I’m a great believer in looking at areas that few on Wall Street do for growth opportunities. I like to find a major positive change happening in the global macroeconomic environment that will benefit a sector or industry and then uncover a company that should benefit from this change in the long term.

I’ve recently discovered such a change and want to bring it to your attention… the growing worldwide airplane pilot shortage.

All of the world’s largest countries, both in the developed and developing world, cannot find enough pilots to fly their planes. This will affect you as a consumer because if airlines cannot find enough pilots, they will reduce service or even drop many routes entirely. But it could affect you more as an investor because of the profit opportunity it offers.

The Boeing and the ICAO Studies

Last summer, Boeing (NYSE: BA) released a study that estimated the world’s airlines will need about 637,000 new pilots over the next two decades to meet demand. That works out to be 87 new pilots entering the commercial ranks every day for the next 20 years!

About 40% of that number will be needed just to replace the pilots globally who will be retiring over the next 20 years. This is a similar problem that I described in the May issue of Growth Stock Advisor with regard to U.S. healthcare staffing as the baby boom generation retires.

The remaining 60% will be needed to cover all the additional flying that airlines are expected to do over the next 20 years, especially in the ultra-fast-growing Asian air markets. That’s one of those positive macroeconomic trends I mentioned earlier – rising incomes in places like China and India are leading to an unprecedented tourist boom emanating from Asia. More on that later.

But even here in the slower growing U.S. market, more pilots will be desperately needed. Boeing said the U.S. market will need about 117,000 new pilots over the next two decades. That’s roughly 5,800 pilots a year or, over three years, it’s the equivalent of the current number of pilots that American Airlines has.

Think about that for a second: imagine if a major airline, like American Airlines, had to replace every pilot every year for the next 20 years. That’s where we are right now and where one of my newest finds fills that niche.

A similar study was conducted by the International Civil Aviation Organization. Its study found that the global airline industry will need 980,000 pilots in 2030, more than double the level of 2010. That will require the training of 50,000 pilots annually.

Just Put More People into Pilot Training, Right?

Bottom line – a lot more pilots will be needed globally. But why aren’t more people pursuing an aviation career?

In simple terms, it isn’t easy to become a pilot.

Even ignoring the physical requirements, it’s darn expensive to become a pilot. Here in the U.S., it costs about $125,000 (on top of whatever you spend for a four-year college degree which is usually required) to get the necessary ground and flight training you need. And thanks to a Congressional mandate, you need to have at least 1,500 flight hours before any passenger airline will hire you.

A Leading Trainer for Professional Pilots

CAE (NYSE: CAE) has been in business since 1947 and offers you a “pure play” training company driven by the long-term growth in civil aviation around the world. That is in contrast to some of its competitors such as L3 Technologies (NYSE: LLL), which are involved in other businesses. The company also is riding the wave of simulation-based training in areas with critical tasks including defense and security as well as healthcare.

It continues to define global training standards with its innovative virtual-to-live training solutions to make flying safer, maintain defense force readiness and enhance patient safety.

CAE has the broadest global presence in the industry, with over 160 sites and training locations in over 35 countries that includes the world’s largest civil aviation network with over 50 training locations, more than 250 full flight simulators, over 2000 instructors and more than 160 aircraft. Each year, CAE trains more than 120,000 civil and defense crew members and thousands of healthcare professionals worldwide.

Source: company investor presentation.

One reason I like CAE is that the company is the leader in these markets, but still with lots of room for growth thanks to the significant, untapped market opportunities that exist in its three core businesses.

While CAE is a market leader in civil aviation training, it addresses less than a third of what the company estimates to be a $3.5 billion training market. Company management is well aware of the incredible growth opportunities here. It says that 50% of the commercial pilots that will be active in 2027 have not begun training yet. CAE predicts there will be a need for 180,000 new captains and 250,000 new first officers over the next decade.

In defense and security, CAE has a 7% share of the approximately $15 billion training systems integrator (TSI) market. In addition to contracts with all the U.S. military branches, CAE also trains people for the U.K. and Swedish militaries as well as NATO.

In healthcare, it is an innovation leader in the simulation-based healthcare education and training market. The company sees significant opportunities for long-term growth as the healthcare market increasingly adopts simulation as a means of training. CAE Healthcare was the first company to bring a commercial Microsoft HoloLens mixed-reality application to the medical simulation market.

By using the HoloLens, the CAE Vimedix AR ultrasound simulator integrates real-time interactive holograms of the human anatomy. If you think back to last month’s issue and the critical need for more healthcare personnel, you realize how much this type of training is needed.

Another reason I like CAE is that much of its revenues are recurring due to long-term agreements with many airlines as well as military services. In 2017, 60% of its revenues were recurring, up from 43% in 2008 and just 15% in 2001.

