The Case for Selling a Stock That’s Seen a 72% Boost in Revenue

On the surface, the 72% surge in year-over-year revenue that Snap Inc. (Nasdaq: SNAP) – parent company of camera and video app Snapchat – notched in the fourth quarter is mighty impressive. The total $285.7 million beat expectations by $33 million.

The firm also added 8.9 million new daily active users (DAUs) during the quarter – up 18% year-over-year to 187 million. That beat projections, too. Revenue per user rose 46% year-over-year to $1.53.

Look beyond the numbers, though, and you’ll see an uglier picture (no pun intended).

For starters, the company had to spend big to get that user growth, with sales and marketing costs up 119% and R&D expenses soaring by 260%.

And while Snapchat may be popular with the kids, it ain’t profitable.

The company lost $350 million during the quarter, compared with a $170 million loss in Q4 2016. Operating income also tanked from $169.7 million to $361 million over the same period. Adjusted EBITDA and free cash flow also dropped. In fact, for the full year, Snap’s free cash flow sank by $819.2 million.

You don’t need me to tell you that losses that large are completely unsustainable over the long run.

And as for that strong user growth… well, it’s not as strong as Instagram, which boasted 150 million DAUs in early 2017, but had ballooned the number to 500 million by September.

And speaking of Instagram, Snapchat may have caused itself a problem: Users hate the company’s redesigned app – and it’s pushing some of them to Instagram’s similar features instead.

A petition on received over one million people imploring Snapchat to scrap the new layout – an unusually large number, even for a social media platform.

And as if things could not get any worse for Snap, on Wednesday Kylie Jenner of Kardashian fame wiped out $1.3 billion in market value for Snap as shares plummeted from her short tweet:

“sooo does anyone else not open Snapchat anymore? Or is it just me… ugh this is so sad.”

That’s all it took for the stock to drop 6% in a matter of hours. And this is after it had already been on a downward slide since the beginning of the week. All told investors have lost close to 15% just this week. Ouch.

Snap may be improving its top-line numbers, but the company still isn’t anywhere near profitability. Until it manages to arrest the negative profit and cash flow trends, as well as add new users more cheaply (and not anger its existing base!), it’s an expensive and risky stock to own in a more volatile market.

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.

Source: Investors Alley 

The 10 Best ETFs of February 2018

February was a crazy month for investors; consequently, the landscape of best-performing exchange-traded funds expanded from primarily biotech and emerging-market ETFs in January to several other spaces for this edition of the best ETFs of the month.

In February, the fortitude of those with generally bullish outlooks was tested as the Dow Jones Industrial Average made historic 1,000-plus point drops twice in less than two weeks. Meanwhile, the S&P 500 is down more than 4% on the month.

The turmoil is mostly attributed to anticipation of a rise in interest rates based on expectations of inflation in the months ahead. But outside of these struggles, some ETFs still managed to maintain impressive performances, while others managed to step up and replace old champions.

In no particular order, here are the best ETFs of February, excluding leveraged funds and exchange-traded notes.

Best ETFs of February: ProShares Long Online/Short Stores ETF (CLIX)

Best ETFs of February: ProShares Long Online/Short Stores ETF (CLIX)

Source: Shutterstock

Expense Ratio: 0.65%
YTD Performance: 18% vs 2% for the S&P 500

Among the best ETFs of February were several retail-based ETFs. Notably, the ProShares Long Online/Short Stores ETF (NYSEARCA:CLIX) manged to stand out from the crowd, as it has significantly outperformed the S&P 500 in 2018 so far.

This recently founded ProShares ETF is distinct in that it has a multifaceted strategy that aims to take full advantage of the death of traditional retail while also focusing on the rise of internet retailers. The CLIX achieves this by shorting traditional retail stocks and simultaneously holding online retailers with significant growth. As such, its holdings are constantly varying.

In simplest terms, the long/short approach of this ETF means investors “benefit from both outperforming online and underperforming physical retailers.”

Best ETFs of February: Loncar Cancer Immunotherapy ETF (CNCR)

Best ETFs of February: Loncar Cancer Immunotherapy ETF (CNCR)

Source: Shutterstock

Expense Ratio: 0.79%
YTD Performance: 23%

Last month, the Loncar Cancer Immunotherapy ETF (NASDAQ:CNCR) made it on the list of best-performing ETFs and it continued its success in February with an impressive 20% advantage over the S&P.

For those who are unfamiliar with CNCR, it’s a biotech ETF that emphasizes companies that are involved with cancer research and treatment.

More specifically, CNCR’s holdings must have cancer immunotherapy drugs that are approved by the FDA or EMA, are in human testing stages, are about to enter human testing stages and/or are involved with other companies that focus on immunotherapy. This includes companies like Aduro BioTech Inc (NASDAQ:ADRO) and AstraZeneca plc (ADR) (NYSE:AZN), which are among its top 10 holdings.

Best ETFs of February: Franklin FTSE Brazil ETF (FLBR)

Expense Ratio: 0.19%
YTD Performance: 14%

Although some new names made the list of best ETFs of February, Brazilian emerging market ETFs like Franklin FTSE Brazil ETF (NYSEARCA:FLBR) still performed exceptionally well this month.

The FLBR follows the FTSE Brazil Capped Index, which emphasizes the most notable large- and mid-cap companies in the country. Although investing in emerging markets like Brazil carries significant risks, top holdings like iron producer Vale SA (ADR) (NYSE:VALE) and brewing company Ambev SA (ADR) (NYSE:ABEV) give investors access to tons of growth potential in a less familiar marketplace.

Best ETFs of February: Global X Social Media ETF (SOCL)

Expense Ratio: 0.65%
YTD Performance: 12%

Global X Social Media ETF (NASDAQ:SOCL) does exactly as its name suggests — it gives investors exposure to social media companies from across the world. As such, it isn’t your run-of-the-mill tech ETF. And the fact that it has outpaced the S&P 500 places it among the best ETFs of 2018 so far.

The SOCL ETF does hold U.S. social media names like Twitter Inc (NYSE:TWTR) and Snap Inc(NYSE:SNAP), but it also holds international social media stocks like Russian internet technology company Yandex NV (NASDAQ:YNDX) and Chinese internet-based holding company Tencent Holdings Ltd (OTCMKTS:TCEHY).

