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Money-Making Stock to Buy

Money-Making Stocks to Buy: Baidu (BIDU)
baidu stockI highly recommend checking out Baidu Inc (ADR) (NASDAQ:BIDU), China’s No. 1 search engine. With a Q1 beat and very strong Q2 guidance, this is a top stock to track right now. “The beat was attributed to a series of AI-driven efforts including dynamic ads, which has been described as increasing click-through rates by double digits” explains top Wells Fargo analyst Ken Sena.

He is feeling so encouraged by the company’s outlook that he ramped up his already-bullish price target by $10 to $310. This suggests 22% upside potential. According to Sena, “Baidu’s share currently trades at 24x Adj. 2018E EPS of ¥67.20/$10.59, making it attractive among our Outperform-rated names, particularly when considering the industry leadership it is showing within AI, both as it applies to core (Search, Feed), video, and new initiatives (Apollo, DuerOS).”

Top Oppenheimer analyst Jason Helfstein agrees. He believes Baidu is still undervalued compared to Google, especially when you consider that BIDU is in prime position for the rapid growth of China’s online ad market. “We think key drivers include increasing number of paid clicks, higher conversion rates and higher cost-per-click (CPC). The penetration of smartphones in China, especially in lower tier cities, provides another strong revenue stream for BIDU as it starts to monetize mobile search separately” comments the analyst.

He has a $295 price target on BIDU. Bear in mind that Helfstein’s strong track record on BIDU stock specifically (87% success rate and 21.1% average return per rating) further reinforces the credibility of his latest recommendation.

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Money-Making Stocks to Buy: Merck (MRK) Our second money-making stock, Merck & Co., Inc. (NYSE:MRK), is one of the world’s largest pharma companies. MRK delivered revenue in 2017 of over $40 billion. The pharma giant is seeing the dollars roll in from its best-selling cancer drug Keytruda. This isn’t surprising given that the drug currently costs a whopping $150,000 per patient per year.

The company has just announced positive Q1 earning results, revealing an unexpectedly robust performance of key franchises outside the U.S.

“Keytruda’s beat reflects Merck’s strong commercial execution. Januvia and Gardasil’s strong demand in ex-US (e.g., China) should also drive growth in the near term” comments top BMO Capital analyst Alex Arfaei. He calls the execution and R&D on Keytruda ‘excellent.’

Investors should keep a close eye on data presented at the upcoming ASCO annual meeting in June advises Arfaei. This will be ‘the next catalyst’ which “should further strengthen the drug’s lead in lung cancer, raise expectations in other tumors, and provide insights on the next set of Keytruda combo data (e.g., with Lenvima).” He has a $70 price target on “Strong Buy” rated MRK (22% upside potential). Indeed, in the last three months, MRK has received four consecutive buy ratings from top-ranked analysts.

Note that Merck is also a top dividend stock. The company pays an impressively high dividend yield of 3.36%. With six straight years of dividend growth under its belt, Merck’s latest quarterly payout came to $0.48 in April.

 

Money-Making Stocks to Buy: Alexion Pharma (ALXN)

Source: Alexion Pharmaceuticals
US pharma stock Alexion Pharmaceuticals, Inc. (NASDAQ:ALXN) is best known for rare blood disorder drug Soliris. So far this drug has proved extremely successful. Now the company is looking to expand Soliris into new treatment opportunities, including for Generalized Myasthenia Gravis (gMG). This is a chronic autoimmune neuromuscular disease that causes weakness in skeletal muscles.

Five-star Cowen & Co analyst Eric Schmidt calls Alexion a ‘top pick’. He is looking forward to the new possibilities for Soliris in gMG. “We think a favorable financial outlook, strong launch for Soliris in gMG, and increased confidence in ALXN1210’s profile could position ALXN shares for a potential re-rating as investors gain confidence in the growth and durability of the company’s complement franchise,” Schmidt told investors on April 26.

Indeed, the gMG launch is now on track to be the drug’s best-ever launch says Schmidt. He estimates that gMG sales might have reached between $20-25 million. Bearing in mind solid Q1 financials and strong underlying demand trends, Schmidt predicts upside potential of 40%. This would take shares all the way from $118 to $163.

Overall, ALXN demonstrates an overwhelmingly positive outlook from the Street. In the last three months, 14 out of 15 analysts have published ‘Buy’ ratings on ALXN. Their average price target of $157 is 33% above the current share price.

