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3 Stocks for Profits from People Playing Video Games All Day

The definition of sports is changing. For those people who have never known a world without the internet, sports can mean something quite different than for us a wee bit older. For those people, sports are just as likely to be played sitting in a comfy chair with headphones, a keyboard and a mouse.

Welcome to the brave new world of e-sports!

This new realm for sports still requires quick thinking, lightning reflexes and dedication to the sport. And like traditional sports, these athletes are playing for substantial money. Here is a list of the top 10 purses for e-sports in 2017:

 

The e-Sports Market

According to PricewaterhouseCooper (PwC), the global e-sports market was worth $327 million in 2016. One reason for its smallish size compared to say the NFL is that e-sports is a collection of different game titles across different game genres, with different intellectual property holders that, to date, have not bargained together for TV (and streaming) rights and sponsorship deals.

But now e-sports is moving into the ‘major league’ of sports. They will be added as a medal event in the 2022 Asian Games. That’s not surprising considering that South Korea is the hot spot for these sports, with other Asian countries also joining in. The backers of e-sports are pushing too for it to be added as an official event in future Olympics too.

Any future Olympics boost will only add to the growth already occurring. PwC estimates that the e-sports market will expand at a compound annual growth rate (CAGR) of 21.7% through 2021 into an $874 million market. Other forecasts are even more bullish. For example, the Dutch research firm Newzoo says e-sports will be a $1.6 billion industry by 2021.

Whatever forecast you believe, the bottom line is that the e-sports industry is growing in leaps and bounds. Especially in certain countries… here are the projected growth rates for the three top e-sports countries – South Korea, China and the United States – according to PwC…

China is set to be the fastest grower with a 26.3% CAGR, with its industry set to hit $182 million in 2021. The growth there is being spearheaded by its two tech titans – Tencent Holdings (OTC: TCEHY) and Alibaba Group (NYSE: BABA). Tencent, which is a major games developer, agreed last May with the city of Wuhu to transform it into an e-sports hub, with a dedicated stadium to host international tournaments and with an e-sports university to train the next generation of players.

The next-fastest growth is forecast to come from the U.S. with a CAGR of 22.6% though 2021, while South Korea is expanded to expand at a 13.9 rate though 2021.

Eyeballs = Revenues

I believe these projected growth rates may even be conservative. The reason is because e-sports is becoming a major spectator sport.

Goldman Sachs estimates that the global monthly audience for e-sports will reach 385 million by 2022. That’s more than the NFL, folks.

That will give Amazon another boost, as if it needed it. It got into the ‘game’ early when it bought Twitch, a very popular live streaming platform for gamers, for $970 million in 2014.

Others have followed Amazon. BAMTech, Major League Baseball’s streaming company, is a subsidiary of Disney. In 2016, it agreed to pay video game developer Riot Games (owned by Tencent) $300 million over six years for the “exclusive rights to stream and monetize” League of Legends tournaments.

These viewer eyeballs will turn into revenues for the industry. You see, there are three main areas where e-sports can produce revenues. First is direct payments from live streaming services – some live tournaments have tens of millions of viewers. Last year, there were 11.1 billion e-sports videos streamed in China and 2.7 billion in North America, where about one-third of gamers reside.

The next source of revenue is the sale of content rights to broadcasters. Finally, advertising revenues, which today come largely from the gaming industry. But it isn’t hard to imagine a whole raft of companies looking to get their message in front of millions of viewers.

Goldman Sachs analyst Christopher Merwin said in a note to clients, “We expect sponsorship will be one of the largest revenue opportunities for e-sports.” He pointed to the fact that nearly 80% of the viewers are between the ages of 10 and 35, which is a very coveted demographic for advertisers.

Importantly, the backers of e-sports are being smart and adapting what works for traditional sports and applying it to e-sports. Such as creating a league and having permanent teams in many of the major cities. The parent companies of the New England Patriots, Los Angeles Rams and the New York Mets now own franchises (at a cost $20 million) in the first attempt to create an actual league.

The teams were sold by the world’s largest publisher of video games, Activision Blizzard (Nasdaq: ATVI), which came up with the idea of a 12-team Overwatch League. Unlike traditional U.S. sports leagues, this league also has teams from London and Shanghai.

Related: 5 Growth Stocks to Ride the Semiconductor Supercycle

The Overwatch League is not the only e-sports league in existence. There is a similar venture from Riot Games, which charged $10 million for franchises in the North American League of Legends Championship Series. Over 43 million people watched last year’s League of Legends World Championship online, up from just 8 million in 2012. Major venues such as Seoul, South Korea’s Olympic Stadium were sold out to watch the event.

The build-out of leagues is already attracting sponsors, as I hinted at before. Both Intel and HP are lead sponsors for the Overwatch League. And Geico and Nissan are among the sponsors of the North American League of Legends league while Coca-Cola sponsored the finals for the league.

e-Sports Investments

So how can you invest into this e-sports phenomena?

At the top of my buy list is the aforementioned Activision Blizzard, which also has a live streaming channel called Major League Gaming, which it acquired in 2016 for $46 million. It currently has many popular franchises including Call of Duty, Destiny, Skylanders, World of WarcraftCandy Crush and, of course, Overwatch.

Management believes the release of new titles, its expanding mobile pipeline and increasing initiatives in advertising and e-sports will drive growth. In-game net bookings are anticipated to show a double-digit percentage growth in 2018. The release of World of Warcraft’s Battle for Azeroth this summer should also boost growth this year as will Destiny 2. Activision also anticipates Overwatch League to be profitable this year. The company also plans to ramp up ad business by rolling out more video-based ad products.

For 2018, Activision expects GAAP revenues of $7.35 billion and earnings per share of $1.78. On a non-GAAP basis, revenues and earnings are expected to be $7.35 billion and $2.45 per share. Its stock, up about 30% over the past year, should enjoy another good year in 2018.

Next on the list is a rival of Activision, Take Two Interactive Software (Nasdaq: TTWO), which is best known for its Grand Theft Auto, Red Dead and NBA 2K franchises.

While trailing in the e-sports business, the company is finally moving ahead now. It inked a deal with the NBA to launch a NBA eLeague. Take Two had conducted an NBA e-sports tournament the last two years. The NBA will be the only major professional sports league to have its own e-sports league. The league will begin in May 2018 with so far 17 of the 30 NBA teams saying they will play for at least three years. The NBA eLeague recently held its initial draft.

Take Two is also expanding rapidly into mobile games. It strengthened this area of the company with its acquisition of Barcelona-based Social Point for $250 million in 2017. Social Point is one of the most prolific mobile game developers.

Take Two’s for fiscal 2018 centered on strength in its franchises like Grand Theft Auto, NBA 2K and WWE 2K, which should boost the top line in the fiscal year. GAAP net revenues are likely to be in the range of $1.80–$1.85 billion, above the earlier projection of $1.74–$1.84 billion. The company forecasts earnings per share in the range of $1.40–$1.60, well above the 55–80 cents projected earlier. Once again, that should keep the stock, up about 66% over the past year, moving forward.

Finally is a bit of a dark horse since it has yet to really move into e-sports, Japan’s Nintendo (OTC: NTDOY). The company has already enjoyed a major change in fortunes thanks to its launch of the record-breaking Switch console, causing its stock to nearly double.

 

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7 More of the Best Retirement Stocks No One Talks About

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Are you having a hard time selecting the best retirement stocks for your portfolio? If so, you’re not alone.

Last April, I recommended seven of the best retirement stocks no one talks about. These were companies with market caps greater than $2 billion yielding 1.5% or more delivering five consecutive years of operating profits and thinly traded at 500,000 shares in average daily volume.

Some of them you’re familiar with and some you might haven’t a clue what they do.

Together, the seven stocks averaged a one-year total return of 7.7% with just two stocks in negative territory; all of them I’d have no problem owning today, including EPR Properties (NYSE:EPR), which has lost one-fifth of its value over the past year.

Unfortunately, the SPDR S&P 500 ETF Trust (NYSEARCA:SPY) nearly doubled the group’s performance at 14.8%.

Undeterred, I’ve selected seven more of the best retirement stocks no one talks about. Only this time, I’m going to up the average daily volume ceiling to a million shares instead of 500,000 to see if we can’t come up with some even better options.

Best Retirement Stocks: Honda (HMC)

Source: Shutterstock

Yield: 2.5%

Even though car and truck sales have begun to slow after several years at a torrid pace, Honda Motor Co Ltd (ADR) (NYSE:HMC) is a great long-term buy because its vehicles remain with car-buying consumers.

The company set record U.S. sales in March despite both the Accord and CRV, which generated 43% of its volume overall, were down 13.1% and 6.5% respectively.

Not to worry, the Acura redesigns of both the TLX and RLX helped save the day; Acura’s March sales increased by 15.7% to 13,537 vehicles with over half from its SUVs.

Fear not, the Accord and CRV aren’t losing their popularity with consumers. The company chose to offer very little in the way of incentives in March on both vehicles. As we head into summer, Honda’s U.S. business will pile on the incentives and sales will come as a result.

In the third quarter ended December 31, 2017, Honda’s revenues increased 13.0% to $35.1 billion, while operating profits increased 37.0% to $2.5 billion.

For the entire fiscal year, Honda expects revenues to increase by 8.6%, while operating profits will decline by 7.8% as a result of pension plan changes and the settlement of its airbag class action suit. Take those out and it should make $913 million, an increase of 8.6% over last year.

Year-to-date it’s outperforming its peers by 215 basis points through April 10.

Best Retirement Stocks: Diageo (DEO)

Dividend Yield: 2.4%

Last year, I had the opportunity to trash a certain ETF only to change my mind less than eight months later.