Best ETFs of February: iShares MSCI Brazil Capped ETF (EWZ)

Best ETFs of February: iShares MSCI Brazil Capped ETF (EWZ)

Source: Shutterstock

Expense Ratio: 0.62%
YTD Performance: 14%

As with last month, another Brazilian-based ETF — iShares MSCI Brazil Index (ETF)(NYSEARCA:EWZ) — managed to out-do the competition and it remains one of the best ETFs of 2018 so far.

This ETF isn’t significantly different from the FLBR, but as emphasized on last month’s list, EWZ is more focused — it has less holdings — and it has a significantly longer track record of success than relative newcomer FLBR. However, depending on how you look at it, the FLBR could have the upper hand since it has a lower expense ratio at 0.19% compared to the EWZ’s 0.62%.

Ultimately, whichever ETF you focus on, Brazil remains one of the hottest emerging markets out there, and both funds have demonstrated significant staying power in 2018.

Best ETFs of February: Amplify Online Retail ETF (IBUY)

Best ETFs of February: Amplify Online Retail ETF (IBUY)

Source: Shutterstock

Expense Ratio: 0.65%
YTD Performance: 13%

The Amplify Online Retail ETF (NASDAQ:IBUY) is another retail ETF that has managed to beat the competition at the start of the year and become one of the best-performing ETFs.

Unlike the CLIX, the IBUY does not feature a short/long approach; however, it distinguishes itself by focusing on both traditional retail names that are converting to a primarily online format and online e-tailers that should experience significant growth in the years ahead. This gives investors a basket of stocks with known-name brands like Lands’ End, Inc. (NASDAQ:LE) and online up-and-comer Shutterfly, Inc. (NASDAQ:SFLY).

Best ETFs of February: PowerShares NASDAQ Internet ETF (PNQI)

Best ETFs of February: PowerShares NASDAQ Internet ETF (PNQI)

Source: Shutterstock

Expense Ratio: 0.6%
YTD Performance: 15%

Although many biotech ETFs were among the best performing last month, many tech/internet-based ETFs have manged to hold strong through February’s volatility. The PowerShares Exchange-Traded Fund Trust (NASDAQ:PNQI) is no exception, as it has out-paced the S&P 500 by more that 12%.

The PNQI tracks the NASDAQ Internet Index, which contains the “largest and most liquid U.S.-listed companies engaged in internet-related businesses.” In plain English, that means the ETF contains major tech names like Netflix, Inc. (NASDAQ:NFLX), Amazon and Chinese internet search provider Baidu Inc (ADR) (NASDAQ:BIDU).

It might not have countless obscure tech names with mega-ton growth potential, but it does contain many of the top players with more than 90% of its holdings allocated to mostly large-cap stocks that focus on internet software & services and internet & direct marketing retail. This makes it a fairly reliable fund for those who have faith in the consistently strong tech space.

Best ETFs of February:  iShares MSCI Russia Capped ETF (ERUS)

Best ETFs of February:  iShares MSCI Russia Capped ETF (ERUS)

Source: Shutterstock

Expense Ratio: 0.62%
YTD Performance: 13%

Although it didn’t make an appearance on last month’s list, Russia was a notable emerging market in February, as seen in the standout performance in the iShares MSCI iShares MSCI Russia ETF (NYSEARCA:ERUS).

While U.S. stocks were generally struggling to hold their ground, the ERUS manged to gain a 12% lead over the S&P. As with all emerging markets, there is tons of growth potential packed in, but with that comes significant risk. But investors who are willing to look past these risks (as well as the “us versus them” political landscape), might find what they’re looking for in this fund.

The ERUS tracks a wide variety of Russian stocks like financial Sberbank of Russia(OTCMKTS:AKSJF) and gas pipeline operator Gazprom PAO (ADR) (OTCMKTS:OGZPY), most of which are likely unfamiliar to U.S.-based investors.

Best ETFs of February: iShares Latin America 40 ETF (ILF)

Best ETFs of February: iShares Latin America 40 ETF (ILF)

Source: Shutterstock

Expense Ratio: 0.49%
YTD Performance: 12%

As mentioned earlier, several emerging-market ETFs retained their spot on the list of best ETFs for the month, and that includes the iShares S&P Latin America 40 Index (ETF)(NYSEARCA:ILF).

Although several of the ETFs on this list emphasize Brazil, the ILF will be appealing to those looking for generalized exposure to the best that the Latin American marketplace has to offer. There’s still an impressive allocation to Brazilian stocks with this ETF (60%), but other Latin American countries — Mexico (23%) and Chile (12%) — have a significant presence.

As such, its top holdings include companies like Brazilian energy play Petroleo Brasileiro SA Petrobras (ADR) (NYSE:PBR), telcom America Movil SAB de CV (ADR) (NYSE:AMX) and Mexican holding company Fomento Economico Mexicano SAB (ADR) (NYSE:FMX).

Best ETFs of February: KraneShares CSI China Internet ETF (KWEB)

Best ETFs of February: KraneShares CSI China Internet ETF (KWEB)

Source: Shutterstock

Expense Ratio: 0.72%
YTD Performance: 9%

The KraneShares CSI China Internet ETF (NYSEARCA:KWEB) embodies a combination of two trends that the best ETFs of the month followed: it’s an emerging-market ETF with an emphasis on internet-based companies.

Specifically, the KWEB focuses on “China-based companies whose primary business or businesses are in the internet and internet-related sectors.” What that all boils down to is a large sector breakdown in tech (60%) and consumer discretionary (37%) stocks, with the remainder allocated to industrial companies (2.5%).

The fund’s heavy emphasis on Chinese large-cap (55.7%) and mid-cap (35.4%) companies leads to top holdings like the “Chinese Amazon” Alibaba Group Holding Ltd (NYSE:BABA), JD.Com Inc(ADR) (NASDAQ:JD) and Weibo Corp (ADR) (NASDAQ:WB).

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.

Source: Investors Place

How To Make 150% Returns Off Of Higher Interest Rates

After a year of mostly moving higher, with barely any volatility to speak of, we’re finally seeing a shift in the financial markets. It’s not just stocks – bonds, commodities, and currencies are also moving into new territories.

Of course, much of the change is due to the expected change in interest rates and inflation (which are directly linked). It’s been several years since we’ve had any substantial changes in interest rate expectations. The arrival of higher rates is certainly inducing a sea of change to the financial markets.

Now, not every change to the market is going to be as extreme as the selloff we experienced at the beginning of February. The volatility spike was especially nasty (and probably way overdone). But, sometimes it’s a major event like the early February correction which begins a longer-term trend.