Money-Making Stocks to Buy: Nvidia (NVDA)
NVIDIA Corporation (NVDA) Stock Is at a Serious Tipping Point
Source: via Nvidia
Nvidia Corporation (NASDAQ:NVDA) has received a slew of bullish calls from the Street in the last month. All eyes are on the chip giant right now ahead of its first quarter earnings results on May 10. “Expect beat/raise … We remain positive on NVDA ahead of Q1 results,” five-star Bank of America analyst Vivek Arya told clients on May 7.

“In our view, FQ2 sales outlook can be at-least inline or better than consensus from continued data center strength, start of Nintendo Switch sales, workstation demand, and shift of GPU sales to gamers from miners” this five-star analyst added. He is predicting that prices can soar to $300 from $248 currently.

And the longer-term outlook for NVDA is even more impressive given its ‘unparalleled strength’ in both auto and AI. Top Goldman Sachs analyst Toshiya Hari advises investors not to be alarmed by any short-term choppiness: “Despite the potential near-term volatility, our long-term thesis on the stock is intact — we continue to see Nvidia as one of the best-positioned companies in the Semiconductor space with exposure/leadership in AI, PC gaming, and further down the road in L4/5 autonomous cars.”

SunTrust Robinson’s William Stein agrees. He believes shares have 23% upside right now (which would take shares to $305) and sees huge potential for NVDA in the self-driving space. Meaningful revenue from autonomous driving should hit in the next 2-3 years advises Stein. As a result, he urges investors to buy any weakness.

Money-Making Stocks to Buy: McDonalds (MCD) I recommend taking a closer look at “Strong Buy” stock McDonald’s Corporation (NYSE:MCD) . The fast food chain has a top rating from the Street in general, with a $187 average price target (13.6% upside potential). Following a Q1 earnings beat, the Street swooped in with bullish moves: Goldman Sachs added the stock to its Conviction Buy list; BMO Capital ramped up its price target $5 to $195; as did RBC Capital (from $170 to $175).

RBC Capital’s David Palmer explains that “a better business is worth a consumer staple multiple.” Looking around the corner, Palmer anticipates rapid free cash flow (FCF) growth with FCF conversion of 105%+ by 2020. He explains: “Over the next few quarters, we believe digital and delivery initiatives, more effective value marketing, product renovation, improving operational focus, and asset improvements can re-accelerate sales growth.”

Right now McDonald’s is in the process of bringing fresh cooked-to-order beef patties to all of its U.S. restaurants. “They wanted a hotter and juicier Quarter Pounder, and we wanted to deliver it to them,” says MCD’s manager for Michigan and Oregon. Just switching to fresh beef and delivery alone could each bolster same-store-sales growth by as much as 3-4% when fully rolled out.

And what could be juicier than a fresh Quarter Pounder? A top-rated Dividend Aristocrat. MCD boasts a lucrative quarterly dividend payout of $1.01 on a 2.45% yield. Back in September, the board of directors approved a sizable payout increase of 7% — it’s 41st straight dividend increase.

Money-Making Stocks to Buy: AutoZone (AZO)

Auto parts retailer AutoZone, Inc. (NYSE:AZO) is known as one of the ‘steadiest performers’ in the auto parts retail space. And now the stock has received a big thumbs up from Goldman Sachs’ Matthew Fassler. On May 7 Fassler added AZO to its ‘Conviction Buy’ list. This is a group of elite stocks that the firm expects will outperform the market.

Following a ‘more normative’ winter of 2017-2018, Fassler expects a ‘solid’ summer season as auto parts de-thaw. This can create parts failure — boosting AZO sales. At the same time, sales of auto parts correlate with cars over 10 years old. In 2019 this segment will become more evident as the “last stages of the hangover” from the 2009 financial crisis hit predicts Fassler.

The best part is that AutoZone boasts a “rich” free cash flow yield of 8.5% on 2018 estimates and 8.3% on 2019 estimates. Plus AZO is trading near the low end of its recent historical relative P/E range right now. Note that AutoZone is also a top pick at Fenimore Capital Asset Management.

Interestingly, our data shows AZO as a ‘Moderate Buy’ stock. However, if we limit recent ratings to only those from the best-performing analysts, this consensus shifts to ‘Strong Buy’. Meanwhile, the average price target from these analysts of $819 indicates big upside potential 26% from current levels.