In addition, of its $2.7 billion in 2017 revenue, 58% came from civil aviation training solutions and 38% from defense and security training programs. The remainder came from its small, but rapidly growing, healthcare business.

CAE’s revenue base has what I like too – a broad geographic mix with 36% of 2017 revenue coming from the U.S., 28% from Europe and the remaining 36% from the rest of the world. It is the latter area that is growing the quickest thanks to the aforementioned rapid growth in Asian airline travel.

The macrotrends I have been telling you about are already coming together to boost CAE. The evidence can be seen in its latest fourth quarter and full fiscal year results, which sent the stock up 5% immediately afterwards. Let me fill you in on some the details…

Annual fiscal 2018 revenue was C$2.8 billion, up 5% from the prior year. Annual net income attributable to equity holders from continuing operations was C$347.0 million (C$1.29 per share). This includes an income tax recovery related to the U.S. tax reform, and net gains on strategic transactions relating to CAE’s Asian joint ventures: Asian Aviation Center of Excellence and Zhuhai Flight Training Center.

Marc Parent, the company’s president and CEO, summed up the company’s performance:

“CAE’s training strategy is proving successful as evidenced by our strong performance in the fourth quarter and fiscal year 2018 and our delivery on our growth outlook across all segments. I am especially pleased with our increased momentum to be the recognized global training partner of choice, as underscored by a record $3.9 billion annual order intake and $7.8 billion backlog. We grew earnings per share by 8% this year and increased return on capital to 12.3% on higher training demand and the deployment of accretive growth capital. In Civil, we grew segment operating income by 12% and booked a record $2.3 billion in orders, and in Defense, we grew segment operating income by 6% and booked a record $1.4 billion in orders. In Healthcare, we resumed growth with the launch of innovative products and a broader market reach. Our core markets benefit from strong fundamentals and secular tailwinds, and as we look to the year ahead, we expect CAE to exceed the underlying rate of growth in these markets.”

I especially like his last statement saying that CAE would exceed the underlying rate of growth in markets that are experiencing accelerating rates of growth themselves. But keep in mind CAE is a company with solid fundamentals behind it and not some company that adds blockchain to its name, sending the stock soaring.

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: Investors Alley 

Back in April, I shared with you about the growing problem facing humanity in many places around the world – the growing scarcity of water, which is the foundation upon which our very civilization is built.

Conditions are still very bad, making water even more of a no-brainer sector for some of your investment money. Let me fill you in on what has happened since my last article on water.

First, there was new satellite data on freshwater reserves from NASA that revealed dozens of regions across the globe are in danger of becoming the next Cape Town. If you’ll recall, I told you about the South African city of nearly four million residents that was in danger this year of becoming the first of the world’s big cities to run out of water. It had to impose severe water-saving measures to avert “Day Zero”… more on that situation in a moment.

Research from scientists at NASA and the Jet Propulsion Laboratory shows that worldwide fresh water reserves have changed drastically since 2002. The decline in water availability in regions such as northern India, north-east China, the Caspian Sea and across the Middle East has been blamed mainly on irrigation and groundwater pumping.

The study was the first to use gravitational satellite data to map global trends in fresh water availability across a 14-year period, drawing on data from NASA’s Grace satellites. The research identified areas where water resources rose or fell significantly during the period, and it found 14 regions where changes were primarily due to human activity, compared with eight regions where the changes were mainly caused by climate. As Jay Famiglietti, one of the study’s authors, noted “Fresh water availability is changing and water insecurity is much closer than we think.”

Day of Reckoning Postponed Briefly

That means there could a number of Cape Towns in our future.

Speaking of Cape Town, it managed to postpone it so-called ‘Day Zero’… barely. Theewaterskloof, the biggest reservoir for the city, is a vastly diminished trickle of its former self after three years of relentless drought have reduced it to barely a tenth of its 480 billion-liter capacity.

But for now, ‘Day Zero’ has been put off until 2019. The drought is still going, but the people have made unprecedented efforts in conserving water. In three years, Cape Town residents have more than halved their use from 1.2 billion liters a day in 2015, to just over 500 million liters (about 132 million gallons) at the start of this year. Part of the restriction included suburban residents living with just 50 liters (a little over 13 gallons) a day per person versus the global average of 185 liters.

If and when ‘Day Zero’ restrictions kick in, residents’ water rations would be cut to 25 liters a day. This will be triggered when overall dam levels fall to 13.5% – they were 19% recently.

Water and Geopolitics

Water is also becoming more important geopolitically. Take a country that has been in the news a lot lately – Turkey.

Turkey is the country where the very important Tigris and Euphrates rivers originate and it decides how much of the water to release to its neighbors to the south – Iraq and Iran. It recently decided to restrict the water flow on the Tigris River as it fills a reservoir behind a newly-built dam. Many of those dams, by the way, flooded the traditional lands of the Kurdish people that President Recep Tayyip Erdoğan is constantly fighting against.