The trend in bond prices hasn’t exactly been subtle either, although it’s not as extreme as the move in stocks and volatility. You can see in the chart below of iShares 20+ Year Treasury ETF (NASDAQ: TLT), that long bonds have been in steady decline since the start of the year.

Keep in mind, bond prices and interest rates move inversely. So, if rates are expected to continue going up, then bond prices should also continue selling off. Subsequently, some big traders apparently think bond prices have a lot farther to fall. There’s been a lot of big options action in TLT this past week.

In one trade, a buyer grabbed 15,000 March 16th 115 TLT puts for $0.62 with the stock just above $117. That’s a $930,000 bet that TLT will drop to at least $114.38 by March expiration. In another similar trade, the trader bought 10,000 March 16th 116 puts for $0.84. That works out to $840,000 in premium with a breakeven point of $115.16.

Those are just a couple of the trades I saw betting on TLT’s downside. Clearly, there’s a lot of money being spent on a potential big down move in bond prices.

Given what we’ve seen with CPI data, employment numbers, and corporate results, I tend to agree that bonds are going to keep going down (while interest rates go higher). I also think TLT is one of the cheaper ways to bet on higher interest rates.

However, I wouldn’t necessarily purchase naked puts in TLT either. You can save some decent premium costs by using put spreads as an alternative. For instance, the March 16th 115-117 put spread (buying the 117 puts while selling the 115 puts) only costs $0.80, with TLT stock just over $117.

Your breakeven on this trade is $116.20, while your max gain is $1.20. For only $0.80 you can potentially earn 150% returns if TLT keeps moving down. It’s a smart way to bet on higher interest rates without spending a ton of cash.

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Source: Investors Alley 

5 REITs with a Long History of Double Digit Dividend Increases

The last six weeks have shown that trying to guess the direction of share prices is a tough way to make money in the stock market. The previous two years made it look easy to generate great profits in the market. The reality is that the stock market is much more likely to be like the last two months. If you are a long-term investor with the goal of building wealth and income to support a comfortable future, you need a plan that is not based on guessing and chasing stock prices.

Income and total return focused investors have a powerful mathematical tool that few realize exists. The math is what happens between stock yield and dividend growth. Here is how it works. If a company increases its dividend, for the stock yield to stay the same, the share price must increase by the same percentage as the percentage increase of the dividend boost. Let me demonstrate with an example.

A stock yields 5% and the dividend is increased by 5%. The new yield is then 5.25%. For the stock to stay at a 5% yield, the share price must move up by the same 5%. The result is a 5% dividend income plus a 5% share price gain for a 10% total return. In the short to intermediate term, this share price to dividend growth relationship is not apparent. Too many short term “news” items pull share prices in this direction and that. Over the long term, history shows that the average annual total returns from quality dividend growth stocks end up very close to the average yield plus the average dividend growth rate.

The relationship works through market corrections and bear markets. The dividend paying stock prices will go down with the rest of the market, but the subsequent recovery will see stock price gains sufficient to bring the relationship back to expectations. An investor can boost the mathematical total return with dividend reinvestment.

The real estate investment trust (REIT) sector is a good place to find stocks with attractive yields and companies that increase dividends every year. I maintain a REIT sector database to track yields and annual dividend increases. I use the database to screen the REIT world for a range of income focused investment strategies.

Here are five stocks that score well on the total return potential of current yield plus dividend growth. The dividend growth rate is for the last 12 months, so as an investor your task is to review each company’s results and make your own analysis whether dividend growth will continue at the same pace, accelerate or slow down.

American Tower Corp (NYSE: AMT) is a large-cap REIT that develops and owns multi-tenant telecommunications real estate – cell phone towers. Over the last 12 months the company has increased its dividend by 20.7% with a dividend hike every quarter. Add the dividend growth rate to AMT’s 2.0% yield and you get 22.7% annual total return potential.

The recent dividend growth is not a fluke. Over the last five years, the company has grown the dividend by an average of 23% per year. The current yield is slightly above the average of 1.78%. The higher yield indicates that AMT may be slightly undervalued based on its market sector and dividend growth.

Hudson Pacific Properties Inc(NYSE:HPP) is focused on acquiring, repositioning, developing and operating office and media and entertainment properties throughout Northern and Southern California and the Pacific Northwest.

The company increased its dividend by 25% over the last 12 months. This continues the company’s record of low to mid-20% dividend growth for the last three years.

The current dividend is just 50% of FFO per share, which gives plenty of room for future dividend increases. HPP yields 3.15%, which is almost 1% above the company’s four-year average yield. This stock has strong potential for 20% plus total annual returns.

CoreSite Realty Corp (NYSE: COR) is one of the small number of data center REITs. The growth in data storage needs is truly on a parabolic trajectory. Data center REITs like CoreSite are experts at acquiring land, developing facilities appropriate for modern data storage server arrays, and providing high-speed Internet connections for companies leasing space in the data center facilities.

Over the last 12 months, CoreSite increased its dividend twice for a total increase of 22.5%. The tech sector needs for ever more data storage points to mid-teens or higher cash flow growth for the data center REITs for many years. COR currently yields 4.1%. Do the math on this stock’s return potential.

Related: 3 High-Yield and High Growth REITs for Value Investors

Equity Lifestyle Properties, Inc. (NYSE: ELS) is an owner and operator of lifestyle-oriented properties (properties) consisting primarily of manufactured home communities and recreational vehicle resorts and campgrounds. Equity Lifestyle owns high-end manufactured home communities located in popular retirement regions. This REIT has been a high dividend growth rate stock, growing the payout by 17% compounded per year over the last five years. The compounded growth results in dividends growing by 120% over the five-year period.

For the most recent 12 months, the ELS dividend has increased by 14.7%. The stock yields 2.27% compared to its four-year average of 2.33%. Remember for that yield to have stayed flat, the ELS share price appreciated by 15% per year.

Lamar Advertising Company (Nasdaq: LAMR) owns billboard, airport, and transit advertising assets. The company converted to REIT status at the beginning of 2014. At that point Lamar started to pay regular dividends with annual dividend growth of about 10%, including a 9.6% boost last year.

Compared to the stocks above, LAMR has a significantly higher yield at 5.0%. This REIT represents a different way to play the yield plus dividend growth equals total returns strategy. In the case of Lamar Advertising, the dividend growth rate is not as high, but the 5% yield is attractive cash return that can be used to compound share ownership.

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.

5 Hot Stocks With Huge Revenue Drivers Ahead

Which five hot stocks have juicy growth prospects ahead? Look no further!