 

Money-Making Stocks to Buy: MasterCard (MA)
Mastercard Stock

Last, but by no means least, we have online payments giant MasterCard Inc (NYSE:MA). Can this company do no wrong?! Our data shows that MasterCard has 100% support from the Street right now. In the last three months, this breaks down into 11 back-to-back buy ratings. These analysts have an average MasterCard price target of $204 (8% upside potential). Mastercard is the “most innovative and competitively advantaged payments ecosystem participant” with an “impressive” core business trend, writes SunTrust’s Andrew Jeffrey.

Right now analysts are digesting the latest set of positive earnings results. “We like Mastercard’s ability to grow faster than peers and its potential to expand margins. Results for 1Q18 were above expectations, with solid growth across all segments,” cheers Cantor Fitzgerald’s Joseph Foresi. MA reported solid growth across all segments with gross dollar volume growth of 19% year-over-year. For comparison, rival Visa reported 15% y-o-y dollar growth. On the back of these results, MA increased its 2018 revenue guidance range to high-teens from the mid-teens.

This isn’t some kind flash-in-the-pan success either. Foresi states that: “We remain attracted to Mastercard’s card network and strong products and solutions, which should continue to drive solid performance.” Accordingly he boosts his price target from $198 to $213 (13% upside potential).

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Source: Investor Place

7 Hot IPOs Yet to Come in 2018 and Beyond

Source: Shutterstock

You can’t buy them … at least not yet. Possibly soon, however.

What’s that? Initial public offerings that are in the works, but not quite yet ready for the market. There’s an interesting list of names investors have been eyeing for a while now, waiting for the day they’d complete their respective IPOs and become publicly traded entities.

Yes, this list includes outfits like the oft-ballyhooed ride-sharing service Uber, though it also includes organizations like the more obscure Acquia, which provides cloud-based business software. Just like their already-trading brethren, there’s a little bit of everything in the next round of public offerings.

That being said, seven of these potential publicly traded stocks are more interesting than the rest. Here’s a preview of those companies, should they actually go through with their suggested IPO plans.

In no particular order…

Should You Buy Uber Shares? It Depends on This...

Source: Shutterstock

Hot IPOs to Come: Uber

Truth be told, a bunch of investors are surprised ride-hailing organization Uber hasn’t gone public yet; the idea has been floating around for a couple of years now.

On the other hand, in light of the company’s public stumbles of late, perhaps Uber knows it would be a “tough sell” to prospective investors. Namely, now-former CEO Travis Kalanick was indirectly implicated in sexual harassment allegations, but was also at the helm at a time when the company hired drivers with criminal records.

For an organization that is not yet profitable (and which may never actually become profitable), asking investors for more funding now might not work very well this soon. Later this year or early next year, however, investors will likely have forgiven and forgotten.

Source: Shutterstock

Hot IPOs to Come: Ancestry.com

You know the company. Ancestry.com not only sells access to a platform that lets people track down their ancestors, but now also offers DNA testing that will help identify where an individual’s ancestors came from, in terms of geography. It has been a hot business for a while now, and the market only continues to grow.

That’s why the company almost went public in the latter half of last year, starting to talk with investment banks that would take care of the underwriting. At the proverbial eleventh hour, though, then-CEO Tim Sullivan stepped down, prompting the postponement of the initial public offering.

There’s some speculation he resigned and the company delayed the IPO because growth was slowing; a corporation generally wants to seek funding while it’s firing on all cylinders. Its former growth pace may well re-materialize before the end of the year.

Hot IPOs to Come: Pinterest

Conceptually speaking, the idea of a website that simply lets you collect digital images of things you’re interested in and pin them to a virtual bulletin board seems silly. There are 175 million regular users of the Pinterest platform, however, that seem to have become addicted. More are added all the time.

What has not quite happened yet is the degree of monetization the organization was hoping for. It set a target of $500 million in revenue for last year, but when it came up short it reportedly prompted the company to postpone the public offering it had planned for 2018.

Those plans may be accelerated, however, if the hiring of the company’s first-ever COO is any indication. Former Square Inc (NYSE:SQ) and Alphabet Inc (NASDAQ:GOOG, NASDAQ:GOOGL) executive Francoise Brougher may inject just the discipline Pinterest needs to get over its fiscal hurdles.

Source: Shutterstock

Hot IPOs to Come: BuzzFeed

BuzzFeed, the news (and sometimes not-so-newsy) website is near the top 200 visited sites in the world, and in the top 100 in the United States. That’s enough to generate roughly $300 million in revenue last year, most of it coming from ad sales. In fact, the company was prepping an IPO last year for this year.