That restriction of the Tigris is not good news for those downstream. In Iraq, for example, inflows this year are 40% below the long-term median.

Water shortages pose an immediate and very real threat to Iran, Turkey’s ancient rival. Kaveh Madani, a former Iranian deputy vice-president for the environment and a professor at Imperial College London, said to the Financial Times: “This is not a water crisis. It is a bankruptcy.”

He was not exaggerating the seriousness of the situation. Drought now afflicts 97% of Iran. The country’s most serious recent protests were not against “moderates” or “conservatives” in the government and the average person there could care less about the U.S. withdrawal from the nuclear deal… they were protesting about the lack of water.

The protests are aimed in the right direction – poor government policy. Iran’s policy to raise national food production has led to the cultivation of marginal farmland and, in turn, over-irrigation, salinification and increased desertification.

Water Investments

As you can see water is becoming more and more crucial and is a must-own investment. So how can you participate in the water investment thesis?

The broadest way is through exchange traded funds of which there are five water sector ETFs. The one I like the most is the former Guggenheim S&P Global Water Index ETF, which is now controlled by Invesco and is called the PowerShares S&P Global Water Index Portfolio (NYSE: CGW).

This is nicely balanced geographically with about 45% in the U.S. and the rest overseas. The top two sub-sectors within the fund are utilities (46%) and industrials (41%). Wall Street is apparently still in the ‘ignorance is bliss’ mode when it comes to the global water situation because this fund gained only 6.7% over the past year and is actually down 1% year-to-date.

Among its top ten positions are names that should be well-known to U.S. investors: American Water Works (NYSE: AWK), Xylem (NYSE: XYL), Idex (NYSE: IEX), Danaher (NYSE: DHR) and Aqua America (NYSE: WTR). Both AWK and WTR are water utilities, while the other three are industrial companies.

Interesting to note that these stocks have actually outperformed the ETF on an individual basis, which is why I almost always opt for individual stocks instead of an index or an ETF. Here are the gains for these stocks on a one-year basis and year-to-date respectively:

• American Water Works – 8.39% and a minus 2.75%
• Aqua America – 12.1% and a minus 3.5%
• Danaher – gains of 24% and 8.4%
• Idex – gains of 35.5% and 16.5%
• Xylem – gains of 28.5% and 11.66%

One of these stocks is my top water recommendation in my Growth Stock Advisor newsletter – Xylem. It recently came in at number 7 on the Fortune 2018 “Change the World” list for its effect on the world.

Following the acquisition of Sensus in 2016, Xylem now operates in three segments: water infrastructure, applied water and Sensus.

The Water Infrastructure segment includes the company’s business surrounding the sourcing, collection, treatment, and transportation of water. The primary customers in this segment are public utilities and large industrial companies. These customers use Xylem products including industrial pumps, filtration and treatment equipment, and infrastructure control systems.

The Applied Water segment involves the Xylem’s products and services sold to residential, commercial, industrial, and agricultural end-users. Some of the products in this segment include pumps, valves, heat exchangers, hydro turbines, and dispensing equipment systems. Its Applied Water business focuses more on the distribution of water to households and businesses.

The third segment of Xylem’s business is Sensus. It represents the company’s largest foray into the smart technology market. Sensus is all about technology and includes a variety of smart meters, cloud-based analytics software, remote monitoring and data management systems, and smart lighting.

The company reported excellent results for the second quarter of 2018. It delivered $1.3 billion in second quarter 2018 revenue, up 13% year-over-year. Revenue for the quarter rose 8% on an organic basis, driven by double-digit growth in utilities and continued strength in the industrial and commercial end markets across nearly all major geographies. Orders increased 8% organically in the quarter. Xylem now forecasts full-year 2018 revenue of approximately $5.2 billion, up more than 10% versus the prior year. On an organic basis, Xylem now anticipates revenue growth in the range of 6% to 7%. Xylem also narrowed the range of its full-year 2018 earnings expectations, with adjusted earnings per share in the range of $2.85 to $2.95. This represents an increase of 19% to 23% from Xylem’s 2017 adjusted results.

Xylem’s stock is up more than 12% since the November 29 recommendation date despite the turbulent stock market we’ve had in 2018. And I expect much more upside in the years ahead due to the water situation globally.

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.

Pay Your Bills for LIFE with These Dividend Stocks

Get your hands on my most comprehensive, step-by-step dividend plan yet. In just a few minutes, you will have a 36-month road map that could generate $4,804 (or more!) per month for life. It's the perfect supplement to Social Security and works even if the stock market tanks. Over 6,500 retirement investors have already followed the recommendations I've laid out.

Click here for complete details to start your plan today.