All five stocks covered below are primed for significant expansion in the coming months. Stocks are already recovering from the recent market pullback, and these stocks, in particular, boast big catalysts that can push prices higher.

And you don’t have to just take my word for it. Each of these stocks has serious backing from the Street’s top analysts. I used TipRanks to ensure that the analysts referred to here are the best-performing analysts on the Street.

That means a high success rate and average return. These are the analysts you can trust for their precise stock picking ability.

So without further ado, let’s dive in:

Hot Stocks to Buy: Amazon (AMZN)

Source: Shutterstock

Now at an eyebrow-raising $1,500,, Inc. (NASDAQ:AMZN) does not immediately strike you as a cheap stock to buy. However, the valuation becomes increasingly attractive when you think of the multiple revenue drivers ahead. “We continue to think Amazon is the best growth story of all the mega-caps over the very long term,” analyst Rob Sanderson wrote recently. He sees the stock reaching $1,750 in the coming months (17% upside potential).

For example, the company is now reportedly planning a new service to pick up packages from businesses and deliver them to consumers. According to the Wall Street Journal, “Shipping With Amazon,” is expected to start in LA and roll out more broadly within the year. And Baird’s Colin Sebastian says that with “just 1% of the market, Amazon could create a new $5B revenue stream.”

Meanwhile, Amazon’s content strategy is also blossoming. The company has just poached NBC Entertainment president Jennifer Salke for Amazon Studios. And maybe you haven’t heard of Twitch, but Amazon’s live streaming video platform is now apparently bigger than CNN. Macquarie analyst Ben Schachter says Twitch aggregate viewership continues to rise, and that display ads on properties like Twitch contribute significantly to Other revenue. Note that “Other revenue” soared 58% to $4.65 billion in 2017.

Overall, the stock has a very bullish outlook from the Street. Out of 36 analysts polled by TipRanks in the last 3 months, 34 are bullish on Amazon stock with just 2 left on the sidelines. These analysts have an average price target on AMZN of $1,664.

Click to Enlarge

Hot Stocks to Buy: T-Mobile (TMUS)

Source: Via T-Mobile

T-Mobile US, Inc. (NYSE:TMUS) is the third-largest wireless carrier in the US. The company is easily outpacing competitors, capturing most of the industry growth since 2013. This is down to: 1) a greatly improved network, and 2) targeted marketing for under-served urban and rural areas. In 2017, for example, TMUS opened 1,500 T-Mobile-branded stores and 1,300 MetroPCS-branded stores.

Encouragingly, top Oppenheimer analyst Timothy Horan sees no signs of growth slowing down. On the contrary: “T-Mobile’s revenue margin expansion, coupled with ongoing subscriber momentum, supports our Outperform rating. TMUS is expanding geographically and is aiming to aggressively deploy its 600 MHz spectrum for increased coverage/capacity.”

This aggressive expansion should mean significant cash flow generation for TMUS — and a corresponding rise in share prices. Horan has high hopes that these share gains and lower churn will drive core EBITDA growth of 10%+ per year. As a result, this five-star analyst has a $75 price target on the stock (25% upside potential).

Our data shows that TMUS scores straight As from the Street. Including Horan, nine analysts have published TMUS Buy ratings in the last three months. Moreover, the average analyst price target of $74 indicates big upside potential of almost 24%.

Click to Enlarge

Hot Stocks to Buy: Caesars Entertainment (CZR)

Source: Shutterstock

Global gaming empire Caesars Entertainment Corporation (NASDAQ:CZR) is back! After emerging from bankruptcy in 2017, the company has effectively restructured and reorganized.

Now the company is focusing on the critical task increasing revenue growth. “Our future appears bright with a much-improved balance sheet, approximately $2 billion in cash, and strong free cash flow” management stated recently.

Top Oppenheimer analyst Ian Zaffino gets the hype. He has just reiterated his CZR buy rating with a $15 price target (14.5% upside potential). “We continue to recommend CZR based on its impressive opportunity set” says Zaffino. He sees ‘numerous levers’ for the company to pull, from higher revenue for renovated rooms to real estate development and meaningful acquisitions (such as a potential casino license at the $8 billion Elliniko project in Greece).

Interestingly, hedge funds are also very bullish on CZR right now. Funds increased holdings in by over 360% in Q4 with the combined purchase of over 50 million CZR shares. The total value of CZR shares held by hedge funds now totals over $8.4 billion.

In the last three months only two top analysts have published ratings on CZR (both a Buy).

Click to Enlarge

Hot Stocks to Buy: UnitedHealth (UNH)

UnitedHealth (UNH)

Source: Shutterstock

One of the US’s largest insurance companies, UnitedHealth Group Incorporated (NYSE:UNH), makes a very compelling investing proposition right now. Analysts are excited about the “favorable growth opportunities” for UnitedHealth in Latin America markets due to its Banmedica acquisition in Brazil. The $2.8 billion deal closed on Jan. 31.

For five-star Oppenheimer analyst Michael Wiederhorn: “the opportunity from the International business should represent a new avenue of growth that could help drive impressive long-term returns.”

He calls the stock his Best Idea for Feb-March and explains that “UNH is well positioned by virtue of its diversification, strong track record, elite management team and exposure to certain higher growth businesses.” Meanwhile its lucrative Optum tech business continues to account for a large share of earnings. Wiederhorn (one of the Top 50 analysts on TipRanks) has a $260 price target on UNH (13% upside potential).

Not surprisingly, UNH has 100% support from the Street. In the last three months, the company has received 11 buy ratings from analysts. So no pesky hold or sell ratings here. The $267 average analyst price target suggests just over 16% upside potential from the current share price.

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Hot Stocks to Buy: Alphabet Inc (GOOGL)

Source: Shutterstock

Last but not least, we have Alphabet Inc (NASDAQ:GOOGL), the umbrella company for Google and YouTube. If you think that GOOGL has already peaked, think again. Top Robert W. Baird analyst Colin Sebastian spies several exciting catalysts ahead as the company moves more aggressively in key markets. He adds the stock as one of Baird’s ‘Fresh Picks’ with a $1,300 price target (vs the current $1,128 share price).

A key catalyst lies in Amazon’s monster cloud business, Google Cloud. For the first time, GOOGL CEO Sundar Pichai has just disclosed that Google Cloud makes about $1 billion quarterly. That’s a massive $4 billion for GOOGL in annual revenue. However, this is still well behind Amazon’s AWS cloud unit and Microsoft’s Azure.