That work was halted, however, when BuzzFeed fell short of its 2017 revenue goal that would have made it an easier sell to investors. The idea didn’t go away though. In fact, the Wall Street Journalreported in November “One person close to BuzzFeed said the performance reflects a more general malaise this year in ad-supported media businesses and isn’t particular to the company.”

In the meantime, note that revenue is actually still growing for the company, even if not as much as hoped.  If the web’s traffic undertow perks up again, BuzzFeed is apt to strike while the proverbial iron is hot.

Xiaomi Mi6

Hot IPOs to Come: Xiaomi

Ironically, though Xiaomi is probably the least familiar name of potential public offerings for U.S. investors to keep on their radar, it’s arguably the most compelling growth prospect of the bunch.

Xiaomi is, among other things, a smartphone maker. Its wares are still a little bit tough to buy in the U.S., though that’s slowly changing.

In the meantime, its phones, cameras, televisions and fitness bands are all become popular in China thanks to their high-quality at a low price. During the fourth quarter of last year, its share of the worldwide smartphone market nearly doubled from 3.6% to 6.9%.

That’s still relatively small compared to the likes of the iPhone from Apple Inc. (NASDAQ:AAPL) and comparable smartphones from Samsung Electronics (OTCMKTS:SSNLF). Growth opportunities are relative though, and this young-ish Chinese company is starting to make waves that could bode well for an IPO many people say is coming this year.

Source: ©iStock.com/bestdesigns

Hot IPOs to Come: 23andMe

Even if you only watch a little bit of television, you know this company as well as you know Ancestry. 23andMe offers genetic testing that lets you identify you’re cultural and geographic heritage.

It’s not just a matter of satisfying curiosity though — 23andMe also offers an analysis of your DNA that will help determine your genetic predisposition to certain health problems. There’s not always something that can be done to completely prevent those diseases and illnesses, but knowing is half the battle.

More important to investors, the whispers that the company is coming to a public-trading exchange near you are circulating again.

That hasn’t always been the case. In September of last year the company raised $200 million in private funding, implying a company value of $1.5 billion. The usual next step, however, is a public offering that ultimately allows initial investors a chance to ‘cash out’ of their stake by creating a market of retail investors.

Hot IPOs to Come: Acquia

Last but not least, add Acquia to your IPO watchlist.

The average consumer/investor won’t be familiar with it. Acquia offers a cloud-based platform that lets companies offload the headache of content management, app hosting and e-commerce.

It’s not a bad business to be in, though it’s a hyper-competitive one. That may be why it has not initiated a public offering yet — the company knows it has to decidedly differentiate itself, and its core website-building platform called Drupal is simply unpopular relative to the web’s use of rival platform WordPress.

A relatively new CEO may be just the shake-up Acquia needs though. Michael Sullivan, who took the helm in November, has the right experience, and looks poised to turn the company into an outfit that’s ready for the IPO that’s been discussed as far back as 2015.

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Source: Investor Place

2 Semiconductor Stocks to Sell and 1 to Buy Because of China

Did you know that President Trump is China’s best friend? The reason though isn’t so obvious… he unknowingly is pushing China to expand even faster and push even harder into technology.

Ask any scientist and they will tell you China is catching up fast in fields like quantum computing, virtual reality, robotics, drones, 3D printing, autonomous vehicles, biotechnology and artificial intelligence (AI).  And it already leads in fintech and payment systems.

Now President Trump’s actions are pushing China to quickly develop expertise in semiconductors.

The founder of Alibaba, Jack Ma, recently joined other Chinese CEOs in speaking out on the subject. He said the market for chips is pretty much controlled by America and if it decides to stop selling chips (as the Trump Administration did with regard to ZTE), it results in a major problem. So Ma urged nations like China to develop their own semiconductor industry as fast as possible to get around America’s grip on the industry.

Why China Wants Its Chip Independence

Trump’s actions against the telecommunications equipment firm ZTE have galvanized China’s existing plan to spend at least $150 billion over the next decade to achieve a leading position in chip design and manufacturing. In March, the semiconductor industry was named as the top priority of the 10 industries China wants to foster in its “Made in China 2025” initiative.

But of course, there is a lot more behind China’s move than concern over President Trump’s actions. You see, its annual imports of $260 billion worth of semiconductor-related products is now its biggest import, surpassing even oil. China wants to lower that dependence on overseas (and especially U.S.) semiconductors. Another reason is simply that China wants to move its manufacturing sector toward more high-value products.