While Wall Street fawns over earnings reports from market darlings such as Apple (Nasdaq: AAPL), something else caught my eye this earnings season. That is the fact that the multi-front trade battles are prompting warnings from some of the largest U.S. companies that higher tariffs will squeeze their profit margins, force them to pass on the pain to suppliers and push prices up for consumers.

A look at corporate executives’ comments since the start of the second quarter reporting season show a marked change from the prior quarter. In the first quarter, attention focused on calculating the benefits to companies’ bottom lines of the corporate tax cuts Congress passed at the end of 2017. But now the focus has shifted to the trade war and rising costs.

According to Bespoke Investment Research, about halfway through earnings season, the percentage of conference calls where tariffs have been brought up have more than doubled relative to the first quarter – 39.8% vs 16.6%. For the entire first quarter earnings season, the word tariff only came up 290 times, but has already cropped up over 600 times, says Bespoke.   

I liken it to a three-act play. In the first act, companies were caught off guard by rising costs and their profits were hurt, negatively affecting their stock. In the second act, companies got a handle on the cost environment, announcing their intentions to pass on higher costs to consumers. Wall Street has gotten confident in that story, and stocks in sectors including consumer staples are in the process of recovering. But it is the third act that has yet to unfold and is worrisome. What happens when all of these pricing increases hit the economy?

Company Executives’ Caution

The AutoNation CEO, Mike Jackson, said in his earnings call that so far, auto manufacturers have absorbed increases in the price of steel and aluminum without passing them on as they await the outcome of trade negotiations. But if tariffs becomes a permanent state of affairs, then manufacturers will have no choice but to try to pass those higher costs on. He said: “Consumers will not pay those higher prices. Volumes will fall, and they’ll have a material impact on the industry and on the economy.”

To date, General Motors has seen a $2 billion rise in its costs from higher commodities prices as well as currency headwinds. The company had been on track for another year of record profits until steel and aluminum tariffs were imposed. Even though GM sources most of metals needs domestically, it was hit hard because U.S. producers raised their prices by 40% to 50%, or much more than the tariffs themselves.

And there are many other companies that have sounded a note of caution too. . . . .

Caterpillar, for example, a big purchaser of steel to build its construction equipment, said it’s preparing for as much as $200 million in tariff-related costs in the second half. Industrial companies from Danaher to United Technologies said they were eyeing price increases because of their rising costs.

And for consumers, price increases will leave a bad taste: Coca-Cola said it will charge more for soda to offset the rising cost of the aluminum it buys for its cans. “I think it’s going to be one of those things that goes through into consumer pricing,” cautioned James Quincey, CEO of Coke, after the company increased prices in response to increases in an array of costs, from freight to the aforementioned aluminum used in Coke cans.

Apple Warns

The protectionist measures threaten tech companies too. And it’s not just semiconductor companies and their supply chains that are being affected.

One prominent company that is sounding a warning about tariffs is Apple. In its latest filing with the SEC, Apple said tariffs and other protectionist measures may “adversely affect” the company. Here is exactly what Apple said in the filing:

“International trade disputes could result in tariffs and other protectionist measures that could adversely affect the Company’s business. Tariffs could increase the cost of the Company’s products and the components and raw materials that go into making them. These increased costs could adversely impact the gross margin that the Company earns on sales of its products. Tariffs could also make the Company’s products more expensive for customers, which could make the Company’s products less competitive and reduce consumer demand. Countries may also adopt other protectionist measures that could limit the Company’s ability to offer its products and services. Political uncertainty surrounding international trade disputes and protectionist measures could also have a negative effect on consumer confidence and spending, which could adversely affect the Company’s business.”

And indeed, Apple’s fastest-growing division, which includes Apple Watch, AirPods earphones and HomePod speaker, is at risk of being caught up in President Trump’s latest proposals to slap a 25% tariff on Chinese imports. The devices that make up the bulk of Apple’s multibillion-dollar “other products” unit are highly exposed to the looming trade war. Apple will be forced to raise prices to compensate for the higher duties on the Chinese-made products or take a hit to its profit margins.

This “other products” is very important to Apple’s future since it is on track to become the company’s third-largest revenue source shortly, trailing only iPhones and services.  Apple shipped about 3.5 million watches in the second quarter, up 30% year on year, with more than half of those sold in North America. And its “other products” revenues rose 38% in the quarter, compared with iPhone revenue growth of 17% year on year.

Related: Will These 3 Popular Stocks Be the First Casualties of Trump’s Trade War?

Broad Swath of America Affected

So who will be affected by the growing trade dispute? And what will its effect be on your portfolio?

