Tuesday investors will digest earnings from Walt Disney Company (DIS) and Discovery Communications (DISCA). Investors will be looking for an update from Disney on its upcoming purchase of $71B of Twenty-First Century Fox (FOXA) assets (FOXA reports earnings Wednesday). Analysts will also want an update on the new Disney streaming service, as the competition in that market is heating up. Discovery stock is up substantially since late last year, but has traded in a range since completing the acquisition of Scripps in March. Analysts are looking for year-over-year earnings growth of 23.5% after a 43% increase last quarter.
Tuesday also brings the release of the Labor Department’s JOLT report. The Job Openings and Labor Turnover survey provides data on both new job openings being created and employees quitting their current jobs. Both numbers are expected to rise as employees become more confident in the employment market and their prospects for higher wages.
CVS Health Corp. (CVS) and Booking Holdings (BKNG) will report earnings on Wednesday. CVS is a company in the midst of a squall, if not a small hurricane. The company faces slowing revenue, its long-term care Omnicare business is not performing as expected, and it is in the middle of an acquisition of Aetna. CEO Larry Merlo will need to be an expert juggler on the conference call to manage the wide range of issues. Booking, owner of Priceline.com, had a great run after its earnings release in late February, but has slowly faded since then. Analysts will be looking for continued growth in listings, and a possible double digit increase in room nights booked.
The MBA Mortgage Applications numbers will be released on Wednesday. The index measures applications at mortgage lenders and is a leading indicator for single-family home sales and construction. The number will be very closely watched as recent increases in interest rates have driven mortgage rates to their highest level in two months.
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Video games have certainly come a long way from the table tennis-inspired game Pong that was introduced in 1972. Today, people are actually being paid a lot of money to play computer games.
Welcome to the world of e-sports where millions of fans worldwide watch professional gamers in action. There are about 300 million people worldwide that watch competitive e-sports events regularly… a number that the consultancy Newzoo expects to double within five years.
And Goldman Sachs estimates that revenues for e-sports from ads, box office tickets and other sources may hit $3 billion by 2022.
Both may be a conservative estimate when you consider that Walt Disney (NYSE: DIS) gave competitive gaming its first test before mainstream sports viewers on primetime US television in July by broadcasting the finals of Activision Blizzard’s (Nasdaq: ATVI)Overwatch League on ESPN. Activision has signed a multi-year broadcast deal with ESPN, although the terms were undisclosed.
This is a major step forward for e-sports as Morgan Stanley analyst Brian Nowak told Bloomberg, “We view reaching audiences through linear media as the key next step in legitimizing and monetizing eSports. We continue to see licensing and streaming revenue as the largest component of Overwatch League monetization.
High viewership numbers attracts advertisers and sponsorship — $500 million worth in 2017 according to Newzoo — raising player winnings. An example of this was on display in May when EpicGames said it would provide $100 million in prizes for its popular FortniteBattleRoyale. Sponsorship, media rights, in-game purchases and tickets make free-to-play games lucrative. Fortnite generated about $300 million in revenues for its owner Epic Games.
Of course, there are many competitors in the fast-growing e-sports segment. Besides Epic Games and Activision Blizzard, another company leading the way is Electronic Arts (Nasdaq: EA). Consider that many e-sports fans are young men that also follow regular sports too. That plays right into the strength of EA with its sports games such as FIFA 19. With the real soccer World Cup ended, EA’s FIFA eWorld Cup 2018 championship took place this past weekend (August 4) at London’s 20,000-seat O2 venue.
However, neither EA nor Activision happen to be my favorite e-sports stock. Instead, it is the company that owns 40% of privately-held Epic Games and that is bringing the massively popular Fortnite to China – Tencent (OTC: TCEHY).
Tencent Dominates
E-sports is taking off globally, with even the International Olympic Committee considering adding e-sports as an event.
But it is absolutely exploding in China where over 400 million gamers are fueling viewership equal to or exceeding that of professional sports in the U.S. Consider that last year in China, there were more than 11 billion e-sports videos streamed. And there are more than 10,000 teams across the country despite just 12 spots in this year’s marquee King Pro League tournament. Last year’s matchups garnered as many as 240 million daily views — double the U.S. audience of the Super Bowl — on TVs, phones and computers.
No wonder then that Tencent has become one of the most aggressive promoters of professional e-sports. It is teaming up with Under Armour on game apparel and the National Basketball Association for a show that features top gamers. It’s adapting Honour of Kings into a fantasy novel and producing a TV series and film centered on players. And taking a page from Blizzard’s Overwatch League, it’s also decided on a more typical professional set-up where select clubs are guaranteed spots in tournaments such as for the King Pro League. Of course, it helps that the company is in the unique position of owning and backing signature titles such as Fortnite and League of Legends.
At the center of Tencent’s ambitions is the two-year old franchise, Honour of Kings. It is a blockbuster that took China by storm and is now being pushed abroad under the title ArenaofValor. The title combines elements of Chinese historical characters, heroes and culture and is the first mobile game developed in-house that has a chance of becoming a global blockbuster.