And in a mirror-image concern of the Trump Administration, China is worried about breaches of its national security along the lines of the 2013 leaks from Edward Snowden. Those leaks revealed connections between American technology companies and the National Security Agency’s worldwide surveillance program.

China Says ‘Try, try again’

This is not the first time China has tried to build a semiconductor industry. It failed before in the 1990s to start an industry from scratch.

But things may be different this time around. This time it has the proper infrastructure. It now has a massive end market for semiconductors and strong global-class players in smartphones, PCs, TVs and automobiles. Chinese brands controlled 50% of the global smartphone market and 36% of the PC and tablet market in 2017, according to the research firm Gartner.

And China now has everything needed for the supply chain, including expertise and personnel from all over the world.

The company that is set to become China’s national champion in semiconductors is Tsinghua Unigroup. That name should be familiar to anyone that follows the chip industry. It made a $23 billion bid for Micron Technology (Nasdaq: MU) and tried to become a major shareholder in Western Digital (Nasdaq: WDC). But those moves were blocked by the U.S. government on national security grounds. So now it is going a different route.

It recently announced the expansion of its partnership with Intel (Nasdaq: INTC). As early as this year, Intel will provide the company with NAND flash memory chips, which will then turn them into various products such as microSD cards and solid-state devices. This may allow Tsinghua to develop into a globally competitive storage product provider.

Tsinghua Unigroup’s affiliate, Yangtze Memory Technologies, is constructing a large NAND memory plant (costing $24 billion) that will start production sometime in 2018 or 2019. Tsinghua also owns a mobile chip company named Unigroup Spreadtrum & RDA. Intel is giving this firm its advanced 5G modems to its mobile chip business forward.

As to why Intel is doing this, the answer is simple. It is still a small player in NAND flash memory chips and mobile chips. So what better way to grow those segments than by gaining access to the world’s largest market? Intel also, in 2014, invested $1.5 billion for a 20% stake in Tsinghua Unigroup’s holding company. So it will benefit if Tsinghua prospers.

Memory Chip Push

The bottom line is that China will begin shipping its first batch of memory chips probably in 2018. But the more advanced 64-layer chips will not likely ship until 2019.

But once it gets going, it will likely cause a major disruption to the memory chip market (NAND flash memory and DRAM memory chips) within three years. Even Apple talked recently with Yangtze Memory about possibly buying some of their chips in the future.

FYI – the NAND flash memory market is a $58 billion market annually and the DRAM memory chip market is a $78 billion annual market.

While China’s move is not good news for Samsung, it is so well diversified it will survive. Other companies will be much more affected including Sk HynixToshibaWestern Digital (Nasdaq: WDC) and Micron Technology (Nasdaq: MU).

Once up and running, and based on its past history, I expect China to flood the memory chips market in three to five years. That will cause a major price drop, hurting the profitability of Micron Technology and Western Digital. I would completely avoid owning these two stocks.

On the other hand, with the close relationship between Tsinghua Unigroup and Intel, I believe Intel will be a great way for American investors to participate in the growing Chinese semiconductor business.

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 

Nintendo Profit Is Up Over 500% on Switch Sales — But NTDOY Is Down

Source: Nintendo

Nintendo Ltd/ADR (OTCMKTS:NTDOY) released its annual earning report for 2017 and it included some staggering numbers. Strong Switch sales drove the company’s profit up more than 500% compared to the previous year. And it’s predicting more growth in 2018. In addition, Nintendo announced a new, younger, president will be taking over from the interim leader.

With the huge numbers released and indications the momentum will continue, you might expect Nintendo stock to get a shot in the arm. However, NTDOY is currently down over 3%.

Switch Sales Drive Massive Nintendo Profit Increase

Nintendo released its annual earnings report for the year ending March 31 2018, and the numbers are phenomenal. Especially when you consider the dark place the company was in just a few years back.

For the year, Nintendo generated $9.66 billion in revenue, an increase of 116% compared to 2016. And while that’s an impressive number, earnings are even more so: $1.62 billion on the year, a whopping 505% increase.

Driving that Nintendo profit were Switch sales. The company reported it sold over 15 million of the portable consoles during the year covered, bringing lifetime sales to over 17.79 million units.  Though it was actually on sale for only a month prior to the start of the fiscal year.

To put that in perspective, its previous generation Wii U console sold 13.56 million units during its entire five-year run. Sony Corp (ADR) (NYSE:SNE) is the leader in this generation of game consoles and its Playstation 4 recently hit 76 million units — but it’s been on sale for four and half years. Those strong Switch sales are the reason why Nintendo stock is up nearly 65% on the year and over 300% since the dark days of the struggling Wii U.