It’s not just the companies directly impacted by higher costs that you need to be concerned about. The technology sector may remain the market’s darling, but consumers don’t care which companies are impacted by tariffs and freight and which ones aren’t. They have a fixed budget, and if their cost for basics like groceries all go up in price, that will be less money left over for Amazon orders, streaming media services and smartphone replacements. In other words, if we continue down the current path, just about everyone will be affected.

Stocks-wise so far, it has been a mixed bag. Tariffs on steel and aluminum that started in March prompted LincolnElectric, a maker of welding equipment, to slap tariff surcharges on its products. Some companies though have reported a benefit, including rail operator CSX, which hauls ore to American steelmakers that are adding production.

The list of losers though is quite long. Bloomberg data shows some of the other companies I did not mention adversely affected so far by tariffs: MillerCoors, Brown Forman, Procter & Gamble, Alcoa, Sonoco, PPG Industries, Gentex, GE, Stanley Black & Decker, Harley Davidson, Illinois Tool Works, Lennox International, Hexcel, Plains All American Pipeline, Whirlpool, Eastman Chemical, Tyson Foods, Cummings, Kimberley-Clark, Sunpower and Bunge.

As time goes on, it will be harder to find companies not affected by trade policy. So what can you do with your portfolio?

Related: Buy These 3 Stocks Profiting from Trump’s Trade War

I would start looking for companies that do have pricing power and have been able to pass along price increases, but that do not sell at sky-high valuations or have high expectations built into the stock price.

For example, at a glance you would think US Steel would be a winner since it has raised steel prices so much. But so much high expectations have been built into the stock that, after its earnings report, its stock fell by more than 10%.

One sector that may be worth a look is one despised by Wall Street – consumer staples. Food and other firms in the sector are starting to be able to pass along their higher costs on to the ultimate users – the consumers.

One broad way to play this sector is through the Invesco DWA Consumers Staples Momentum ETF (Nasdaq: PSL), which is actually up 10.5% year-to-date and 18.5% over the past year.

If you take a look at its portfolio, you will find some individual stocks that may be worth a look.

One of the stocks I like is the packaged goods company Post Holdings (NYSE: POST). It reported excellent earnings on August 2, with revenues for the quarter of $1.61 billion, which above Wall Street estimates. This and a positive outlook sent its stock soaring by more than 10%, bringing its year-to-date gain to over 18%.

A similar story – with above expectations results for earnings per share and revenues along with positive forward guidance – unfolded at another packaged food company, Lamb Weston Holdings (NYSE: LW). The supplier of frozen potato, sweet potato, vegetable and appetizer products to retailers and restaurants globally has seen its stock move up 28% year-to-date and 67% over the past year.

Finally, there is the company best known for its spices, McCormick (NYSE: MKC).

Its stock is up nearly 20% year-to-date and over 27% over the last year. In late June, it posted great earnings and management reaffirmed its 2019 earnings and sales would be at the top end of its forecast and above analysts’ estimates. Its second quarter sales jumped 19%, boosted by the Frank’s and French’s brands it had acquired last year.

Bottom line – if trade tensions worsen, satisfy your hunger for profits with the still out-of-favor consumer staples sector.

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: Investors Alley 

Best Stocks to Buy Now: Netflix (NFLX)

Netflix Inc (NASDAQ: NFLX) is one of the famed FANG stocks. And along with AMZN, it makes our top 10 list.

This may be surprising given the fact that NFLX recently announced it missed its projected new subscriber numbers for the quarter by almost 1 million subscribers.

But then again, NFLX stock is trading at a PE of 157. That’s higher than AMZN’s. And it was even higher before the selloff.

The simple fact is, NFLX still has plenty of the world to conquer and its focus on content around the globe will be an asset it can monetize long after it subscribes everyone it possibly can to its services.

Right now, its big push is in India, where there are over 1 billion people. It has already started developing original content for the country and is hoping to break through in coming quarters.

Best Stocks to Buy Now: SVB Financial (SIVB)

SVB Financial Group (NASDAQ: SIVB) is an interesting new iteration of traditional banks.

Say you have a small bank where most of your customers come from Silicon Valley and the tech start-up culture (and money). You get depositors that are looking for opportunities in start-ups and you have cash to lend to these small businesses.

Plus, your customers are the people who have track records of successfully starting new firms. It’s like building a private investment bank focused on a specific sector.

SIVB is now expanding its operation up the West Coast to Washington state, where a similar culture exists and to other tech cities around the country.

Best Stocks to Buy Now: Arista Networks (ANET)

Arista Networks Inc (NYSE: ANET) was on quite a roll for a while. While year to date it has managed about an 11% gain, for the past 12 months it has delivered a 52% return to its investors.

ANET is cloud computing company that has become a major competitor to some of the bigger players in the networking and storage space. And with a $20 billion market cap, ANET is big enough to grow on its own, or it could be an acquisition target for one of its big competitors or a big tech firm looking to buy a spot in the space.