As a result, Sebastian sees big growth potential here.

He asks: “Will it take Google the 12 years it took Amazon?” No, Google will probably have a $20 billion cloud business in five years. And from an Amazon perspective, probably $150 billion of its market cap is probably AWS. [Cloud] is not recognized within Alphabet’s valuation — I think transparency will go a long way.”

TipRanks reveals that Sebastian is an analyst worth tracking. He is ranked as one of the site’s Top 10 analysts out of over 4,700 due to his impressive stock picking ability.

Overall, GOOGL boasts a firm ‘Strong Buy’ analyst consensus rating. In the last three months, analysts have published 24 buy ratings on the stock vs just 3 hold ratings. On average, these analysts see GOOGL spiking 16% to reach $1308.

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How to Profit from Demand Destruction of Oil

In the latest annual energy outlook from BP PLC (NYSE: BP), it was the first time the company forecast oil demand would eventually peak and then steadily decline. BP put the date for peak oil demand in the late 2030s.

And the cause is one I’ve told you about quite often in my articles – the rise of electric vehicles. BP said there would be 300 million electric vehicles on the road by 2040, up from about 3 million today. BP says electric vehicles will account for only 15% of the roughly 3 billion cars on the road in 2040. But they will account for 30% of all passenger car transportation, as measured by distance traveled, because so many of them will be shared vehicles, à la Uber.

BP’s outlook also envisaged renewable power growing from just 4% of global energy consumption today to 14% in 2040.

Add all of that up and you can surmise that a lot of changes are ahead for the oil industry. Yet only some of the world’s major oil companies are preparing for what the future will hold.

Your Friendly Neighborhood Power Provider

The oil companies that seem to have begun the process of adapting to a lower carbon economy are located across the pond in Europe. These include Royal Dutch Shell PLC (NYSE: RDS.A and NYSE: RDS.B)Total SA (NYSE: TOT) as well as the aforementioned BP. Both Shell and Total, for example, have invested heavily into natural gas as a cleaner alternative to coal for power generation.

But now the two companies are moving forward with even more ambitious plans.

Both Shell and Total are moving into the consumer power market. The reason is obvious to the head of Shell’s “new energy” strategy, Maarten Wetselaar. He forecast that the proportion of global energy consumption to be met by electricity will climb from less than 20% currently to about 50% over the next few decades.

This outlook is largely in agreement with the forecast of BP, which can be seen in the chart below:

Both companies have also moved into renewable energy. In January, Shell bought a 44% stake in the U.S. solar energy company, Silicon Ranch Corporation, for $217 million. And last October, it purchased NewMotion, which operates one of Europe’s largest electric vehicle charging networks. The company also has a 20% stake in the huge Borssele offshore wind project off the coast of Holland.

Total’s strategy is similar. It paid nearly $300 million for a 23% stake in the French renewable energy company, Eren. It also spent $2 billion (about a billion each) over the past few years buying the U.S. solar company, SunPower, and the French battery developer Saft. The latter makes specialized long-life lithium-ion batteries for industries including telecommunications, medicine, aerospace and defense. Its products are installed in two-thirds of the world’s commercial aircraft and over 200 satellites.

The management at both companies acknowledge that the global energy market – long dominated by oil – is beginning to give way to a lower-carbon system, with much larger future roles for natural gas and renewable power. And both companies are already laying the foundation for such a future by moving into the selling of power…

Shell is close to completing its acquisition of First Utility, the UK electricity and gas supplier, which it agreed to buy last December in a deal that will pit it against the U.K. ‘s larger power suppliers. Meanwhile, Total is in the early stages of building a retail energy business in its domestic French market to challenge the country’s incumbent power providers.

These acquisitions are all part of the long-term strategy of these companies. It’s a rather straightforward strategy too – to sell the power from their own renewable and other energy sources (such as natural gas) through their energy trading businesses to customers, both commercial and to a lesser extent, residential.

Shell, for instance, already is among the largest power traders in both Europe and North America. And given its size and scope, it may become a supplier of choice for many large industrial customers, threatening the long-term viability of existing utilities.

Related: Dump These Energy Stocks Before the Next Correction

What the Other Oil Companies Are Doing

Most of the other major European oil firms are moving down the same path as Shell and Total, albeit at a slower pace. BP has owned a large U.S. wind business for many years and in December signed a $200 million deal to buy Lightsource, a U.K. solar power developer. Even Italy’s Eni SpA (NYSE: E) and Norway’s Statoil ASA (NYSE: STO) are investing in solar and offshore wind, respectively.

Yet the two U.S. giants – ExxonMobil (NYSE: XOM) and Chevron (NYSE: CVX) – have largely not followed their European peers into other forms of energy besides oil. They seem content being dinosaurs drawing jeers from climate activists.

Exxon and Chevron are ignoring the eventual transition to a lower carbon world. No one knows how fast this transition will occur. But one thing is all but certain: electricity will be at the heart of the shift with power demand increasing in transportation, industry and the services sector as oil is displaced.

If you want to invest in oil stocks, I would completely avoid the U.S. majors and stick with the European majors where management seems more willing to diversify. As Mr. Wetselaar of Shell was quoted by the Financial Times, “Electrification… is going to be the story of the next decades. We want to not just be part of it; we want to become a leader.”

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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...
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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.
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Source: Investors Alley

Venezuela’s Crazy Crypto Experiment

Sometimes it feels like we’re living in a sci-fi movie.

Governments vs. hackers. Digital currency. And now, government-issued digital currency.

Venezuela has officially launched the presale of its “petro” cryptocurrency. According to the government, more than $735 million has been raised in the presale in just 20 hours. (I wonder how that compares with the country’s last bond sale…)

Venezuela plans to issue 100 million tokens in total, each backed by a barrel of oil. The starting price for each token is $60, and the presale ends March 19.

Apparently, the coins will be used to purchase deliverable oil from state-owned companies. The country also says that citizens who use the coin to pay taxes will get a 10% discount.

I’m very curious as to who’s buying these early tokens. Is it industrials that plan to actually use them for oil purchases? Venezuelan citizens who are sick of hyperinflation wiping away their savings? Neighboring countries that trade with Venezuela?

By the way, the U.S. Treasury has issued a statement saying that Americans should not participate, as it would probably violate sanctions against Venezuela.

Hinting at Crypto’s Potential
We don’t know if the Venezuela experiment will work. It certainly could because people who have suffered through horrific inflation tend to seek out alternatives: gold, silver, real estate… and now cryptocurrencies.