A New President and Momentum

The company didn’t just kill it in 2017, it has momentum.

Nintendo is forecasting that it will sell an additional 20 million Switch consoles over the next year. It also has the red hot Nintendo Labo construction sets that are expected to drive additional revenue while helping to keep Switch sales humming. As a result, Nintendo profit for 2018 is predicted to see growth of 26% for 2018.

That’s not as impressive as the 505% growth the company chalked up from 2017 — and that may have something to do with the Nintendo stock dip after the earnings report. But the company is starting 2018 in much stronger place, so triple digit growth isn’t in the cards.

In addition to the impressive Nintendo profit, massive Switch sales and guidance for 2018, the company also announced a new president.

Current president and CEO Tatsumi Kimishima is stepping down, with Shuntaro Furukawa taking his place. The current president was an interim leader, taking the place of the company’s long-term leader Satoru Itawa who died in 2015. Furukawa is 46 and has served on the Nintendo board of directors. He’s seen as a solid choice whose youth will allow consistency in leadership as the company moves out of recovery mode and moves forward.

Bottom Line for Nintendo Stock

Despite today’s dip, Nintendo stock isn’t exactly a bargain at the moment — although it still has plenty of room for upside compared to its 2007 heights.

But based on today’s earnings announcements, Nintendo profit predictions for this coming year, and the strong product lineup from the company, don’t expect it to be a cheap buy any time soon.

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Source: Investor Place

This Former Hot IPO Stock Could Be Ready To Move

Remember when social media stocks were all the rage? It already seems like a long time ago when the market eagerly awaited any social media company going IPO. Typically the shares were snapped up right away and the stock would soar.

Twitter (NYSE: TWTR) is probably the best example of this fad. The microblogging site went IPO in 2014 and the stock soared above $50 per share. It was still above $50 about a year later. But, by mid-2015, reality hit.

Investors started to figure out that, besides Facebook (NASDAQ: FB), it was very difficult to generate ad revenue growth on social media platforms. As the numbers started coming out, TWTR stock got hammered, dropping below $15 in 2016.

However, when a company has several hundred million users, you can’t just write them off entirely. Lately, TWTR has gotten the attention of the investment crowd again, and is back above $30.

Just last year, we probably had the biggest social media IPO since TWTR, in the form of SNAP (NYSE: SNAP). SNAP’s Snapchat was one of the most popular social media platforms out there, especially for the younger crowd. It also debuted to much fanfare and investor excitement.

You can see where the stock immediately shot up after its IPO. But this time, it didn’t take long for the reality of the numbers to set in. Just like TWTR, the investment community wanted to know how SNAP would monetize its user base. When no obvious answer was forthcoming, the stock dropped.

SNAP has mostly been in the $12 to $16 range for the last year, although it did briefly spike above $20. So is this one-time social media darling about to move again? At least one trader thinks the stock could make a big move… in either direction.

This past week, a trader purchased the May 4th 15 calls and the 14.5 puts with stock trading at $14.88. Buying both calls and puts in the same expiration at the same time, but using different strikes is called a strangle. This particular strangle cost $2.20, which means breakeven points for the trade are $17.20 and $12.30.

That’s a pretty big move in either direction for such a cheap stock. Plus, the trader bought 375 strangles which is over $80,000 in premiums. Why would he or she spend $80k for a two week trade with long odds? It’s all about SNAP’s earnings. The company releases earnings on May 1st, and the strangle buyer is obviously expecting the market to react strongly.

I have no problems with this kind of trade, as long as you keep your quantity low. SNAP is definitely the sort of stock that could move $3 (20%) after earnings. But, you don’t want to use up a bunch of capital on a two-week trade that requires such a sizeable gap.

Instead, this is the type of trade where you buy 1 to 3 lots and hope to double your money. You don’t base your trading strategy off of these kinds of trades. However, it’s not bad to take a flier every once in a while during earnings season if you have strong conviction a stock is going to move, but no opinion on the direction.

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Source: Investors Alley 

7 ‘Strong Buy’ Stocks Bloggers Are Raving About

Like me, I’m sure many of you already follow the ‘strong buy’ recommendations of analysts that receive a lot of attention, analysts that work for leading financial institutions such as Goldman Sachs, Deutsche Bank and Credit Suisse (to name but a few). But there is a completely different group of financial experts who are also capable of delivering robust returns for investors — financial bloggers. So which stocks are bloggers raving about right now?