The ETF in question?

The Spirited Funds/ETFMG Whiskey & Spirits ETF (NYSEARCA:WSKY), a collection of global companies manufacturing alcoholic drinks, including Diageo plc (ADR) (NYSE:DEO), the fund’s largest holding with a weighting of 17.5%.

Originally, I thought it was an expensive way to invest in the global trend to premium liquor brands, suggesting an investment in Diageo would do the same thing without having to pay a management fee.

Over the past year, the ETF generated an annualized total return of 29.6% compared to 25.1% for Diageo and 15% for the S&P 500.

Although I still believe an investment in Diageo is a great way to bet on the future success of premium spirits, you could make a lot worse investment decisions over the next few years than buying the WSKY ETF.

For those of you that care about the issue of gender pay equality, which I do, Diageo’s Great Britain unit has a gender pay gap of –9.8%, which means women at the company on average earn more than men. It is not, however, a reflection of equal pay for similar work.

Cheers!

Best Retirement Stocks: Canadian Imperial Bank of Commerce (CM)

Dividend Yield: 4.7%

The five big Canadian banks have long been regarded as some of the best-run financial institutions in the world, in large part a result of escaping the 2008 economic crisis relatively unscathed.

As risk-takers, Canadian banks rank well down the list, but for investors seeking juicy dividend yields, they’ve made wonderful investments.

In May 2012, I wrote Canada’s Banks: Better Than Most in which I took a quick look at the Canadian Imperial Bank of Commerce (NYSE:CM) and how it fared in comparison to JPMorgan Chase & Co. (NYSE:JPM), two banks that ranked highly in Bloomberg Markets’ second-annual rating of the World’s Strongest Banks.

CIBC was third; Jamie Dimon was 13th.

Also, in that piece, I highlighted three Canadian banks doing a lot of business in the U.S. — CIBC wasn’t one of them.

Well, that has changed in a big way in the past two years.

First, it paid $5 billion to acquire Chicago-based Private Bancorp in June 2017, a move that ups CIBCs U.S. profits to 10% of its overall profits. Eventually, the bank hopes to generate 25% of its annual profits in the U.S.

As Canadian banks go, CIBC is my favorite, and not just because it yields the most.

Best Retirement Stocks: Equity Lifestyle Properties (ELS)

Best Retirement Stocks: Equity Lifestyle Properties (ELS)

Source: Shutterstock

Dividend Yield: 2.5%

Of the seven best retirement stocks I’m recommending in this article, Equity Lifestyles Properties, Inc. (NYSE:ELS) would have to be the most boring, yet enticing option of the bunch.

Over the past decade, ELS stock has seen just one negative annual return, and that was a 14% drop in 2008. That year, the S&P 500 lost 37% and its residential REIT peers were off 23%.

All of this from owning land for manufactured home communities, RV resorts and campgrounds across North America. The company was founded in 1969, but it was only after billionaire Sam Zell and partners got involved in 1983, did business really begin to cook.

Since 2008, revenues have doubled to $912 million; operating earnings have more than doubled to $297 million, and dividends have increased five-fold to $1.95 a share.

It has got a wide-moat so large I suggested Warren Buffett should buy it last August.

ELS is the stock you put in a drawer and marvel at how it has grown ten years from now.

Best Retirement Stocks: Grupo Aeroportuario Del Pacifico (PAC)

Dividend Yield: 4.5%

Another stock I recommended Warren Buffett should buy is Grupo Aeroportuario Del Pacifico (NYSE:PAC), an owner and operator of airports based in Guadalajara, Mexico.

Heck, Buffett owns four airline stocks worth almost $10 billion, so a natural extension of that from an infrastructure standpoint would be to buy some of the airports these airlines fly in and out of.

PAC has a little of everything in terms of the types of airports it owns. Guadalajara and Tijuana serve the people living in those major Mexican cities; smaller airports in places like Mexicali and Morelia serve medium-sized Mexican cities; and airports such as Puerto Vallarta and Las Cabos service the tourist trade.

It’s a nicely diversified customer mix that keeps the company and stock moving higher. Over the past five years, PAC delivered an annual total return of 14% to shareholders.

In early January, PAC announced it had obtained long-term financing to make improvements at its Montego Bay airport in Jamaica, one of only two outside Mexico.

Like a lot of the airlines, Mexican airlines continue to grow the number of planes and flights they operate. In conjunction with a number of U.S. low-cost carriers adding flights into Mexico, the company’s future prospects look very good.

However, given the U.S. immigration policy combined with the negative effects of a renegotiated NAFTA agreement, PAC is not without some risk.

Best Retirement Stocks: Wyndham Worldwide (WYN)

Best Retirement Stocks: Wyndham Worldwide (WYN)

Source: Shutterstock

Dividend Yield: 2.4%

Operating one of the largest networks of hotel rooms in the world, Wyndham Worldwide Corporation (NYSE:WYNannounced in 2017 that it would spinoff the hotel group from its vacation ownership and vacation rental business, to create two independent publicly traded companies.

The separation is expected to happen any day now. Shareholders of WYN will get a pro rata distribution of the new hotel company’s stock.

As part of this move, it announced more of its hotel brands will get the “by Wyndham” moniker added to their nameplates. A total of 12 hotel brands are receiving the change including Super 8, Days Inn and the more upscale Dolce brand.

Why am I recommending a stock set to split in two?

Empirical evidence suggests that spinoffs often before better post-spin than pre-spin. In this case, Wyndham is taking a risk by adding its name to some of its value brands, but the company is boosting its franchise operations by 20% to ensure that all of its hotels are meeting the Wyndham standard.

InvestorPlace’s Lawrence Meyers recently commented that Wyndham’s hotels have occupancy rates of 60-64% compared to 75% for its peers.

By separating the hotel group into its own independent company, you can expect Wyndham to have a laser-like focus in the future on higher standards.

That bodes well for both stocks, post-split.   

Best Retirement Stocks: Snap-on (SNA)

Dividend Yield: 2.3%

Last August, I recommended that investors forget about Snap Inc (NYSE:SNAP) stock and buy Snap-on Incorporated (NYSE:SNA) instead.

Before I get into why I like the hand and power tools, let me just say that both stocks have been on a wild ride since my article.

SNAP, which I recommended you stay away from, was trading around $14.50 on August 22, 2017, the date of the article. It bounced around this price until February when it spiked to almost $21 on news it was adding users. It has since come back to where it was trading last August.

Nothing’s changed. I still don’t like the stock.

As for SNA, it basically did the same, going from $142 in August all the way to $184 in mid-January, only to be felled by a weak fourth-quarter earnings report. Now, it too is back where it was last August.

The biggest concern from analysts is that the company’s non-financed tool purchases are slowing meaning the company’s financial services business is propping up sales, something I recommended investors keep an eye on.

Why do I still recommend it as one of the best retirement stocks to own?

Because every company goes through cycles where business is booming. Now isn’t one of those times but it also isn’t terrible either.

The automotive repair business isn’t sexy, I’ll grant you. But given the average age of cars on the road is still pretty high, the company’s customers (tool buyers) are going to have plenty of cars to fix in the years ahead.

Five years ago, I might have been concerned that its tool business was losing a few sales. However, its three operating businesses provide the company with a much greater balance to see its way through the hiccups every business goes through.

Snap-on hasn’t traded this low very often over the last few years. Buy now and ride them to retirement.

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Buffett could see this new asset run 2,524% in 2018. And he's not the only one... Mark Cuban says "it's the most exciting thing I've ever seen." Mark Zuckerberg threw down $19 billion to get a piece... Bill Gates wagered $26 billion trying to control it...
What is it?
It's not gold, crypto or any mainstream investment. But these mega-billionaires have bet the farm it's about to be the most valuable asset on Earth. Wall Street and the financial media have no clue what's about to happen...And if you act fast, you could earn as much as 2,524% before the year is up.
Click here to find out what it is.

Source: Investor Place 

10 Stocks Hedge Funds Are Buying

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It is widely believed that everyday investors can glean valuable insight from Wall Street titans. While following big-name investors into various stocks is not a guarantee of a winning investment, investors love following icons, such as Warren Buffett.

Perhaps due to the notions that hedge funds are “sexy” and hard to access for many regular investors, many investors also like to follow the buys and sells of various hedge funds. The rub with this strategy is that hedge fund managers, no matter how long they have been around or how much money they run, are not infallible. In fact, data suggest many hedge funds have not beaten the S&P 500 in recent years.

Of course, there are hedge fund managers who perform well and charge their clients a pretty penny for the privilege. Here are some of hedge funds’ favorite stocks at the moment, a group that includes predictable fare as well as some more obscure names.

Apple Inc. (NASDAQ:AAPL) is the largest U.S. company by market value, so perhaps it is not surprising that the iPhone maker is usually a hedge fund favorite. While not a hedge fund, Warren Buffett’s Berkshire Hathaway Inc. (NYSE:BRK-A) is a major Apple shareholder. In fact, Apple is Berkshire’s top holding, even exceeding the likes of The Coca-Cola Co (NYSE:KO) and Wells Fargo & Co (NYSE:WFC).

The company, shares of which are up nearly 21% over the past year, recently launched a red iPhone 8 and the iPhone 8 Plus. While Apple is a story stock, there are some near-term issues to consider.

Recently Goldman Sachs said of iPhone sales it “ expects sales of 53 million units in the calendar first quarter. For the three months to June, Goldman said it expects sales of 40.3 million units, a reduction of 3.2 million from its previous forecast,” according to CNBC.