A government-backed digital currency could be attractive to both companies and people, especially when compared with the old, hyperinflated, nearly worthless currency, the bolivar. So even though the government has a bad financial record, local citizens, at least, may be willing to overlook it.

However, this is the first time a centralized power has released a cryptocurrency. It could go horribly wrong, in many ways.

We don’t know if they plan to “fix” the price of the petro to the price of oil, for example. That would take some serious engineering since there may be more demand than supply, or vice versa.

What if people start using the petro for everyday things? Do they plan to let the price rise far above the price of a barrel of oil, if demand is there? If each petro is worth $120, does it buy you two barrels?

We’ll know the answers to these questions soon enough. But the interesting thing about this story is how it demonstrates what crypto can do.

In the next few years, more countries, local governments and companies will begin issuing tokens or coins.

Let’s look at a hypothetical example. A city needs to finance a new toll bridge. They could use a platform like Ethereum to issue a token for that purpose.

There would be a “smart contract” that automatically shares a predetermined percentage of toll revenue with owners (once it’s operating). The tokens would trade freely on exchanges and find price equilibrium at a yield that investors are comfortable with.

Traditionally, the city would raise this money by issuing municipal bonds. Only institutional investors participate in these deals, so locals are left out in the cold.

But if they used a token or coin instead, they would get three major benefits:

Far more liquidity
Participation from small, non-institutional investors (aka 99% of all investors)
Efficient distribution of revenue with smart contracts on the blockchain.
It’s also a lot easier to store a token than it is a bond. Anyone can do it. And you don’t have to trust a bank or money manager to hold your money for you.

The toll bridge is just one example of how blockchains have the potential to transform the financial world.

There will also be equity tokens soon. They will be very similar to cryptocurrency but will represent shares in the company.

We’re already starting to see some amazing applications of blockchain technology. But if this were the internet, I’d say we’d be in about 1993. This is the very early adopter phase.

Over the coming years, we’re going to see some amazing technologies emerge.

The best part is almost anyone can participate in this blockchain revolution.

Good investing,

Adam Sharp
Co-Founder, Early Investing

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Source: Early Investing 

3 REIT Dividend Increases Coming in March

As a dividend focused stock analyst, I put less emphasis on short term share price fluctuations and more on dividend yields and dividend growth prospects. When the market turns volatile, such as what we have experienced in the last several weeks, it is good to go back to the basics of dividend investing, which for me is dividend growth. A growing payout should, over time result in a higher share price. One nice way to get a quick start to capital gains from dividend growth is to buy shares just before an announced dividend increase.

I maintain a database of about 130 REITs, which I use to track yields and dividend growth. The typical REIT increases its dividend rate once a year, at about the same time each year. Across the REIT universe, the dividend increase announcements come in almost every month of the year. Each month I like to cover the REITs on my list that have historically increased their payouts in the following month. You can use this information to establish longer term positions in stocks with growing dividends or try for the short-term capital gain that often occurs when a dividend increase is announced. Here are three potential REIT dividend increases for March.

Taubman Centers, Inc. (NYSE: TCO) acquires, develops, owns and operates regional and super-regional shopping centers. The company has grown its dividend by a 6% annual compound growth rate for the last 10 years. The payout rate was boosted by 5.0% last year. Despite a challenging retail environment in 2017, the company was able to generate growth in all its key financial metrics.

The current dividend rate is 66% of 2018’s FFO/share cash flow guidance, so a moderate dividend increase is probable to keep the growth track record going.

I forecast a 4% to 5% increase in the quarterly payout. Taubman Centers should announce the new dividend rate in early March. TCO yields 4.1%.

UDR, Inc. (NYSE: UDR) owns and operates multi-family apartment complexes. The company increased its dividend by 5.1% last year and has averaged annual dividend growth of 7.1% over the last five years. Adjusted FFO per share was up 5.5% for 2017.

Apartments have recently been viewed as a hot REIT sector that is slowing. Despite lower investor expectations, recent results from other apartment REIT have reported continued above average growth.

UDR should announce its new dividend rate in the second half of March. UDR yields 3.6%.

InfraREIT Inc. (NYSE: HIFR) is a REIT that owns electric power transmission and distribution assets in Texas. The company came to market with a January 2015 IPO. After its first year, the HIFR dividend was boosted by 11.1%. The dividend was not increased in 2017, even though revenues and cash flow were up in the high single digits.

During last year, the company ran into regulatory issues and was forced to exchange some assets. I expect the company will return to dividend growth in 2018 A high single digits dividend increase is very possible.

The next dividend announcement will be in early March, with an end of March record date and payment around April 20. HIFR currently yields 5.2%.

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Source: Investors Alley 

7 Buffett Stocks to Buy

Source: Shutterstock

If you’re looking for good Warren Buffett stocks to buy, there’s no better option than Buffett’s former money guy. I’m talking, of course, about Lou Simpson, the long-time Geico portfolio manager, who retired at the end of 2010 after 31 years at the company, more than a third of them spent under Berkshire Hathaway Inc. (NYSE:BRK.A, NYSE:BRK.B) ownership.

It’s hard to believe that the legendary investment manager, who outperformed the S&P 500 in 18 out of 25 years between 1980 and 2004, has been retired for more than seven years. Boy does time fly.

Simpson grew bored of retirement very quickly, so the veteran money set up SQ Advisors, an investment advisory firm with $200 million in assets under management that would handle money for friends, family and some charities.

Charging 1% annually with no performance fees, Simpson was just happy to have something to do every day that he enjoyed and could help people. Fast forward to the end of 2017 and Simpson’s managing $3.1 billion in assets invested in just 14 stocks.

Although all 14 companies in SQ Advisors’ portfolio are good investments, here are what I think are the seven stocks to buy from Lou Simpson’s portfolio:

Buffett Stocks to Buy: Brookfield Asset Management (BAM)

This alternative asset manager is easily one of my favorite stocks anywhere in the world. Up until mid-2017, long-time Brookfield Asset Management Inc (NYSE:BAM) CEO Bruce Flatt flew under the radar of most investors.

However, it decided it needed to tell its story to more people, and so the company went on a bit of a PR tour that culminated in Flatt appearing on the cover of Forbes magazine’s May issue.

Most people probably couldn’t pick Flatt out of a police lineup but Simpson could.