Here, I combine the wisdom of both financial bloggers and the Street to find 7 top stocks. I used the nifty TipRanks Stock Screener to scan for stocks which have a Very Bullish sentiment from top bloggers and a Strong Buy consensus rating from top analysts. These are the best-performing analysts who consistently outperform the market based on their success rate and average return per rating. You can track these analysts to ensure you are basing crucial investing decisions on analysts who tend to get it right.

From the list generated by these criteria, I picked these 7 compelling ‘Strong Buy’ stocks. Now let’s dig down into just why these top stocks are so popular with online bloggers right now:

Strong Buy Stock: Microsoft (MSFT)

microsoft stockMicrosoft Corporation (NASDAQ:MSFT) has no shortage of supporters right now. And two of the most recent bullish blogger pieces highlight a crucial element of the MSFT story for investors — dividends. Did you know that Microsoft has managed to grow its dividend by 225% in just eight years? Top blogger Valuentum Securities Inc. even wonders if MSFT is setting itself up as a future Dividend Aristocrat. This is the name given to an elite handful of companies that have raised their dividends consecutively for over 25 years.

MSFT’s dividend prowess comes from the fact that this is one of the most cash-rich companies around. Right now the company is sitting on a stupendous cash pile of around $135 billion. These cash flows are partly generated by the extreme success of MSFT’s Azure cloud platform. Top blogger InvestorPlace’s Aaron Levitt praises Microsoft’s renaissance as a cloud company under the leadership of CEO Satya Nadella. He points out that in the last quarter Azure grew 90% year-over-year.

Five-star KeyBanc analyst Brent Bracelin agrees. He picks MSFT as one of his favorite cloud platforms to own in software as:

“The combination of Office 365, Azure and Dynamics 365 not only makes Microsoft the largest cloud platform in the world, but also ranks it as one of the fastest-growing among its Cloud Titan peers.”

Bracelin — one of the Top 50 analysts on TipRanks — reiterates his Buy rating with a $110 price target.

Strong Buy Stock: Alcoa (AA)

 

High-flying aluminum stock Alcoa Corporation (NYSE:AA) is a great buy right now. The stock has the seal of approval from both bloggers and the Street. Indeed we can see that blogger sentiment is 100% bullish with positive articles from publications across the board.

This upbeat mood comes on the back of the company’s stellar Q1 earnings results and guidance. For the quarter, AA announced profit of 77 cents per share and revenue of $3.09 billion. These figures easily exceeded consensus expectations of 70 cents and $3.08 billion respectively. Berenberg Bank explains in its mining report: “The confluence of current events (trade actions, sanctions and supply disruptions) has created highly favorable trading environments for Alcoa.”

Encouragingly, top blogger IP.com’s James Brumley believes that “things could get even better for Alcoa as the year progresses.”  The company is projecting a full-year 2018 global deficit for both alumina and aluminum.

In the recent earnings call, AA revealed that: “Due to delays in projects to expand smelters in China, the Company expects the global aluminum deficit to grow to between 600,000 – 1 million metric tons, up from last quarter’s deficit estimate of between 300,000 – 700,000 metric tons.” Meanwhile global aluminum demand is due to rise 4.25 to 5.25%.

And this tightening aluminum market further strengthens AA’s pricing power. As a result, management has upgraded 2018 guidance and signaled their intention to return cash to shareholders in Q2.

Strong Buy Stock: XPO Logistics (XPO)

Bloggers are raving over transportation hot stock XPO Logistics Inc (NYSE:XPO) right now. And with good reason. With over 95,000 employees, the company is an industry leader in both transportation and logistics. But it is the company’s ‘rock solid’ business that is really getting commentators excited.

Leo Nelissen notes that revenue is growing at a CAGR of 87% since 2014 while EBITA is growing at 157%. These figures are through the roof. He calls the stock a “real winner” (Editor’s note: source is behind a paywall) due to its massive growth spurt across the US and Europe. In fact XPO has huge expansion potential in Europe where it has its eye on the $455 billion European transport segment. Already XPO is the largest provider of truck brokerage and largest owned fleet in Europe.

From a Street perspective, we can also see that XPO boasts 100% buy ratings from best-performing analysts. In the last three months, six top analysts have published buy ratings on the stock. Meanwhile their average price target of $113 indicates just over 8% upside potential from the current share price.