The problem with the legacy players in the space is they can’t reinvent the systems they already have in place. ANET provides much cleaner and less cumbersome solutions because it doesn’t have to worry about all the legacy hardware it needs to support and transition.

This slow time is a good time to get in for the long run.

Best Stocks to Buy Now: Ligand Pharmaceuticals (LGND)

Ligand Pharmaceuticals Inc (NASDAQ: LGND) is a new breed of pharmaceutical company.

In the old days, a biotech or pharmaceutical company would have an R&D division looking for new drugs, a team that would do early-stage development and reformulation, a team for late-stage development, another for testing and trials, and another for commercialization or partnering strategies.

But as the industry got bigger, all these divisions became expensive and costly to manage. And things got lost in the pipeline.

LGND focuses on the discovery, early-stage development, reformulation and partnering. That keeps it laser focused and cuts out all that work for its partners who handle the backend.

And given LGND stock is up 82% in the past year, this strategy is not only working, but it has a lot of believers.

Best Stocks to Buy Now: Inogen (INGN)

Inogen Inc (NASDAQ: INGN) makes portable oxygen concentrators. While that doesn’t seem like it’s a big business, it has given INGN a $4 billion market cap as one of the leaders in the sector.

Traditionally, people with breathing issues have had to haul around oxygen tanks. They’re really heavy and aren’t exactly easy to get around with, especially for people that are older and less agile than they used to be.

It’s an inelegant and difficult solution to the problem. INGN’s concentrators are game-changers. They can be easily carried around and home units are also easily moved.

They basically convert the ambient air into concentrated oxygen, so you don’t have to haul a tank around. You just charge the unit and go.

As America grays, this type of equipment has growth path for decades to come. Its up 130% in the past 12 months and 75% year to date.

Best Stocks to Buy Now: Medifast (MED)

Medifast Inc (NYSE:MED) is part of one of the hottest trends out there that doesn’t have to do with technology — prepackaged health and nutritional foods.

You’ve heard of Weight Watchers (NYSE:WTW) and Jenny Craig. Well Medifast has been around a long time as well, and it’s starting its own growth trend, even without Oprah.

MED stock is up a whopping 405% in the past 12 months and 207% year to date.

And the crazy thing is, you don’t really hear about this stock. What’s more, after all that massive growth, the stock is still trading at a PE of 76, half of that of NFLX or AMZN.

Best Stocks to Buy Now: Micron (MU)

Micron Technology (NASDAQ: MU) is memory maker. And I don’t mean that it makes life memorable. It makes memory chips, especially the new generation of flash memory chips.

Certainly there are other bigger chipmakers that make memory chips and much more. But MU is focused on this major sector. And is leveraged to its growth.

Many are coming to believe that this sector’s cyclical nature has been uprooted by the fact that the mobility revolution as well as the advent of cloud computing, Big Data, augmented/virtual reality and the Internet of Things. Demand has become less cyclical and more of a constant, which will have a significant effect on MU, as a leader in this sector.

MU stock is up almost 90% in the past year and 28% year to date. And this is with some in the industry still thinking the cyclical nature of the past will somehow reassert itself. Don’t count on it.

Louis Navellier is a renowned growth investor. He is the editor of five investing newsletters: Blue Chip Growth, Emerging Growth, Ultimate Growth, Family Trust and Platinum Growth. His most popular service, Blue Chip Growth, has a track record of beating the market 3:1 over the last 14 years. He uses a combination of quantitative and fundamental analysis to identify market-beating stocks. Mr. Navellier has made his proven formula accessible to investors via his free, online stock rating tool, PortfolioGrader.com. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.

Strong Buy Stocks: Rigel Pharmaceuticals (RIGL)

Our first Strong Buy stock pick Rigel Pharmaceuticals (NASDAQ:RIGL) is also the cheapest. Trading at just $2.98, this biotech offers investors massive upside potential of over 165%. This would take shares to $7.90, the average analyst price target. Most recently, HC Wainwright’s Joseph Pantginis reiterated his Buy rating with a $7.50 price target.

He cites two key bullish factors supporting his rating: 1) the potential for Rigel to expand R835 into multiple autoimmune disorders, including arthritis and MS; and 2) the ramp up of newly-approved drug Tavalisse for adults with chronic immune thrombocytopenia (ITP). This is a dangerous disorder that can lead to excessive bleeding and bruising.

According to Pantginis, Tavalisse is “making early strides.” He notes that the drug is still in the “show-me” stage of launch for investors. However, the early signs are promising. The drug is priced competitively and it has the backing of a comprehensive commercial strategy. This includes educating physicians on the significant clinical benefits of Tavalisse vs. current treatments and maximizing awareness and access for patients.

Overall, five analysts have published Buy ratings on RIGL in the last three months.