Stocks Hedge Funds Are Buying: Amazon (AMZN)

This one probably is not a surprise, either. Not when Amazon.com, Inc. (NASDAQ:AMZN) is one of just four U.S. companies with a market capitalization north of $700 billion. Recent data indicate that Amazon, the largest consumer discretionary company in the U.S., is a top 10 holding at 80 hedge funds, more than any other stock.

Although shares of Amazon are up 60.5% over the past year, analysts are exceedingly bullish on the stock. The average analyst price target on the stock is around $1,670, implying significant upside potential from recent closes around $1,440.At least two analysts have $2,000 price targets on Amazon.

Amazon is mostly known as a retailer, but much of the long-term allure comes from its cloud computing business, Amazon Web Services (AWS). That could be a $60 billion unit in just a few years.

Stocks Hedge Funds Are Buying: Alphabet (GOOGL)

Stocks Hedge Funds Are Buying: Alphabet Inc. (GOOGL)

Source: Shutterstock

Alphabet Inc (NASDAQ:GOOG, NASDAQ:GOOGL), the parent company of Google, is another hedge fund favorite. In fact, more than 50 hedge funds feature Alphabet among their top 10 holdings. Like Apple and Amazon, Alphabet is one of the U.S. companies with a market value north of $700 billion.

The three stocks highlighted here thus far cement at least one notion: Hedge funds love tech. Data confirm as much.

“Net exposures remain higher than the beginning of the year at 51 percent. The technology sector is still 37 percent of that total. Data shows that there has been some aggregate selling of technology stocks since the middle of March, but the magnitude has been relatively in line with other sectors,” Bloomberg reported, citing Morgan Stanley research.

Stocks Hedge Funds Are Buying: Bank Of America (BAC)

Stocks Hedge Funds Are Buying: Bank Of America (BAC)

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Among financial services stocks, Bank of America Corp. (NYSE:BAC) is one of the hedge fund faves. This could be a combination of hedge funds betting on banks in a rising-interest-rate environment, betting the Donald Trump Administration’s more favorable regulatory stance on the financial services sector will be a tailwind for the group or that financials are a credible play.

Shares of Bank of America are up more than 30% over the past year, putting the stock ahead of the Financial Select Sector SPDR (NYSEARCA:XLF) by more than 1,300 basis points.

The stock resides in the low $30’s at this writing, but some market observers believe it could jump to the low $40’s over the next 12 to 24 months.

Stocks Hedge Funds Are Buying: United States Steel (X)

United States Steel Corporation (NYSE:X) is not necessarily widely held by hundreds and hundreds of hedge funds, but what is notable about the largest U.S. steelmaker is that it is a favorite of some the best-performing stock-picking hedge funds.

Ordinary investors may want to be cautious with shares of U.S. Steel. The stock rallied earlier this year after the Trump Administration unveiled tariffs aimed at protecting domestic aluminum and steel producers. However, the White House subsequently announced diluted versions of those tariffs, including exemptions for several countries that are among the largest importers of steel to the U.S.

This stock is down nearly 18% over the past month.

Stocks Hedge Funds Are Buying: Caesars Entertainment (CZR)

Stocks Hedge Funds Are Buying: Caesars Entertainment (CZR)

Source: Shutterstock

Caesars Entertainment Corporation (NASDAQ:CZR), the owner of Caesars Palace among other casinos, is another widely held hedge fund stock. Thanks to a tax benefit, Caesars posted fourth-quarter earnings of $2.48 per share, well above the 8 cents Wall Street expected.

Caesars is out of bankruptcy, something the company appears to be celebrating with some nice compensation for its executives.

The stock surged almost 50% last year, but could be succumbing to profit-taking this year as it is down more than 13% year-to-date.

Stocks Hedge Funds Are Buying: SPDR Gold Shares (GLD)

Let’s change things up a bit and added an exchange-traded fund (ETF) to the list of hedge fund favorites. The SPDR Gold Shares(NYSEARCA:GLD) is the world’s largest gold-backed ETF and also a favorite ETF in the hedge fund community. Among non-equity ETFs, GLD is one of the most widely held by professional investors.

Historically, gold prices are challenged by rising interest rates because bullion does not pay a dividend. However, the dollar has not been responsive to the Federal Reserve’s recent rate hikes, which is good news for dollar-denominated commodities like gold.

Investors are responding as GLD has taken in over $1 billion in new assets this year. Near-term catalysts include a possible upside break of $1,400 and the belief by many in the gold industry that supply will be declining because most of the world’s easy-to-access gold has already been mined.

Stocks Hedge Funds Are Buying: NXP Semiconductors (NXPI)

Stocks Hedge Funds Are Buying: NXP Semiconductors (NXPI)

Source: Shutterstock

The status of NXP Semiconductors NV (NASDAQ:NXPI) as a hedge fund fave is probably attributable to Qualcomm Corp.’s (NASDAQ:QCOM) desire to acquire the remainder of NXP it does not already own. Qualcomm has recently extended the deadline on that offer multiple times.

NXP makes mixed signal and standard product solutions for radio frequency (RF), analog, power management, interface, security, and digital processing products.

Qualcomm’s interest in NXP could be its way of fending off Broacom’s (NASDAQ:AVGO) acquisition overtures.

Stocks Hedge Funds Are Buying: Allergan (AGN)

With hedge funds so enamored by tech stocks, that does not leave a lot of room for significant exposure to other sectors. Just three healthcare stocks are considered widely held by hedge funds and Allergan Plc (NYSE:AGN) is one of them.

Allergan has been a healthcare laggard over the past year, shedding more than 30% over that period while the S&P 500 Health Care Index is up 10.24%. Hedge funds could be wagering that Allergan, which makes specialty pharmaceuticals, could shed non-performing units to boost shareholder value or perhaps become a takeover target itself.

Still, Allergan has a market value of $58 billion, making the likelihood of it being acquired somewhat small. The company could regain investors’ faith by doing some smart shopping of its own at a time when rivals are expected to do the same.

Stocks Hedge Funds Are Buying:  Microsoft (MSFT)

Stocks Hedge Funds Are Buying:  Microsoft (MSFT)

Source: Shutterstock

Along with Alphabet, Amazon and Apple, Microsoft Corporation (NASDAQ:MSFT) is a member of the $700 billion club and another hedge fund fave. The stock is up more than 41% over the past year, which is an exciting growth trajectory for a company of Microsoft’s size and age. Speaking of growth, Microsoft has become a venerable tech dividend growth name and yields an admirable (compared to the broader tech space) 1.8%.

Microsoft joins Alphabet and Amazon on Morgan Stanley’s list of 15 prime beneficiaries of the big data era.

“We expect the best performing stocks in the technology sector could broaden from consumer- to enterprise-oriented technology providers, challenging the consensus view and positioning that exists in the market today,” according to Morgan Stanley.

Buffett just went all-in on THIS new asset. Will you?
Buffett could see this new asset run 2,524% in 2018. And he's not the only one... Mark Cuban says "it's the most exciting thing I've ever seen." Mark Zuckerberg threw down $19 billion to get a piece... Bill Gates wagered $26 billion trying to control it...
What is it?
It's not gold, crypto or any mainstream investment. But these mega-billionaires have bet the farm it's about to be the most valuable asset on Earth. Wall Street and the financial media have no clue what's about to happen...And if you act fast, you could earn as much as 2,524% before the year is up.
Click here to find out what it is.

Source: Investor Place 

Spotify Technology SA’s First Hardware Release Could Be In-Car Player

Source: Spotify

Several days ago, Spotify Technology SA (NYSE:SPOT) sent an invitation to media for an April 24th event. No clues as to what is on the itinerary, other than a vague “news announcement.”

However, the company had earlier sent some of its customers an offer for an in-car Spotify player –apparently by mistake, as the offers quickly disappeared. Given that hint and Spotify’s rumored interest in hardware, there’s a good chance that the Spotify event will be to announce this device.

Given that SPOT stock just started trading last week, the event coming so soon after could have a significant impact.

Spotify’s Hardware Ambitions

Spotify remains the world’s biggest music streaming service. That position has ensured that most smart speakers — with the notable exception of Apple Inc.’s (NASDAQ:AAPL) HomePod — support the service. Each of these are, in effect, a Spotify player, but they are also one firmware update away from losing that support.

However, the company is clearly not content to rely on third party hardware. In February, job postings revealed that Spotify hardware was in the pipeline. Given the huge growth of the smart speaker market, and the involvement of so many tech companies (many of which also operate their own competing streaming music services), Spotify’s interest wasn’t unexpected.

In-Car Spotify Player Leaked

Another hint about what the company was up to also arrived in February, when a number of Spotify customers received an offer from the company. It showed a round device with an LED ring, several physical controls and it was clearly mounted on a dashboard. An in-car Spotify player.

According to The Verge, the offer of an in-car Spotify player went out to multiple subscribers. And there were variations. For some, the Spotify hardware was offered as part of a $12.99 subscription; for others, it was $14.99 per month. On some, the device offered a cellular connectivity option. Some customers were told it supported Amazon.com, Inc.’s(NASDAQ:AMZN) Alexa voice assistant.

The two things all of these occurrences had in common were that the hardware was clearly an in-car Spotify player, and the offers quickly disappeared.

April 24th Spotify Event

That brings us to the mysterious April 24 Spotify event. What news would the company be releasing that is important enough to justify summoning journalists to New York?

Spotify hardware seems like a safe bet. But the clues from February could be pointing to that in-car Spotify player instead of a smart speaker. And that would make sense from a strategic viewpoint as well. The smart speaker market is huge and growing rapidly, but it is dominated by Amazon. Trying to break in can be risky if everything is not perfect.

Apple’s HomePod is a good example of how your own streaming music service, a big name and quality hardware are no guarantee of making a big splash. Having a Spotify smart speaker debut and possibly flop would not be good news for SPOT stock.

