers are putting their money where their mouths are and buying these stocks in recent weeks.

Read more »

Top Stocks

5 stocks that Fools have recently sold

Three complete exits and one partial sale of a shareholding -- why did these five Fools sell these particular UK-listed…

Read more »

British Pennies on a Pound Note
Investing Articles

3 penny stocks Fools actually love for the long term!

Many speculate on which penny stocks might rapidly soar in price. But it’s worth reiterating that our favourite holding period…

Read more »

The flag of the United States of America flying in front of the Capitol building
Investing Articles

Best US stocks to consider buying in May

We asked our freelance writers to reveal the top US stocks they’d buy in May, which included a cybersecurity leader…

Read more »

Bearded man writing on notepad in front of computer
Investing Articles

Best British growth stocks to consider buying in May

We asked our freelance writers to reveal the top growth stocks they’d buy in May, which included a Share Advisor…

Read more »

Entrepreneur on the phone.
Investing Articles

Best British stocks to consider buying in May

We asked our writers to share their ‘best of British’ stocks to buy this month, including a broadcaster and a…

Read more »