Strong Buy Stocks: Glu Mobile (GLUU)

San-Francisco based Glu Mobile (NASDAQ:GLUU) is most famous for its slew of celebrity mobile app games. Ever heard of Kim Kardashian: Hollywood? This was GLU’s handy-work. However, the company is much more than just a one-hit wonder, according to Piper Jaffray’s Michael Olson. He has initiated coverage on GLUU with a $7.50 price target (19% upside potential). The stock is currently trading at $6.31.

“We now see a path to continued multiple expansion and margin improvement based on the changes implemented to date,” the analyst said. “While new titles are less critical for the ongoing growth of the business than was historically the case, Glu does have a solid pipeline of new games that are expected to hit in [the second half of 2018] and 2019.”

And while these new releases are encouraging, Olson is most enthusiastic about GLUU’s existing user base: “This data allows the company to better allocate resources to content updates that will drive monetization; it also creates a widening competitive barrier to entry vs. many other mobile developers.”

Right now, four analysts have Buy ratings on the stock. This is based only on ratings from the last three months.

Strong Buy Stocks: Resonant (RESN)

Small-cap tech stock Resonant (NASDAQ:RESN) is a designer of filters for radio frequency (RF) front-ends for smartphones. This is basically the circuitry in mobile phones for analog signal processing. And the stock is on the cusp of big growth according to the Street.

Five-star Loop Capital analyst Cody Acree sees RESN exploding by a whopping 107%. He has initiated coverage with a Buy rating and $11 price target. “We believe the company continues to make significant fundamental customer and design win progress that should begin delivering material recurring royalties through the remainder of 2018”, writes Acree.

Specifically, he is a fan of the company’s unique Infinite Synthesized Network platform technology. This is “a software-based, high-precision modeling approach that is able to produce real-world testable results in a completed design”, explains Acree. Customers can now eliminate software design flaws before wafer production begins.

The best part is that this should prove much more “attractive to the market than the traditional method of running multiple physical iterations through a wafer fab”. Indeed, RESN boasts four recent Buy ratings from the Street. These analysts have an average price target of $8.25 (55% upside potential).

Strong Buy Stocks: Achaogen (AKAO)

Achaogen (NASDAQ:AKAO) now looks like a very compelling investing opportunity, as this cheap Strong Buy stock just got cheaper. And now is the perfect time to jump in.

AKAO develops innovative antibacterials to treat multi-drug resistant infections. At the end of June its Zemdri drug received regulatory approval for the treatment of complicated urinary tract infections. However, this prompted a sell-off. Investors were disappointed that the drug did not also receive approval for CRE bacteria infections.

But analysts quickly reiterated their support of AKAO, calling the sell-off “excessive.” “We see the sell-off in AKAO from already markedly discounted levels as overdone and see attractive opportunity”, writes Cowen & Co’s Chris Shibutani. He says this is what he expected in terms of the timing and label following the advisory review. Plus, this is by no means the end of the road for AKAO and CRE. “We expect real-world use in CRE even in the absence of a formal label given clinical/microbial data”, adds Shibutani. He reiterated his Buy rating without a price target.

However, we can see that other analysts are predicting massive upside potential of 144%. This would take AKAO from $7.78 to the $19 average price target. In total, the stock has received six buy ratings vs. just 1 hold rating in the last three months.

Strong Buy Stocks: Zynga (ZNGA)

Social game developer Zynga (NASDAQ:ZNGA) has just snapped up Gram Games for $250 million in cash. This makes the stock even more attractive to investors. London-based Gram Games has two key franchises in the hyper-casual and puzzle genres: Merge Dragons! and 1010. Merge Dragons! is particularly promising with the potential to become a forever franchise.

Indeed, top Jefferies analyst Timothy O’Shea is certainly bullish on the deal. He writes: “It is another acquisition straight out of the Zynga playbook: acquire established mobile franchises at a reasonable multiple, and apply sophisticated user acquisition, analytics, and live services know-how to increase profitability and extend the life of the games.”

Even better, “The deal is immediately accretive and we think it makes sense to deploy cash towards EBITDA-generating M&A vs. leaving cash on the balance sheet.” With this in mind, he ramps up his 2019 bookings & EBITDA estimates by 9%. He also boosts his price target to $5.25 (24% upside potential) from $5 previously.

Five analysts have published Buy ratings on Zynga in the last three months, with just one analyst staying sidelined.

Strong Buy Stocks: GenMark (GNMK)

GenMark Diagnostics (NASDAQ:GNMK) develops state of the art molecular diagnostic testing systems. Its eplex system has just been released and it has already won an award for medical design excellence. Right now, the system can only test for and identify the most common respiratory viral and bacterial organisms. However, other panels in development will test for blood diseases, gastrointestinal bacteria and central nervous system infections.