The international version will be one of six titles for the upcoming Asian Games. To boost its visibility globally, the company is inviting teams from South Korea, Malaysia and North America to join in another gaming showdown later this year.
Of course, e-sports is still a mere drop in the ocean for one of the world’s 10 largest companies and its expected $50 billion in revenue. But it’s a fast-growing segment that feeds Tencent’s core gaming business, while driving engagement across its many online platforms from WeChat (with one billion active users) and media to advertising.
Tencent, like its rival Alibaba (NYSE: BABA), is involved in nearly aspect of Chinese life such as e-payments where it is battling Alibaba for supremacy. E-gaming is a core business for Tencent, which is a must-own Chinese stock like Alibaba. And it’s a growth engine that is just revving up.
If you are interested in getting a piece of the action, do not be put off by the fact that Tencent trades on the over-the-counter market. It is the most active stock there on a daily basis with average volume of nearly five million shares. So there is no problem with liquidity.
And with Wall Street selling or shorting everything China-related, the stock is at the lowest level in over a year. That makes it a good time to buy.
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Interest rates are below the magic 3% number, earnings are strong, unemployment is low and the economy just came off its best quarter in 4 years.
Can it get any better?
Maybe. But if it even stays close to these bullish indicators, stocks will continue to climb. And if the broad market doesn’t cooperate, there are still sectors and specific companies that will continue to rally.
Below are the 10 best stocks to buy right now, regardless of a secular market rally or a more stock-focused run. These stocks have what it takes to keep their share prices on the rise for years to come.
There are always winners, even in tough markets. And these stocks typify the kind of companies that are riding long-term trends (or a shift in trends) and have what it takes to succeed in these dynamic times.
Best Stocks to Buy Now: Amazon (AMZN)
Source: Amazon
Amazon.com (NASDAQ: AMZN) is pretty much a given on this list. And it’s not just about its e-commerce empire. There are plenty of stats that show some of the major retailers are still significantly larger. It’s the fact that AMZN continues to dump its growing revenue back into its businesses. It’s not content to build up a cash hoard or dole out a symbolic dividend.
The case for Amazon grows and grows. It’s the leading cloud business in the world. It owns a grocery store chain. It’s a major entertainment company. It’s looking to get into the prescription drug business. It has its eye on building out its own logistics enterprise to support its e-commerce.
This is what makes AMZN a great stock now, and for many years to come.
Best Stocks to Buy Now: Texas Pacific Land Trust (TPL)
Source: Shutterstock
Texas Pacific Land Trust (NYSE: TPL) was created in 1888, from the reorganization of the Texas and Pacific Railway.
Basically, the trust received 3.5 million acres of land from the railroad and is now one of the largest landholder in Texas with about 888,000 acres of land in 18 counties that it manages.
This means TPL manages oil, gas, mineral and water rights on all this property as well as choosing what it wants to sell or lease. With some of the most productive shale properties this is a big deal.
Plus, there are a lot of companies moving to Texas, which provides even more development opportunities.
TPL stock is up 80% year to date and this trend is certainly TPL’s friend.
Best Stocks to Buy Now: Abiomed (ABMD)
Source: Shutterstock
ABIOMED Inc (NASDAQ: ABMD) has a $16 billion market cap, but it’s been around since the 1980s.
As a matter of fact, the founders of ABMD invented the first artificial heart. And today, the company does one thing — the Impella brand of artificial heart valve.
Now, name brand medical equipment isn’t exactly like name brand pharmaceuticals. You don’t ask your doctor what brand of valve you’re getting — if you even have the opportunity to ask.
And there are plenty of larger medical equipment companies that have a heart-pump division. But ABMD focuses on one thing. And it has a global reputation. It’s already very popular in Germany and Japan as well as the U.S.
ABMD continues to grow — up 102% year to date — and the graying of the developed world’s population plays to its growth. It could also be a very attractive acquisition for a bigger firm.
Netflix Inc (NASDAQ: NFLX) is one of the famed FANG stocks. And along with AMZN, it makes our top 10 list.
This may be surprising given the fact that NFLX recently announced it missed its projected new subscriber numbers for the quarter by almost 1 million subscribers.
But then again, NFLX stock is trading at a PE of 157. That’s higher than AMZN’s. And it was even higher before the selloff.
The simple fact is, NFLX still has plenty of the world to conquer and its focus on content around the globe will be an asset it can monetize long after it subscribes everyone it possibly can to its services.
Right now, its big push is in India, where there are over 1 billion people. It has already started developing original content for the country and is hoping to break through in coming quarters.
Best Stocks to Buy Now: SVB Financial (SIVB)
Source: Shutterstock
SVB Financial Group (NASDAQ: SIVB) is an interesting new iteration of traditional banks.
Say you have a small bank where most of your customers come from Silicon Valley and the tech start-up culture (and money). You get depositors that are looking for opportunities in start-ups and you have cash to lend to these small businesses.
Plus, your customers are the people who have track records of successfully starting new firms. It’s like building a private investment bank focused on a specific sector.
SIVB is now expanding its operation up the West Coast to Washington state, where a similar culture exists and to other tech cities around the country.