The one place those smart speakers aren’t located, though, is in cars. Spotify listeners spend a lot of time in their cars, and while some newer models may include a system like Apple’s CarPlay, the majority of listeners are probably relying on a smartphone connected to the car stereo using Bluetooth to stream music. There’s an opportunity for Spotify to grab a leadership position by releasing a standalone in-car Spotify player that would let its customers stream music without having to use their smartphones.

It could possibly even boost its subscriber base — especially with those offers that were trialed that added a few dollars to a monthly Spotify subscription instead of requiring a cash outlay. It doesn’t have the same risk as going head-to-head with the mighty Amazon Echo, but could pave the way for doing so later.

We’ll have to wait until April 24 to find out for certain what the company has planned. But an in-car Spotify player seems like a leading contender at this point. And the entry into hardware — especially a market where competition isn’t as fierce as the living room — could have significant upside for SPOT stock.

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Source: Investors Place

The Hidden Beneficiary of the Electric Car Revolution

Ask the average investor the biggest beneficiary of the move around the world toward electric vehicles and the likely answer will be Tesla (Nasdaq: TSLA). I only wish I could press a very loud buzzer informing them they are wrong. Tesla is just one ‘horse’ in a very crowded field of automakers.

I know that you know better, or else you wouldn’t be reading this right now. Surging demand for the technology metals that I bring to your attention promises to overturn the balance of power between mining companies and their customers. So says the billionaire mining entrepreneur and legend Robert Friedland that I introduced to you in the very first issue of Growth Stock Confidential.

I am total agreement with Friedland… electric vehicles are an extremely good long-term growth story for both the technology and industrial metals.

However, that doesn’t mean there still aren’t overlooked winners, hiding in plain sight that will be among the beneficiaries of the electric car revolution. Here’s a clue from an Elon Musk quote, “Our lithium-ion batteries should be called nickel-graphite.”

Yes, the industrial metal nickel is poised to be a big winner in the electric car revolution. Most people think nickel is just used in the making of stainless steel. But there is one particular form of nickel (more on that later) though that is crucial to the lithium-ion batteries that power electric cars.

Related: 3 Electric Car Winners That Don’t Sell Electric Cars… Or Batteries Either

And while stainless steel still accounts for 85% of nickel consumption and batteries only 3%, demand from battery makers for nickel this year has soared 44% this year. Demand from battery makers is where nickel’s future growth will come from.

Nickel and Electric Cars

Nickel has been a terrible investment for the past few years, as it has been weighed down by excess mine supplies and bulging inventories. Nickel collapsed from its high in 2007 of $51,600 a ton to around $8,000 a ton in 2015. Just look at this 15-year chart.

This is all about to change and in a major way, thanks to electric vehicles. We are already seeing hints of this as in early November nickel had rallied to a two-year high.

The excitement is building for nickel among metals industry insiders. In fact, the biggest buzz at this year’s annual LME (London Metal Exchange) week in London in early October was surrounding stodgy nickel. It emerging as one of the favored ways to play the electric vehicle supply chain. The expectation is that nickel-manganese-cobalt batteries may gain a lot of market share because of their ability to allow motorists to drive further on a single charge.

Among the topics at the conference was a very conservative forecast for the number of electric vehicles on the road by 2025 is 14.2 million from the consultancy Wood Mackenzie. In 2016, there were 2.4 million electric vehicles on the road.

If this happens, Wood Mackenzie forecasts that demand from the auto industry will rise from 40,000 metric tons in 2016 to 220,000 tons in 2025. The global nickel market is only 2.1 million tons in size. And when you consider other components needed by electric cars outside of the battery, the Wood Mackenzie figure climbs to 275,000 tons – 12% of global supply.

This is an eye-opening in the light of the fact that nickel inventories are finally shrinking. Most of that is due to high demand coming from China. Estimates are that demand there is up 3.8% to 1.1 million tons through the first 10 months of 2017.

Analysts at the investment bank UBS say that there will be a 71,000 ton deficit this year, while others say the nickel deficit is as high as 150,000 tons. Whatever the correct amount of the deficit is, one thing is certain – it is eating into the amount of inventory overhang.

Mining companies will just be able to crank up the amount of nickel they mine, so it’s no problem, right? That’s what some Wall Street analysts say that really don’t know what they’re talking about.

Nickel Sulphate

You see, the majority of nickel production coming onstream through 2025 is of the low-quality variety – ferronickel or nickel pig iron. Both of which cannot supply the much-needed nickel sulphate for electric car batteries.

Nickel sulphate is produced by dissolving pure high-grade nickel metal, called Class 1, in sulphuric acid. That is why nickel sulphate prices this year have traded at a premium of up to 35% over the LME price of nickel.

To bring home the point about the importance of nickel sulphate, I turned to one of the many contacts I have in the technology metals industry, Simon Moores. He founded Benchmark Mineral Intelligence in the U.K. a few years as a source of information on the technology metals markets. He and his firm have quickly become the source for such information for Bloomberg, CNBC, and all the other financial media outlets.

When I asked him about the importance of nickel sulfate, Simon wanted me to pass this on to you:

“Nickel sulphate is the second largest input into a cathode after lithium and is set to become even more important with the advent of high nickel lower cobalt containing chemistries. While nickel is mined in the millions of tonnes, only 75,000 tonnes of nickel chemical was consumed in batteries in 2016. The industry will need to restructure to produce anywhere from four to five times this in the next seven years to meet lithium ion battery demand. We expect 2018 to be the year major nickel metal suppliers start enacting this battery pivot to their business models.”

Other experts are pretty much in agreement in agreement with Simon…

The chief economist at commodities trading firm Trafigura, Saad Rahim, told Bloomberg that demand for nickel sulfate will soar 50% to 3 million metric tons by 2030. Portfolio member Glencore is largely in agreement – it forecast a need to boost nickel output by 1.2 million tons by 2030 in order to meet demand. That is more than half of current global production.

And keep in mind that most of this increase in nickel output needs to be of the high-quality ore.

That demand for higher-grade ores is already being reflected in the marketplace. The spread between high-grade and low-grade iron ore has widened to more than $20 a ton this year, from only $5 to $8 a ton 18 months ago.

The consultancy McKinsey was quoted in the Financial Times as saying, “The global nickel industry may enter a period of change driven by a shift in end-use demand and the emergence of two distant markets.”

Since only about half the world’s nickel is suitable for batteries, we need to stock to that part of the nickel market with our investment selection. And we want to stick with the major players, not some speculative exploration company.

That leaves us with the two largest nickel miners in the world – Russia’s Norilsk Nickel (OTC: NILSY) and Brazil’s Vale SA (NYSE: VALE). You may recall that Vale got into nickel in a big way when it purchased Canada’s Inco in 2006 for C$19 billion.

Vale SA – the Broad Picture

While there are political and geopolitical concerns with both countries, I’m opting for the slightly safer choice and going with Vale. In addition to being a powerhouse in nickel, Vale is the world’s largest producer of iron ore, most of which is of the highest quality.

But like its Brazilian peers, Vale was a company in a lot of trouble, not only because of falling commodity prices, but also because of direct interference in its operations from the prior Dilma Rousseff (who was impeached) government.

The first step out of the wilderness was taken by Vale in March when it named 63-year old Fabio Schvartsman as its new CEO. He is a commodities industry veteran, having run companies for four decades, with the latest being Brazilian paper giant Klabin.

In late June, the first phase of a restructuring plan to reduce government influence was put into place. As part of that process, the plan is to list Vale on Brazil’s Novo Mercado, which has higher corporate governance requirements.

But most importantly, Schvartsman is tackling the company’s debt problem. Vale’s debt hit a peak of $25 billion – a lot for a company with a market capitalization of less than $60 billion. He is targeting a halving of Vale’s current debt of about $21.1 billion to less than $10 billion in order to become a “results-orientated” company. Net debt at the end of the third quarter of 2017 came in at $21.066 million, down 18.9% year-over-year.

Schvartsman is also ‘running the slide rule’ over all projects. For example, he is looking for a partner to invest in one of the world’s biggest nickel mines, which is located on the remote South Pacific island of New Caledonia. Discussions are underway with a number of possible Chinese partners that are in the battery industry. If he doesn’t fund a partner, Schvartsman will shutter the mine.

Vale SA – the Numbers

Now let me show you a closer at Vale’s numbers.

The majority of its business – about 75% – is centered around iron ore. Vale operates two world-class integrated systems (the Northern System and the Southern System) in Brazil for mining and distributing iron ore, which consists of mines, railroads, port and terminal facilities.

But roughly 20% (and growing) of Vale’s business consists of non-ferrous metals like nickel and copper (it is Brazil’s biggest producer). It is also the country’s sole producer of potash and the world’s third largest producer of kaolin (a clay industrial mineral).

The remaining 5% or so are scattered around assets like coal. In a presentation to shareholders in November, Vale said it will unload $1.5 billion worth of non-core assets from 2018 to 2020.

The rally in metals prices in 2017 (iron ore is soaring again in China) gave a huge boost to the efforts of Schvartsman to turn the company around. Just look at Vale’s latest results…

I fully expect these positives will continue to boost the company’s results in the quarters ahead. And once you add in the promise of an electric vehicle future for nickel, Vale should make a nice addition to any wealth creation portfolio.

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Source: Investors Alley 

7 Best Platform Stocks to Buy Now

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What are platform stocks? Which are the best platform stocks to buy and how can they make you rich?

Uber is a platform business. So is Airbnb. At its core, a platform businesses connect consumers of products and services with producers of those products and services through a marketplace created and managed by the platform company.

The general idea is to build something so useful that you create a platform that turns into a quasi-monopoly.