Brookfield is SQ Advisors’ largest holding at $335 million, or 10.9% of its multi-billion portfolio. He knows that delivering a cumulative return of 1,350% over the last 15 years, as Flatt and company have done — more than seven times the S&P 500 — is no easy feat.

Lou Simpson investing in Brookfield, especially in such a focused portfolio, is the ultimate form of flattery. If you can only own one of these stocks, I’d make it Brookfield.

Buffett Stocks to Buy: Liberty Global (LBTYK)

Buffett Stocks to Buy

Source: Shutterstock

Liberty Global PLC (NASDAQ:LBTYK) is one of John Malone’s many interests. Malone holds 25.7% of Liberty Global, the world’s largest international TV and broadband company with $15.5 billion in annual revenue operating in 12 European countries under brands such as Virgin Media and Unitymedia.

In case you’re wondering, Warren Buffett’s company controls 5.4% of Liberty Global’s votes; SQ Advisors about half that amount. Simpson acquired his position in the second half of 2014 at prices between $40 and $43. Today, it trades around $32.

But before you question my sanity, it’s important to remember that Liberty Global spun off its Latin American business — operations in Chile, Puerto Rico, the Caribbean and other parts of Latin America — in early January.

Shareholders got one share in the newly independent business for each Liberty Global share. Together, they’re worth $55.

Simpson holds his businesses for the long haul, so unless the story drastically changes I’d expect him to continue to make Liberty Global one of his biggest positions.

Buffett Stocks to Buy: Berkshire Hathaway (BRK)

Buffett Stocks to Buy

Source: Shutterstock

It would be darn near impossible not to include the stock of Simpson’s former boss on my list of seven stocks to buy.

Interestingly, Berkshire Hathaway is not one of SQ Advisors’ top five holdings. In fact, Simpson only owns a little over one million Class B shares, which represent 6.7% of the $3.1-billion portfolio.

Although Buffett and Simpson have a similar investing style, the former Geico money manager is far more likely to invest in smaller companies than Buffett, making a more significant position in Berkshire Hathaway an unlikely occurrence.

“What we do is run a long-time-horizon portfolio comprised of ten to fifteen stocks. Most of them are U.S.-based, and they all have similar characteristics. Basically, they’re good businesses,” saidSimpson in a rare 2017 interview. “They have a high return on capital, consistently good returns, and they’re run by leaders who want to create long-term value for shareholders while also treating their stakeholders right.”

That sounds an awful lot like Berkshire Hathaway, doesn’t it?

Simpson bought a big chunk of BRK stock back in early 2012 at prices between $76 and $82, an annualized return of 17.1% over six years.

Buffett Stocks to Buy: Tyler Technologies (TYL)

Buffett Stocks to Buy

Source: Shutterstock

While this is one of Simpson’s smaller holdings representing just 5.2% of SQ Advisors’ portfolio, I just love the niche aspect of its business. Tyler Technologies, Inc. (NYSE:TYLfocusesexclusively on the public sector providing a wide range of software and solutions to local governments and schools.

It might not be glamorous, but providing the tools needed by public sector operations pays the bills; more importantly, it keeps America moving. A storied history that dates back to 1938, Tyler committed to serving the public sector in 1997; it’s been uphill ever since.

The company finished 1997 with a profit of $1.2 million on $76.4 million in revenue. Nineteen years later, in its most recent fiscal year ended Dec. 31, 2016, it generated net income of $109.9 million on $756.0 million in revenue.

A $100 investment at the end of 2011 was worth $474.16 five years later, more than double the performance of the S&P 500 in the same period.

It’s not a fast-growing business but it sure is consistent, increasing revenues in nine out of the last ten years. No wonder Simpson likes it.

Buffett Stocks to Buy: Cable One (CABO)

Buffett Stocks to Buy

Source: Shutterstock

One of the portfolio’s smallest holdings by market cap, Simpson added 125,094 shares of Cable One Inc (NYSE:CABO) in Q4 2017, boosting it from the tenth-largest position in the previous quarter, to the fifth largest by the end of the year.

Representing 8.2% of the portfolio, Cable One is one of the ten largest cable companies in the U.S. with more than 800,000 residential and business customers across 21 states. 

Why Cable One?

It’s got a simple business plan that focuses on higher-growth, higher-margin products that generate positive cash flow while keeping a lid on costs. It doesn’t want the most customers; it wants the most profitable ones.

Looking to find more profitable customers, Cable One acquired NewWave Communications in 2017 for $735 million. NewWave was the 19th largest cable company in the U.S. with customers in seven states. Still, in growth mode, Cable One’s focus on the profit and loss statement will deliver higher returns from NewWave under its management.

Simpson likes owning good businesses. Cable One fits that to a tee.

Buffett Stocks to Buy: Charles Schwab (SCHW)

Buffett Stocks to Buy

Except for the recent return of volatility, the nine-year bull market has been good news for Charles Schwab Corporation (NYSE:SCHW), who’ve seen operating profits grow from $1.1 billion at the end of 2009 to $3.7 billion this past year while operating margins increased 16 percentage points to 43%.

The wealth management industry’s been good to Schwab and Schwab shareholders. Over the past five years, SCHW stock’s delivered an annualized total return of 26.3% to shareholders.

Now Simpson’s third-largest holding, it’s clear he’s not afraid to buy and sell Schwab stock, as the number of shares held has ebbed and flowed since first buying in 2011.

Currently trading near $53, Schwab had a very healthy 2017, with revenues and income up 15% and 25%, respectively. An amazing stat highlighted in its Q4 2017 press release gives you an idea of the runway it has heading into 2018 and beyond:

Schwab’s Retail business rose by 49% versus 2016; 54% of these households were age 40 or younger.”

Need I say more?

Buffett Stocks to Buy: Allison Transmission (ALSN)

Buffett Stocks to Buy

Source: Shutterstock

 Allison Transmission Holdings Inc (NYSE:ALSN) might be the ultimate Warren Buffett stock if it were only a little bigger.

 Simpson’s fourth-largest holding at 10.0% of the portfolio. While the money manager trimmed SQ Advisors’ holdings slightly in Q4 2017, the manufacturer of heavy-duty commercial vehicle transmissions and hybrid-propulsion systems for city buses is a relatively new purchase for Simpson; he first acquired shares in 2016.

As long as the U.S. economy continues to chug along, investors can expect Allison Transmission to continue to do well. In Q4 2017, the company increased its North America On-Highway revenue by 24% to $270 million. Outside North America, Allison’s On-Highway business increased sales by 18% year over year to $98 million.