All eyes are currently on the recent blood disease regulatory submission. “We are positive on GNMK following the submission of its blood culture ID gram positive (BCID-GP) panel to the FDA, which comes in line with expectations”, writes top Canaccord Genuity analyst Mark Massaro. “We view GNMK’s submission to the FDA as a de-risking event.” He is now more confident that GenMark can generate meaningful ePlex revenue outside of its respiratory panel in 2019.

And long-term, the prospects are even more exciting: “We continue to believe that GNMK can penetrate the multi-billion-dollar global multiplex syndromic testing panel market with multiple ePlex test panels over time.” This five-star analyst has a $9 price target on the stock (29% upside potential). Three analysts have published recent GNMK Buy ratings with a $10.33 average price target.

Strong Buy Stocks: Ferroglobe Plc (GSM)

Ferroglobe PLC (NASDAQ:GSM) is among the world’s largest producers of silicon metal. Silicon is a critical ingredient in a host of industrial and consumer products with growing markets. In the chemical industry it is used in photovoltaic solar cells and electronic semiconductors. And aluminum manufacturers use it to improve the already useful properties of aluminum. When used with aluminum, silicon improves its flexibility, hardness and strength.

With demand dynamics on its side, the company is a bargain at just $8.30. Indeed, three analysts have published recent Buy ratings on GSM. This is with a very bullish $16.33 average analyst price target. From current levels that indicates upside potential of 97%. Plus management has just initiated an interim quarterly dividend of 6-cents-per-share (2.1% yield), reflecting confidence in the underlying business.

Strong Buy Stocks: Cleveland-Cliffs (CLF)

From silicon let’s turn to the world of iron ore. Cleveland-Cliffs (NYSE:CLF) is buzzing right now with shares shooting up over 26% in the last three months. But this success story isn’t slowing down, in fact its just beginning. Top B. Riley FBR analyst Lucas Pipes has just ramped up his price target from $11 to $12 (41% upside potential).

He cites higher domestic steel prices, higher iron ore prices and a robust pellet premium — all of which are likely to boost 2018 EBITDA and cash-flow expectations. “Longer-term, the robust price backdrop holds the potential to improve the outlook of Cliffs’ existing domestic iron ore mines and ongoing HBI development”, writes Pipes.

And shareholders should note that capital return could be on the agenda. CLF also mentioned it may establish a dividend, but if this comes it will be in 2019. Management intends to generate about $100M in 2018 FCF while 2019 should be ~$200M. Pipes concludes: We remain upbeat on growth project, strategic direction and valuation.

Overall, CLF has received five recent buy ratings with a $10.30 average analyst price target (21% upside potential).

Strong Buy Stocks: Seres Therapeutics (MCRB)

Biotech Seres Therapeutics (NASDAQ:MCRB) is a perfect stock for any bargain hunters. The company is focused in the emerging field of microbial medicine. Basically, Seres is trying to treat infectious and inflammatory diseases by adding “good” bacteria to your digestive tract.

“We believe the company is well positioned to take advantage of their pioneering efforts in understanding microbiome biology and applying those learnings to human disease management”, writes top Cantor Fitzgerald analyst William Tanner. He has a $16 price target on the stock (73% upside potential). He isn’t concerned about regulatory setbacks as investors should “recognize that the results could provide clues as to how the course could be corrected.”

According to Tanner, SER-401 could be where the pipeline sizzle is. Seres is developing SER-401 to impact the immune response and increase the efficacy of inhibitors in cancer treatment: “Evidence has been emerging that the microbiome may play an important role in immune system modulation.” Seres plans to initiate clinical testing of SER-401 in 2018.

With four recent buy ratings, the $18 average analyst price target indicates over 95% upside potential.

Strong Buy Stocks: LendingClub (LC)

Our tenth cheap stock pick comes from the financial sector. U.S.-based LendingClub (NYSE:LC) is one of the first peer-to-peer lending companies. While the stock has previously given investors a choppy ride, the future looks more stable according to five-star BTIG analyst Mark Palmer. He has a $7 price target on the stock (58% upside potential).

“Investors should be more optimistic about reduced volatility in LC’s operating performance in coming quarters”, advises Palmer, adding that they should also “be less pessimistic about how the company’s marketplace lending platform would fare if a repeat of the market dislocations seen in 2016 were to occur.”

Palmer has just met with CEO Scott Sanborn who stressed how the funding model has become much more diversified. This makes the company much more resilient. “This newfound resilience was due in large part to the introduction of new sources such as securitizations and CLUB certificates — pass-through securities holding a basket of loans — that provided LC with access to a new group of large institutional investors”, explains Palmer.

LendingClub has 100% Street support right now. Five analysts have published recent Buy ratings with a $5.80 average price target (32% upside potential).

Source: Investor Place