CEO Alex Moazed of Platform consultant Applico defines a platform company as follows:

Successful platforms facilitate exchanges by reducing transaction costs and/or by enabling externalized innovation. With the advent of connected technology, these ecosystems enable platforms to scale in ways that traditional businesses cannot.”

Moazed points out that S&P 500 pure-play platform businesses are valued at an average of 8.9 times revenue, significantly higher than traditional companies at 2-4 times sales.

It’s this reality that makes the Applico Platform Index (API) — a group of 27 platform companies that each have a market cap higher than $2 billion — so successful.

Over the past ten years, the API generated an annualized total return of 15.6%, 510 basis points higher than the tech-heavy NASDAQ, and a testament to the success of platform businesses.

Here are the 7 best platform stocks to buy right now.

7 Platform Stocks to Buy: Ritchie Bros. (RBA)

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Before I get into the more obvious platform stocks, I thought I’d go with a couple of index constituents that most investors wouldn’t name when rattling off platform companies.

Ritchie Bros. Auctioneers Inc (NYSE:RBA) is a Canadian company that got its start in the auction business in 1958 and has grown to annual revenues of $611 million by bringing buyers and sellers together to carry out transactions. In 2017, RBA transacted $4.5 billion in business by connecting these buyers and sellers, online and in person.

In the company’s fourth quarter, it saw revenues increase by 22% to $178.8 million as a result of its May 2017 acquisition for $777 million of IronPlanet, a California company that specializes in the sale of used heavy construction equipment.

On March 27, it launched Marketplace-E, a user-friendly digital platform that will make it easier for businesses to dispose of their assets.

Up 7.4% year to date through April 4, Ritchie Bros. platform solutions should continue to grow the business for years to come.

7 Platform Stocks to Buy: American Express (AXP)

American Express stock

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American Express Company (NYSE:AXP), along with Apple Inc. (NASDAQ:AAPL), were the APIs first two platform companies back in 1984, the date of the index’s inception.

American Express qualifies as a platform company because it operates a closed-loop networkwhere it acts as both card issuer and bank cutting out the middleman.

Additionally, AXP launched Serve in 2011, a platform that enabled its customers to make person-to-person payments using their phone. In 2017, American Express announced that it was selling the U.S. distribution rights and technology of its prepaid reloadable and gift card products — including Serve —  to InComm Holdings.

The platform technology was useful to AXP’s prepaid business. But it turns out the low-end customer didn’t generate enough revenue for it to keep distributing the Serve prepaid cards.

2017 was a transformative year for American Express for two reasons.

First, Ken Chenault retired as CEO of the company in October after 16 years in the job, passing the reins to Stephen Squeri. Secondly, it grew its business at a nice pace over the past year. Highlights include growing the total number of cards in force by 2.9 million and increasing the number of cardmember loans by 12% while adding 1.5 million new merchant locations.

All of that added up to total revenues of $33.5 billion and $7.4 billion in pretax income. Both numbers decent, if not spectacular results. As it continues to work on generating more revenue from each cardholder, I’d expect both the top- and bottom-line to improve in 2018 and beyond.

7 Platform Stocks to Buy: Apple (AAPL)

How Apple Inc. (AAPL) Stock Could Benefit by Being More Like IBM

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Apple is the other original platform stock in the index. It operates a number of different platforms that connect the Apple user to the iOS ecosystem. If you own an iPhone, you know what I’m talking about. Whether it be the App Store, iTunes, Apple Music, iCloud or any of its other services, Apple products are tied into all of these.

I’ve recently considered buying a laptop. Most likely, I’ll buy an Apple product because of the iOS platform. It might be more expensive, but already owning an iPhone and iPad mini, I’m committed to it.

To get me off the Apple platforms the company either has to mess up the ecosystem and products colossally, or the competition delivers something so unbelievably useful I want to switch.

Personally, I don’t think either of those is going to happen. I’m not saying the competition is bad; just that they’re not lights out great. Tim Cook’s job is to deliver new products that are solid, if not spectacular, to feed the platforms, which continue to grow by double digits in terms of revenue.

People like myself will always be okay with just good, and that’s why Apple has the highest market cap in the world. Of all the platform stocks to buy, Apple is the one I’d recommend to buy-and-hold investors.

7 Platform Stocks to Buy: Microsoft (MSFT)

You can’t include Apple in a discussion about platform stocks without also talking about Microsoft Corporation (NASDAQ:MSFT). When it comes to platforms, they’re tied at the hip.

With Microsoft’s cloud and AI initiatives taking center stage at the company, the original Windows platform is looking like a tiny fraction of its overall business. It’s still an essential component through Office 365, but less so than a decade or even five years ago.

Microsoft just announced that it’s spending $5 billion over the next four years on the Internet of Things (IoT) devices. The key to any good platform is the level of connectedness it provides its customers and Microsoft knows it.

In an April 4 blog post, Microsoft Corporate Vice President Julia White  wrote .

“Microsoft’s IoT offerings today include what businesses need to get started, ranging from operating systems for devices, cloud services to control and secure them, advanced analytics to gain insights, and business applications to enable intelligent action. We’ve seen great traction with customers and partners who continue to come up with new ideas and execute them on our platform.”

7 Platform Stocks to Buy: Redfin (RDFN)

Redfin (RDFN)

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In November 2013, I recommended Zillow Group Inc (NASDAQ:ZG), suggesting “if you want to make a lot of money in 3 to 5 years, buying Zillow stock is a smart move.”

Over the past five years, its stock price has doubled, a good, if not spectacular return. Now considered relatively pricey, I thought I’d turn my attention to another real-estate stock on the index — Redfin Corp (NASDAQ:RDFN).

The company’s business model is simple.

It offers real estate agents a technology-enabled, vertically integrated real estate brokerage. It provides buyers and sellers a better experience for less. According to Redfin’s latest March presentation, if you sell a $500,000 home through them and then buy a $500,000 house through them, you’ll save $12,000 assuming the traditional listing-agent and buying agent fees are both 3%.

Houses sell faster through Redfin and for a better price. It’s technology disruption to the max.

“We expect the competitively compelling value prop and simplicity of the ‘1 percent’ product to resonate with consumers this year and potentially accelerate RDFN share gains,” D.A. Davidson analyst Tom White recently told clients in a note.

A good business always makes or saves people money. Redfin does both making it a winner in my books.

7 Platform Stocks to Buy: Amazon (AMZN)

Amazon Stock Is a Raging Bull You Don’t Want to Mess With!

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Despite President Trump’s assertion that Amazon.com, Inc. (NASDAQ:AMZN) is scamming the Post Office out of billions and cheating the Treasury Department out of significant taxes, it’s hard not to appreciate the platform Jeff Bezos has built since its founding in 1994.

People think Jeff Bezos wants to own online retail. And Amazon certainly has a big chunk of the market — the company generated 44% of the U.S. e-commerce sales in 2017. But that’s just a small part of a bigger picture.

Amazon doesn’t want to own online retail; it wants to own your home — figuratively, not literally.

wrote March 2:

“Costco’s business model allows it to survive on razor-thin margins because of its annual membership. Through Prime, Amazon could do the same. Instead of offering just speakers, video streaming, doorbell cameras and all the other things it sells online, why not provide everything a homeowner (and renter) could need to keep the household functioning.

“Amazon could provide insurance, mortgages, wealth management, travel, legal advice, healthcare insurance (it’s on that), actual healthcare, the list goes on.”

Amazon’s biggest platform is Prime. That single membership will take the company much farther than merely focusing on e-commerce. Soon, Prime members are said to be getting a 10% discount when they shop at Whole Foods.

It’s not about online sales. It’s about total sales to the homeowner or renter. That’s exponentially larger.

7 Platform Stocks to Buy: Alibaba (BABA)

What to Expect From BABA Stock Earnings

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 Amazon is all about the home, but Alibaba Group Holding Ltd (NYSE:BABA) goes at this from a slightly different angle. It wants to provide all the platforms and big data necessary for small businesses to compete and thrive — both in its home country of China and around the world.

I neglected to mention AWS in the section about Amazon, the highly profitable piece of its business that helps businesses compete more effectively. I did so, in part, because I believe AWS got its start to provide the infrastructure necessary for AMZN to be a big player in e-commerce retail and moved beyond its walls when it realized it had more capacity at its data centers than it needed in-house.

Suffice to say, Amazon hasn’t forgotten about its business clients, but I digress.

Last May, I called Ma the next Jeff Bezos. Like Bezos, he wants to reinvent retail by owning the consumer, but he knows he can’t do that without successful small businesses.  So, he’s building the same infrastructure that Amazon has such as the cloud, AI, data analytics, whatever it takes to understand what the consumer wants and needs and get it to them.

Eventually, the two companies could be only dominant global players in the business-to-consumer space. Amazon’s well ahead of Alibaba, but Jack Ma’s closing the gap. The next ten years should be exciting.

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Source: Investors Alley 

The 10 Worst Stocks to Buy for Q2

After a 14-month bull run, the stock market has seen a return in volatility of late — and a few big sell-offs. It’s clearly a more nervous market, and that means investors have to be more careful in choosing what stocks to buy.

That means sticking with quality stocks and avoiding those that can blow a hole in your portfolio. These 10 stocks all continue that level of risk.

In a bull market, in some cases those risks are worth taking. Ahead of what looks like a potentially dangerous second quarter, however, investors should steer clear of these 10 stocks.

Worst Stocks to Buy: Blue Apron (APRN)

Worst Stocks to Buy: Blue Apron (APRN)

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Blue Apron Holdings Inc (NYSE:APRN) has been one of the worst IPOs in recent memory. At $2, APRN stock has lost 80% of its value from its IPO price in June. And bear in mind that the $10 price was well below the original range of $15-$17 per share.