In fiscal 2017, revenues and operating profits increased by 22.9% and 44.3%, respectively. The company expects 2018 net sales to increase by as much as 7% on strong On-Highway results.

Unless something happens to the economy, this guidance seems conservative. I see good things in store for Allison in 2018.

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

5 Sin Stocks to Sell Your Soul For

Source: Shutterstock

Are you looking up to spice up your portfolio in these uncertain times?

Some investors may think that it is morally wrong to invest in the companies below. These are companies that are involved in addictive vices like alcohol and gambling. But others will disagree — and to those people, I say, read on!

“Various studies have investigated the historical performance of sin stocks and observed that they have delivered significantly positive abnormal returns” says David Blitz, co-head of quantitative research at Robeco. One popular explanation is that these stocks are systematically underpriced because so many investors shun them.

So with this in mind, I set out to find five of these “sin stocks” that all share backing from the Street’s top analysts. I used TipRanks to double-check that these stocks all have a “strong buy” top analyst consensus rating. This is based only on ratings from the last three months, and looks at analysts with the highest success rates and average return.

Without further ado, let’s delve in and take a closer look at these 5 top sin stocks now:

Top Sin Stocks: Raytheon (RTN)

Defense giant Raytheon Company (NYSE:RTN) is the world’s largest producer of guided missiles.

“Strong broad order momentum, a large Patriot backlog, and untapped financial firepower give RTN extended EPS and cash flow per share growth potential” cheers five-star Cowen & Co. analyst Cai Rumohr.

Foreign sales are booming, with sales increasing for the last 14 years. Now Rumohr sees 2018 foreign orders exceeding 2017’s $8.5B, with healthy foreign revenue growth extending out into 2019-20. These include Patriot awards from Romania ($450 million-$500 million initial order in 2018; $2 billion total), Sweden ($1 billion), Poland ($4 billion-$5 billion but could slip into 2019), and a new unidentified European customer ($1.5 billion but in 2019).

Closer to home, rising defense spending means RTN also has ample domestic opportunities lined up. Most notably, the Harpoon replacement missile bid, an $8 billion opportunity, could be decided as soon as fall 2018.

All in all, it’s not surprising that RTN scores a first-class “strong buy” Street consensus rating. We can see from TipRanks that the average analyst price target of $231 works out at 6% upside from the current share price.

Top Sin Stocks: Philip Morris (PM)

Is Marlboro-maker Philip Morris International Inc.(NYSE:PM) still a sin stock?! The company is turning over a new leaf and committing to a more smoke-free future. This may sound like an oxymoron for one of the world’s largest cigarette companies, but PM now wants to build its future “on smoke-free products that are a much better choice than cigarette smoking.”

The result is a new focus on developing vapes and e-cigarettes that contain nicotine but don’t burn tobacco.

And it looks like the Street approves of this dramatic decision. In the last three months, PM has received only buy ratings from analysts. These analysts have an average price target on PM of $123.75, suggesting big upside potential of almost 19%.

Indeed, Philip Morris is currently a top pick for Morgan Stanley in the food/protein/tobacco sector.

“Looking ahead to 2018, we now believe PM will set expectations for an EPS in line with its +8-10% long-term target as the company reinvests to protect its first-mover advantage in heated tobacco and launches nationally in a broader range of markets outside Japan/Korea” stated the Morgan Stanley team recently. The firm has a $120 price target on PM.

Top Sin Stocks: Constellation Brands Inc (STZ)

Constellation Brands STZ

Constellation Brands, Inc. (NYSE:STZ) is an international producer and marketer of beer, wine and spirits. Constellation is the largest beer import company measured by sales and has the third-largest market share of all major beer suppliers. Investing in STZ means betting on Modelo, Corona and Pacifico.

Shares in Constellation have exploded over the last year from just $160 to the current share price of $220. Luckily for investors, there appears to be plenty of further growth potential ahead. BMO Capital’s Amit Sharma has just initiated STZ with a bullish $275 price target. This translates into big upside potential of over 25%.

He says the alcohol beverage sector will remain “one of the largest and fastest-growing consumer staples segments” with an ongoing “premiumization” trend. And the analyst singles out Constellation Brands as “one of the most compelling growth investments in the staples universe.” He believes it is trading at a significant discount to peers.

Sharma is now plotting sales growth of 7%-8% and EPS growth of 15%-16% over the next three years for Constellation. Overall, we can see that this “strong buy” stock has scored seven recent buy ratings vs two hold ratings. Furthermore, the average analyst price target suggests upside potential of over 13%.

Top Sin Stocks: Melco Resorts (MLCO)

Top Sin Stocks: Melco Resorts (MLCO)

Source: Shutterstock

Melco: Your winning hand. So goes the slogan of top gaming operator Melco Resorts & Entertainment Ltd(ADR) (NASDAQ:MLCO). The company owns several casino resort facilities in Asian gaming capital Macau, including the famous City of Dreams (home to the world’s largest HK$2 billion water-based extravaganza!).

From a Street perspective, Melco scores a royal flush, with only recent buy ratings. Indeed, if we dig further into the ratings, we can see that the stock has received two rating upgrades in the last three months. One of these upgrades comes from top JP Morgan analyst Joseph Greff.

According to Greff, the stock’s valuation discount to peers is compelling and he is confident that a dividend raise can further narrow the gap. Looking forward, he projects rising VIP and premium mass growth in 2018. As a result Greff boosts his price target from $27 to $32 (11% upside potential). This falls just under the average analyst price target of $33.97 (18% upside from current share price).

Top Sin Stocks: Mondelez (MDLZ)

The sweetest of all naughty stocks right now is Mondelez International Inc (NASDAQ:MDLZ). This multinational corporation owns all the best billion-dollar brands, from Ritz and Oreo to Toblerone and Cadbury. Mondelez may not be a traditional sin stock, but given rising obesity levels, MDLZ is veering dangerously close to the dark side.

But chocolate aside, Mondelez is looking pretty appealing from an investing perspective. Not only is Mondelez a sustainable dividend growth stock, but it is also primed for a robust 2018.

So says five-star RBC Capital analyst David Palmer. He argues that “outperformance is the norm for Mondelez” and “forecasts 2018 to be a year of steady topline improvement and double-digit total returns with additional stock upside potential through M&A.”

He ramped up his price target to $56 (28% upside potential) at the beginning of February.

Overall, this “strong buy” snack giant scored five recent buy ratings vs one solitary hold rating. The average price target indicates upside potential of just over 17%.

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