Best Stocks to Buy Now: Arista Networks (ANET)
Source: Shutterstock
Arista Networks Inc (NYSE: ANET) was on quite a roll for a while. While year to date it has managed about an 11% gain, for the past 12 months it has delivered a 52% return to its investors.
ANET is cloud computing company that has become a major competitor to some of the bigger players in the networking and storage space. And with a $20 billion market cap, ANET is big enough to grow on its own, or it could be an acquisition target for one of its big competitors or a big tech firm looking to buy a spot in the space.
The problem with the legacy players in the space is they can’t reinvent the systems they already have in place. ANET provides much cleaner and less cumbersome solutions because it doesn’t have to worry about all the legacy hardware it needs to support and transition.
This slow time is a good time to get in for the long run.
Best Stocks to Buy Now: Ligand Pharmaceuticals (LGND)
Source: Shutterstock
Ligand Pharmaceuticals Inc (NASDAQ: LGND) is a new breed of pharmaceutical company.
In the old days, a biotech or pharmaceutical company would have an R&D division looking for new drugs, a team that would do early-stage development and reformulation, a team for late-stage development, another for testing and trials, and another for commercialization or partnering strategies.
But as the industry got bigger, all these divisions became expensive and costly to manage. And things got lost in the pipeline.
LGND focuses on the discovery, early-stage development, reformulation and partnering. That keeps it laser focused and cuts out all that work for its partners who handle the backend.
And given LGND stock is up 82% in the past year, this strategy is not only working, but it has a lot of believers.
Inogen Inc (NASDAQ: INGN) makes portable oxygen concentrators. While that doesn’t seem like it’s a big business, it has given INGN a $4 billion market cap as one of the leaders in the sector.
Traditionally, people with breathing issues have had to haul around oxygen tanks. They’re really heavy and aren’t exactly easy to get around with, especially for people that are older and less agile than they used to be.
It’s an inelegant and difficult solution to the problem. INGN’s concentrators are game-changers. They can be easily carried around and home units are also easily moved.
They basically convert the ambient air into concentrated oxygen, so you don’t have to haul a tank around. You just charge the unit and go.
As America grays, this type of equipment has growth path for decades to come. Its up 130% in the past 12 months and 75% year to date.
Medifast Inc (NYSE:MED) is part of one of the hottest trends out there that doesn’t have to do with technology — prepackaged health and nutritional foods.
You’ve heard of Weight Watchers (NYSE:WTW) and Jenny Craig. Well Medifast has been around a long time as well, and it’s starting its own growth trend, even without Oprah.
MED stock is up a whopping 405% in the past 12 months and 207% year to date.
And the crazy thing is, you don’t really hear about this stock. What’s more, after all that massive growth, the stock is still trading at a PE of 76, half of that of NFLX or AMZN.
Best Stocks to Buy Now: Micron (MU)
Source: Shutterstock
Micron Technology (NASDAQ: MU) is memory maker. And I don’t mean that it makes life memorable. It makes memory chips, especially the new generation of flash memory chips.
Certainly there are other bigger chipmakers that make memory chips and much more. But MU is focused on this major sector. And is leveraged to its growth.
Many are coming to believe that this sector’s cyclical nature has been uprooted by the fact that the mobility revolution as well as the advent of cloud computing, Big Data, augmented/virtual reality and the Internet of Things. Demand has become less cyclical and more of a constant, which will have a significant effect on MU, as a leader in this sector.
MU stock is up almost 90% in the past year and 28% year to date. And this is with some in the industry still thinking the cyclical nature of the past will somehow reassert itself. Don’t count on it.
Louis Navellier is a renowned growth investor. He is the editor of five investing newsletters: Blue Chip Growth, Emerging Growth, Ultimate Growth, Family Trust and Platinum Growth. His most popular service, Blue Chip Growth, has a track record of beating the market 3:1 over the last 14 years. He uses a combination of quantitative and fundamental analysis to identify market-beating stocks. Mr. Navellier has made his proven formula accessible to investors via his free, online stock rating tool, PortfolioGrader.com. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.
Get up to 14 dividend paychecks per month from safe, reliable stocks with The Monthly Dividend Paycheck Calendar, an easy-to-use system that shows you which dividend stocks to pick, when to buy them, when you get paid your dividends, and how much. All you have to do is buy the stocks you like and tell them where to send your dividend payments. For more information Click Here.
Of course, there are many competitors in the fast-growing e-sports segment. Besides Epic Games and Activision Blizzard, another company leading the way is Electronic Arts (Nasdaq: EA). Consider that many e-sports fans are young men that also follow regular sports too. That plays right into the strength of EA with its sports games such as FIFA 19. With the real soccer World Cup ended, EA’s FIFA eWorld Cup 2018 championship took place this past weekend (August 4) at London’s 20,000-seat O2 venue.
Tencent, like its rival Alibaba (NYSE: BABA), is involved in nearly aspect of Chinese life such as e-payments where it is battling Alibaba for supremacy. E-gaming is a core business for Tencent, which is a must-own Chinese stock like Alibaba. And it’s a growth engine that is just revving up.