All the way down, APRN has attracted buyers. The stock even posted a short-lived rally in December. But the fact remains that there’s basically no price where Blue Apron stock is cheap enough.

2018 numbers should be better in terms of both profitability and cash flow. But Blue Apron still expects to lose money even at the EBITDA line — and to burn cash. With debt coming due in August 2019, there’s a possibility that APRN could go to zero within eighteen months, as I argued last month.

Even if that worst-case scenario doesn’t play out, there’s little reason to chase APRN at these levels. Q1 results don’t look likely to be notably better, as the company still is working through the addition of a new distribution center in New Jersey. Competition is intense, with Walmart Inc(NYSE:WMT), Kroger Co (NYSE:KR) and even Weight Watchers International, Inc.(NYSE:WTW), among many others, entering the meal kit space.

$2-per-share might sound cheap, but APRN still is valued at nearly $400 million. And with a mid-term path toward zero, there’s no price cheap enough for Blue Apron stock.

Worst Stocks to Buy: Chipotle (CMG)

Worst Stocks to Buy: Chipotle (CMG)

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There is a case to buy Chipotle Mexican Grill, Inc. (NYSE:CMG) at these levels. The impact of the company’s food safety issues is receding. A new CEO has sparked optimism, as Luke Lango argued last month. The company expects positive same-restaurant sales in 2018, and new stores will add to revenue growth.

But I’m not buying CMG, particularly with a quick and steep rebound after a disappointing Q4 earnings report in February. A new CEO can help, but his impact isn’t going to be seen in Q1. The entire restaurant industry looks rather weak, particularly for operators like CMG as opposed to franchisors like McDonald’s Corporation (NYSE:MCD) and Yum! Brands, Inc. (NYSE:YUM).

And CMG already is pricing in quite a bit of turnaround. The stock trades at over 50x 2017 EPS and 38x 2018 consensus. Those are huge multiples for a still-struggling company in this kind of market. And after the past few quarters, I certainly wouldn’t enjoy being long CMG ahead of Q1 earnings this month.

Worst Stocks to Buy: Fossil (FOSL)

Fossil Group Inc (NASDAQ:FOSL) had one of the best first quarters in the entire market. A blowout Q4 report in February sent the stock up a stunning 88% in a single session.

But the optimism seen in February already has started to fade. FOSL stock has pulled back over 20% from post-earnings levels. And a short squeeze no doubt drove at least some of the gains: FOSL was the most heavily-shorted stock in the Russell 3000 ahead of earnings, according to Bloomberg.

There is some good news here. Strength in wearables led to the surprising Q4 results, as it offset weakness in traditional watches. FOSL stock still isn’t that expensive, trading at ~5x FY18 EV/EBITDA guidance and ~13x implied non-GAAP EPS.

Still, long-term challenges persist. Even with the strong Q4, full-year same-store sales still fell 6%. The optimism toward the wearables business may be premature. Apple Inc. (NASDAQ:AAPL) has had some success, but Fitbit Inc (NYSE:FIT) has struggled mightily.

Meanwhile, earnings multiples aren’t out of line for brick-and-mortar retail — and suggest a stabilization in profits. With Fossil still guiding for profits to decline in fiscal 2018, that seems premature. FOSL did squeeze the shorts, but lightning isn’t likely to strike twice in Q2.

Worst Stocks to Buy: Barrick Gold (ABX)

Worst Stocks to Buy: Barrick Gold (ABX)

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Heading into Q2, I can see the case for Barrick Gold Corp (USA) (NYSE:ABX). Barrick was the world’s largest gold producer in 2017. Gold has risen for three straight quarters, and could rise more in Q2. More market volatility, geopolitical tension, or any macro concerns could stoke demand for gold as a “safe haven”. Meanwhile, ABX is bouncing off a multi-year low, and looks cheap at under 17x forward EPS.

But that’s kind of the point. Barrick hasn’t benefited from the recent spike. Gold is up 16% since the beginning of 2017. ABX is down 22%. Gold has risen nearly 50% over the past decade; ABX has declined 72%.

That problem isn’t going to change in 2018. Barrick’s disappointing production guidance helped send Barrick stock to that multi-year low. Goldcorp Inc. (USA) (NYSE:GG) is likely to take Barrick’s crown as the top gold producer. Issues in Zambia and a settlement in Tanzania provide further pressure.

Gold indeed may rise again in Q2 — and ABX may follow. But given the long history here and the slow pace of Barrick’s turnaround make it a poor choice to play a higher gold thesis. Investors would be much better off buying GG, Newmont Mining Corp (NYSE:MEM) — or gold itself.

Worst Stocks to Buy: Deutsche Bank (DB)

The long-running turnaround at Deutsche Bank AG (ADR) (NYSE:DB) simply hasn’t taken. DB shares have bounced off a three-decade low reached in 2016. But a recent sell-off has pushed DB back below $14, with returns even from those lows barely over 20%. In the meantime, fellow investment banks like Goldman Sachs Group Inc (NYSE:GS) and Morgan Stanley (NYSE:MS) have soared.

The case for a long-term turnaround isn’t dead. There is some potential value in Deutsche Bank stock. But it’s highly unlikely investors will enjoy the next couple of months. The company already admitted that planned cost cuts would be delayed. Rumors are swirling around the future of CEO John Cryan — with reports suggesting multiple candidates already have turned the job down.

Deustche Bank looks like a mess, plain and simple. And with speculation likely to swirl throughout the quarter, and further hurt morale and the company’s competitive position, that mess isn’t getting fixed in the next three months.

Worst Stocks to Buy: Walt Disney Co (DIS)

The long-term case for Walt Disney Co (NYSE:DIS) remains up for debate. I remain skeptical toward DIS, largely due to the long-running (and very real) concerns surrounding the key ESPN unit.

The short-term case, however, looks outright bearish. Disney is trying to acquire assets from Twenty-First Century Fox Inc (NASDAQ:FOX, NASDAQ:FOXA) — a deal the market sees as necessary for Disney to build out its content empire. But Comcast Corporation(NASDAQ:CMCSA) is stepping in to bid for Sky PLC (ADR) (OTCMKTS:SKYAY), which Fox itself is trying to buy. And that deal potentially could wind up scuttling the entire Disney-Fox tie-up — or push Disney to up its bid.

There’s going to be a lot of speculation, and a lot of uncertainty, over Disney’s M&A over the next few months. And in this market, that’s probably not going to be a great thing for DIS stock. DIS already fell 6.6% in Q1, and between Fox and what looks like an accelerating trend toward cost-cutting, Q2 would be worse. There is value here, and the company’s new streaming service could drive growth in the future. But until then, and without a lower price, DIS looks likely to at best continue its range-bound trading of the last three years.

Worst Stocks to Buy: Under Armour (UA)

Worst Stocks to Buy: Under Armour (UA)

Source: Shutterstock

Under Armour Inc (NYSE:UAA, NYSE:UA) shareholders have received some good news of late. UAA stock has rallied 43% after hitting a four-year low in November.

But I continue to be skeptical about Under Armour’s prospects, even after a better Q4 result. And there’s a good chance that UAA could revisit the lows in the second quarter.

UAA stock remains dearly valued, at 57x-forward-earnings. Margin pressure continues. Analysts aren’t backing the stock, with the average target price of $14.28, 13% below the current price. Meanwhile, Nike Inc (NYSE:NKE) just posted a strong quarter and projected an inflection point in its North American business — the same business from which Under Armour is trying to take market share.

More broadly, UAA has teased investors before during its long decline from above $50 to under $12. The recent gains look like another head-fake that could reverse after the Q1 report a few weeks from now.

Worst Stocks to Buy: Box

Worst Stocks to Buy: Box

As far as high-growth tech stocks go, Box Inc (NYSE:BOX) doesn’t look that out of line from a valuation standpoint. FY19 (ending January) guidance suggests a 5x EV/revenue multiple. With high-flyers like Workday Inc (NASDAQ:WDAY) and Shopify Inc (NYSE:SHOP), among many others, trading at 8x-10x or higher, Box’s valuation isn’t that onerous.

Still, there’s an awful lot of reason for caution. The recent IPO of Dropbox Inc. (NASDAQ:DBX) could potentially steal investor attention, even though Dropbox is far more consumer-focused than business-centric Box. Q4 earnings in early March sent BOX stock plummeting, but the stock quickly reversed.

BOX stock doesn’t necessarily look like a short — less than 4% of shares outstanding are sold short at the moment — but it does look potentially dangerous ahead entering into Q2. Growth is solid, but not particularly impressive, with guidance suggesting a ~20% increase in FY19. Box isn’t close to profitability. Dropbox could soak up some of the attention and investor enthusiasm for the business model. If the market heads further south, BOX would seem to be a likely loser.

Worst Stocks to Buy: tronc (TRNC)

Newspaper stocks like tronc Inc (NASDAQ:TRNC) actually haven’t done that badly of late. Certainly, they’ve performed better than investors might think given the clear secular pressure on print sales, and the difficulty in monetizing content.

Indeed, TRNC has gained 14% over the last year. Gannett Co Inc (NYSE:GCI) has risen 21%, plus 6% in dividends; New Media Investment Group Inc (NYSE:NEWM) has risen the same amount, with an even larger dividend.

But the gains in the sector seem likely to reverse — and TRNC might be most at risk. Here, too, Q4 earnings disappointed badly. Chairman Michael Ferro recently retired ahead of sexual harassment allegations. The sale of the Los Angeles Times brought in much-needed cash, but profits continue to decline even with tronc spending on additional acquisitions.

There is a case that newspaper companies can be classic “cigar butt” stocks, generating enough cash flow to make even a declining business worth buying. But tronc’s lack of shareholder returns undercuts that case, as does the loss of Ferro, who had driven the company’s strategy. TRNC has performed well of late, but its run may be coming to an end.

Worst Stocks to Buy: General Mills (GIS)

Worst Stocks to Buy: General Mills (GIS)

Source: Shutterstock

Some investors no doubt are going to take a chance on General Mills, Inc. (NYSE:GIS) after the company’s post-earnings plunge last month. GIS trades at a five-year low. It yields 4.3%. It’s a 90-year-old company with well-known brands and a long, profitable history. From a distance, General Mills stock at $45 might look like an opportunity.

However, I don’t think that’s the case, and I think it’s highly likely it gets worse for GIS before it gets better. I wrote after fiscal first-quarter earnings back in September that General Mills had lost investor trust when it came to both revenue and margins. Two quarters later, those problems are only more pressing — and General Mills has proven that it has little in the way of answers.

In a somewhat odd way, GIS is reminiscent of General Electric Company (NYSE:GE). In both cases, bulls focused on the history and the dividend, while glossing over near-term problems and reasonably significant debt levels.

I’m not sure GIS’ trend will be quite as bad as that of GE, which has lost half of its value in less than two years, or that a General Mills dividend cut is on the way. But the case of GE, the underlying problems in the business led to a long, slow decline as investors adjusted to the new reality. That’s a very real risk that a similar process will play out at GIS over the next few months.

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Source: Investors Alley

Getting Light Speed Returns from One of the Best Technology Sectors

One of the best technology sectors right now has nothing to do with Apple, Google, or Facebook. It’s in the area of photonics. In simplest terms, photonics is the science of light.

I want you to think about it for a moment – think about how, since almost the birth of humankind, light and optics have been there. From primitive people’s fires to whale oil lamps to the electric light bulb to lasers – humankind’s progression has been marked by advancements in the harnessing of light.

Fleshing out the definition a bit, photonics is the technology of generating and harnessing light and other forms of radiant energy whose unit is the photon. Photonics involves cutting edge uses of lasers, optics, fiber optics, and electro-optical devices in a wide range of applications.

Photonics has taken its place alongside electronics as a critical and rapidly growing technology of the 21st century. The global photonics market is forecast to be a $720 billion market by 2020, growing at a compound annual growth rate of 35%.

Welcome to the Photonics Century

Photonics-based applications are today used in a wide range of industries from industrial automation to medical diagnostics to scientific research.

Lasers in particular are displacing conventional technologies because they can do many jobs faster, better and more economically. Finding ways to make products more efficiently is an absolute must for today’s manufacturers. That’s why I strongly believe photonics and lasers are a must own sector for you and all my other readers.

One sector where photonics has become crucial is communications. Coherent light beams (lasers) have a high bandwidth and can carry far more information than radio or microwave frequencies. Fiber optics allow light carrying data to be piped through cables, replacing old copper cables: an absolute necessity in today’s world of big data, cloud computing and video streaming.

Another way photonics has entered our everyday lives is solid state lighting. Light-emitting diodes (LEDs) are a high performance, low-cost, green alternative to incandescent light bulbs.

Then there is LiDAR (laser radar systems), which is used in the aerospace industry and is crucial for the future success of autonomous vehicles, those self-driving cars that are frequently in the news these days.

Photonics technology has become ubiquitous.

Photonics has also become a key component in many manufacturing processes. Think laser welding, drilling and cutting as well as all the precision measurements needed by manufacturers that is provided by lasers.

Lasers Evolution

That leads directly to my recommendation – IPG Photonics (Nasdaq: IPGP), a leading developer and manufacturer of high-performance fiber & diode lasers and amplifiers for a vast range of industries and applications. Its products are used in industries such as materials processing, communications, medical and biotechnology, science and entertainment. IPG Photonics has been in the Growth Stock Advisor portfolio since late last summer and it’s up nearly 60% for us and a wide path in front of it.

The evolution of lasers in manufacturing is a journey of over half a century. Its ready adoption by manufacturers is largely due to the fact that lasers convert common sources of energy into concentrated, directed beams of energy. To do this, a laser must have an energy source, a way of coupling that energy into the laser cavity, and a method of delivering the resulting laser beam to the workpiece.

The new fiber lasers developed by IPG are vastly superior to the old legacy industrial lasers in every facet of the process:

  • Energy Source: Instead of using energy sources like lamps or even chemical reactions, fiber lasers use long-lived semiconductor diode lasers that efficiently convert electricity into light. Not only is the energy conversion efficiency raised, but frequent servicing and sometimes environmentally-unfriendly consumables are eliminated.
  • Energy Coupling: Conventional laser optical cavities have bulky air or gas-filled spaces. Large cavities are necessary due to the inefficiency of gas lasing or the need to insert bulk optical elements within the cavity. Fiber lasers are very compact because they convert semiconductor diode energy into useful laser beams within a fiber no thicker than a human hair.
  • Laser Beam Delivery: Legacy lasers utilize complex optics to extract the laser beam and deliver it to the workpiece. External steering optics are often needed to deflect the laser output onto its target. In contrast, flexible optical fiber provides a built-in, ideal beam delivery system.
  • Mass Production Possible: Both key fiber laser elements – semiconductor diodes and optical fiber – can easily be mass produced. Quite a contrast from legacy lasers with their bulky hermetic laser cavities, their need for precision optical alignments and ultra-flat optical surfaces.

The change is, as the company says, akin to the replacement of vacuum tubes by transistors.

IPG offers, I believe, the best-in-class laser-based systems for high-precision welding, cutting, marking, drilling, cladding, and other processing of metal, ceramic, semiconductor and thin films for customers in automotive, aerospace, railway, energy, electronics, consumer and other industries.

Its range of laser products includes ytterbium, erbium, thulium as well as Raman and hybrid fiber-crystal lasers. All wattage ranges are there too: low (1 to 99 watts), medium (100 to 999 watts) and high (1,000+ watts) output power lasers in wavelengths from 0.3 to 4.5 microns. The lasers can be continuous wave (CW), quasi-continuous wave (QCW) or pulsed. The pulsed lasers are available in nanosecond, picosecond and femtosecond ranges.

Among the well-known companies using IPG products are: Boeing (NYSE: BA)Lockheed Martin (NYSE: LMT)KLA-Tencor (Nasdaq: KLAC)Toyota Motor (NYSE: TM)BMW AG (OTC: BMWYY) and Mitsubishi Electric (OTC: MIELY).

Additionally, the company recently purchased Innovative Laser Technologies (ILT). This firm has a proven track record producing leading-edge systems for medical device manufacturers, one of the fastest growing markets for fine welding and cutting applications. This will greatly aid IPG in its effort to penetrate the market for medical device applications.

Last May, IPG bought Menara Networks, which is an innovator in optical transmission modules and systems. This allows IPG to offer more integrated solutions for the telecommunications industry. In the first quarter of 2017, sales of its telecom products soared by 221% thanks to Menara.

IPG Growing Rapidly

Although both North American and European sales grew 20% in the quarter year-over-year fully 64% of IPG Photonics revenues come from the Asia-Pacific region, with another 25% coming from Europe, including Russia. Only 10.5% of its revenues come from North America.

China continues to be a driver of growth with year over year sales growth of 47% for the region and representing nearly 44% of total sales for the firm.

IPG Photonics Corporation reported Q4 2017 adjusted earnings of $1.86 per share beating the top end of estimates by $0.06. The figure was better than the guided range of $1.55-$1.80.

Management expects sales to come in a range of $330 to $355 million for the first quarter. Earnings are estimated for $1.62 to $1.87.

IPG’s Laser-Bright Future

Thanks to innovative product portfolio – last summer IPG unveiled the first 120 kilowatt industrial fiber laser – and large patent portfolio, I expect IPG Photonics to continue to outpace the other companies in the laser systems and components sector.

Another huge advantage over the competition is its vertically integrated business model, which allows it to control each and every part of its business from research and development to sales to after sales service. In this type of business, I want the company to continue to innovate.

So a purchase like that of OptiGrate, which help IPG develop new ultra-fast pulsed lasers, is what I want to see. I like the fact that IPG is moving into new end markets connected to 3D printing, defense electronics and micro-materials processing in addition to the aforementioned communications and medical sectors. This will only add to the momentum from trends such as the miniaturization of electronics and the move of the global auto industry toward the widespread adoption of fiber lasers.

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Crypto Infrastructure Build Continues Despite Pullback

Despite the recent pullback in crypto prices, amazing things are happening behind the scenes.

Blockchain entrepreneurs and coders are hard at work building the infrastructure necessary for a robust alternative financial system.

Today, we’re going to analyze important recent news items and breakthroughs.

Bitcoin currently maxes out at around seven transactions per second. The Lightning Network (LN) allows it to increase to thousands of transactions per second, with near-instant settlement. LN accomplishes this by taking transactions off the blockchain and settling them later in bulk.

This tech may allow bitcoin to compete with traditional payment processors such as Visa and PayPal. It will take time to perfect this new payment network, but LN has the potential to revolutionize how cryptocurrency is used. Many other coins have announced plans to build similar improvements.

Binance launched only last year, but it has become the highest-volume crypto exchange in the world, with trading volume of around $1.5 billion per day. Currently based in Hong Kong, Binance recently announced that it will be moving to Malta. The small Mediterranean island has crypto- and fintech-friendly laws.

Malta’s prime minister even personally welcomed Binance to Malta on Twitter.

Binance says the move will also allow it to add “fiat trading” to its platform by partnering with local banks. Currently, Binance is a “crypto only” exchange, but the addition of fiat trading will allow it to become a major on-ramp into the crypto market.

Cboe Global Markets, which trades bitcoin futures, sent a letter to the SEC encouraging it to allow the introduction of bitcoin ETFs.

At least six companies are attempting to get bitcoin funds approved, but so far the SEC has denied their applications.

The demand for a publicly traded bitcoin vehicle is certainly there, but the SEC has been twiddling its thumbs for a while now. Let’s see how long it can hold out against the pressure.

Adding ERC20 Support to Coinbase

Coinbase, the largest U.S. crypto exchange, has announced that it will be adding support for ERC20 tokens. In a blog post, Coinbase wrote, “This paves the way for supporting ERC20 assets across Coinbase products in the future, though we aren’t announcing support for any specific assets or features at this time.”

In essence, this means that Coinbase is planning to add more altcoins to its platform. This will drive more interest and altcoin buying. Now the speculation about which assets Coinbase will add next begins…

Bitfinex Announces Addition of New Fiat Pairs; Adds Support for British Pounds & Japanese Yen

Exchanges continue to offer new trading “pairs” in fiat currencies (dollar, euro, yen, etc.). Major player Bitfinex just added new fiat trading pairs for EOS, NEO, IOTA, bitcoin and Ethereum.

Fiat trading pairs are how money enters the crypto world, and it’s not easy to accomplish due to anti-money-laundering laws. More fiat trading pairs means more money entering the system.

Good investing,

Adam Sharp
Co-Founder, Early Investing

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The 6 Most Inexpensive Growth Stocks to Buy Now

Source: Shutterstock

In Warren Buffett’s 1992 letter to Berkshire Hathaway Inc. (NYSE:BRK.B) shareholders, Buffett touches upon a subject at odds with much of the investment industry:

“Most analysts feel they must choose between two approaches customarily thought to be in opposition: ‘value’ and ‘growth.’ Indeed, many investment professionals see any mixing of the two terms as a form of intellectual cross-dressing.

We view that as fuzzy thinking… In our opinion, the two approaches are joined at the hip: Growth is always a component in the calculation of value, constituting a variable whose importance can range from negligible to enormous and whose impact can be negative as well as positive.”

Many investors tend to categorize stocks into value and growth. However, the most successful investors view growth as simply one component of a company’s value as Mr. Buffett explains.

The future outlook for a company is an important aspect when you’re looking at buying a stock. And while value investors would argue that it’s the intrinsic value relative to the current trading price that matters the most, a more compelling investment thesis would be high growth potential at a cheap price.

Therefore, I used finbox.io’s stock screener to see if I could find high growth stocks trading below their intrinsic value.

Screening for Inexpensive Growth Stocks

The following are all the filters applied in this growth at a reasonable price stock screen:

The six stocks that stood out from the screen above are presented below.

Inexpensive Growth Stocks to Buy Now: Oasis Petroleum (OAS)

Oasis Petroleum Inc. (NYSE:OAS) is an exploration and production company.

The company’s total revenue stands at $1,248 million as of fiscal year ending December 2017. This is 81.8% higher than the $687 million achieved in fiscal year December 2012 and represents a five-year compounded annual growth rate (CAGR) of 12.7%.

Source: finbox.io

Analysts forecast that Oasis Petroleum’s total revenue will reach $3,012 million by fiscal year 2022 representing a five-year CAGR of 19.3%.

Source: finbox.io

Shares of the company are down -38.8% over the last year while the stock last traded at $8.00 as of Tuesday, March 20th. Three separate valuation analyses imply that there is 34.7% upside relative to its current trading price. Wall Street’s price target of $12.43 per share implies even further upside.

It’s also worth noting that illustrious money manager T Boone Pickens currently owns 331,541 shares of OAS which represents 1.0% of his stock portfolio. T. Boone Pickens is a legend in the American energy industry and has been labeled anywhere from a ‘wildcatter’ to a corporate raider. He clearly expects outsized returns from his investment in OAS.

Inexpensive Growth Stocks to Buy Now: Spirit Airlines (SAVE)

Spirit Airlines Incorporated (NYSE:SAVE) is a low-fare airline operating in North America.

The airline’s total revenue stands at $2,648 million as of fiscal year ending December 2017. This is 100.8% higher than the $1,318 million achieved in fiscal year December 2012. In addition, Spirit’s revenue growth has been fairly stable ranging from 8.4% to 25.5% over the last five years.

Source: finbox.io

Going forward, Wall Street is forecasting that Spirit’s total revenue will reach $4,508 million by fiscal year 2022 representing a five-year CAGR of 11.2%.

Source: finbox.io

Shares of Spirit Airlines are down -13.0% over the last year and finbox.io’s fair value estimate of $62.66 per share calculated from six cash flow models imply 41.1% upside. The average price target from 15 Wall Street analysts of $52.47 per share similarly imply upside.

Inexpensive Growth Stocks to Buy Now: Euronet (EEFT)

Euronet Worldwide, Inc. (NASDAQ:EEFT) provides electronic payment services to financial institutions and retailers worldwide.

The company’s total revenue stands at $2,252 million as of fiscal year ending December 2017. This is 77.7% higher than the $1,268 million achieved in fiscal year December 2012 and represents a five-year CAGR of 12.2%. Euronet Worldwide’s revenue growth has also steadily ranged from 6.5% to 17.8% over the last five fiscal years.

Source: finbox.io

Analysts are estimating that Euronet Worldwide’s total revenue will reach $3,869 million by fiscal year 2022 representing a five-year CAGR of 11.4%.

Applying these assumptions to 8 valuation models imply nice upside for shareholders.

Source: finbox.io

Euronet Worldwide’s stock currently trades at $86.43 per share as of Tuesday, up only 2.8% over the last year. However, finbox.io’s intrinsic value estimate suggests that shares could increase 34.1% going forward.

Furthermore, Joel Greenblatt is a notable investor in the company. His fund currently holds a position worth $9.0 million. Greenblatt is best known for a very specific style of value investing termed: Magic Formula Investing. The company clearly has the fundamental characteristics that make it a perfect fit within his magic formula.

Inexpensive Growth Stocks to Buy Now: Centene (CNC)

Centene Corp (NYSE:CNC) is a multi-national healthcare enterprise that acts as an intermediary between government and private health insurance programs.

The company’s total revenue stands at $48.3 billion as of its latest fiscal year. This is nearly 5x higher than the $8.1 billion achieved five years prior.

Source: finbox.io

Going forward, analysts are forecasting that Centene’s total revenue will reach $87.9 billion by fiscal year 2022 representing a five-year CAGR of 12.7%.

Source: finbox.io

Shares of the company are trading 54.2% higher year over year. But the stock price could end up trading another 31.6% higher in 2018 based on Centene’s future cash flow projections.

It’s worth noting that highly followed portfolio manager David Tepper currently holds a position in Centene worth $76.5 million. Tepper, founder and portfolio manager at Appaloosa Management, is widely known for having inspired what’s been dubbed the Tepper Rally of 2010. Through his macro view of the financial markets, Tepper was able to predict not only the stock market rally but the catalysts behind it which ultimately proved to be the Fed’s stimulus. Whatever the catalyst, Tepper is likely expecting a sizable rally in Centene’s stock price.

Inexpensive Growth Stocks to Buy Now: Equinix (EQIX)

Equinix Inc (NASDAQ:EQIX) connects businesses to their customers, employees and partners via data centers.

The company’s top-line reached $4,368 million as of its latest fiscal year, up 131.5% from fiscal year December 2012. Over that time period, Equinix’s revenue growth has ranged from 11.5% to 32.5%.

Source: finbox.io

Wall Street analysts estimate that Equinix’s total revenue will continue to grow at an annual rate of 10.1% over the next five years.

Source: finbox.io

Equinix’s stock currently trades at $414.48 per share as of Tuesday, up 9.4% over the last year. On a fundamental basis, the company’s stock is trading at a 7.0% discount to finbox.io’s intrinsic value estimate. However, the average price target from 22 Wall Street analysts of $507.23 implies 23.2% upside.

Inexpensive Growth Stocks to Buy Now: II-VI (IIVI)

II-VI, Inc. (NASDAQ:IIVI) is an electronics component manufacturer.

The company’s total revenue reached $972 million as of fiscal year ending June 2017. This is 88.2% higher than the $516 million achieved in fiscal year June 2012. II-VI’s top-line growth has ranged from 6.7% to 24.0% over the last five fiscal years.

Source: finbox.io

Going forward, Wall Street forecasts that II-VI’s total revenue will reach $1,839 million by fiscal year 2022 representing a five-year CAGR of 13.6%.

Source: finbox.io

Shares of the company are up 23.0% over the last year. The stock last traded at $47.25 as of March 20th and 8 separate valuation analyses imply that the stock is trading near its fair value. However, the average price target from nine Wall Street analysts implies 13.0% upside.

Inexpensive Growth Stocks to Buy Now: A Summary

While investors tend to categorize stocks into value and growth, some of the most successful investors view growth as simply one component of a company’s value. The companies above have positioned themselves so that double-digit growth appears to be a reasonable assumption for the foreseeable future. More importantly, this growth actually looks attractive relative to their current trading levels. As such, value and growth investors may want to take a closer look at these names.

In conclusion, the table below ranks all six stocks by their blended upside.

Source: finbox.io

Matt Hogan is a co-founder of finbox.io. His expertise is in investment decision making. Prior to finbox.io, Matt worked for an investment banking group providing fairness opinions in connection to stock acquisitions. He spent much of his time building valuation models to help clients determine an asset’s fair value. He believes that these same valuation models should be used by all investors before buying or selling a stock.

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Source: Investor Place