Top Oppenheimer analyst Scott Schneeberger is more bullish than consensus. He sees shares spiking 14% and explains that XPO won $2.8B (annualized revenue) of new business in 2017 with a global pipeline of $3.2B. “Pairing strong business conditions/ the 2017 new business wins, we anticipate high-single digit organic revenue growth in 1Q18, which could persist over the balance of 2018” concludes Schneeberger.

Strong Buy Stock: Applied Materials (AMAT)

Applied Materials, Inc. (AMAT) Stock Is a Screaming Buy Right Now!

This semiconductor stock may be a controversial choice right now but as far as bloggers are concerned, it’s full steam ahead. Share prices in Applied Materials, Inc. (NASDAQ:AMAT) are down from close to $58 on April 17 to just above $51. Weighing on the semiconductor space is China’s plan to boost domestic chip production as part of its ongoing trade tussle with the US.

However, the subsequent pullback in prices has been described as a ‘kneejerk’ reaction by bloggers. Crucially, as blogger Joseph Hargett points out, Chinese semiconductor firms are far behind their US, Japanese and European rivals. “In other words, competition from Chinese chip makers isn’t coming anytime soon, making yesterday’s selloff rather premature,” states Hargett.

Plus with prices at these levels, the Street is now predicting considerable upside potential of over 42%. This would take shares to over $72. Nine analysts have published buy ratings on AMAT recently — so no hold or sell ratings here. Analysts are confident that demand for DRAM chips remains favorable with “upward memory spending pressure.”

One of these analysts is TipRanks’ Number 2 analyst, Craig Ellis from B.Riley FBR. He recently reiterated his AMAT buy rating with a $77 price target. “We believe AMAT’s +100% dividend boost and $6.0B share buyback hike to $8.8B exemplify confidence in fundamentals sustainability and growth execution,” writes Ellis.

Strong Buy Stock: Align Technology (ALGN)

ALGN Stock Will Clear $300 After Earnings

Source: Shutterstock

Global medical device company Align Technology, Inc. (NASDAQ:ALGN) wins the award of top-performing S&P 500 stock in 2017. Shares shot up in the year from $96 to $223 during the year. The company is pioneering a new wave of teeth straightening technology with its popular ‘clear aligners.’ So say goodbye to the high school movie makeover, because this is fast becoming an increasingly feasible alternative to traditional braces.

“We’ve seen a maturation of Invisalign’s clear aligners over the past decade,” explains Robert W Baird analyst Jeff Johnson. “They went from a product that was passable for some patients but not good for all back in 2011, to a product that by mid-2016, had orthodontists saying ‘I can use this technology in most cases.’”

Luckily for investors it seems like Align’s growth spurt is only just beginning. Top-ranked blogger Keith Speights believes Align has the power to double again over the next couple of years. First of all — even with the rapid uptake — the company still only accounts for 11% of the global orthodontics market. This means its expansion potential is huge. And at the same time, aligners are currently usable in only 65% of teeth misalignment cases. Align wants to take this figure to 80%.

The stock is also a top pick from the Street. Note that Goldman Sachs has also just selected Align as one of its 30 buy-rated high dispersion stocks. This means that it boasts “micro driven, idiosyncratic returns” not dictated by the general market forces. Good news when the market is as choppy and unpredictable as it is right now.

Strong Buy Stock: Home Depot (HD)

Home Depot Inc (NYSE:HD) is a key beneficiary of the housing market upswing. A recent report by CoreLogic reveals that US house prices are peaking again. The average home price is now 1% higher than it was in 2006, the report said — with the greatest improvement in West Coast states.

According to TipRanks, this home improvement chain store boasts a 91% bullish blogger rating right now. This works out way more bullish than the average services sector stock. Indeed, just a couple of days ago, five-star blogger Valuentum Securities Inc. described Home Depot as ‘building for the long haul.’ The financial blogger continued:

“We find Home Depot’s comparable store sales numbers highly impressive, but we find its return on invested capital (ROIC) targets downright amazing.” Indeed, its targeted ROIC stands at a very impressive 40%.

Meanwhile Morgan Stanley’s Simeon Gutman sees the stock spiking a further 19%. He is betting on the stock following ‘reassuring’ meetings with Home Depot management. Gutman told clients:

“Our meetings reinforced several strengths of the story: a favorable macro backdrop, an ability to take market share through differentiation, investing for the future, and organizational cohesion that increases productivity and efficiency while minimizing execution risk.”

Strong Buy Stock: Booking Holdings (BKNG)

Source: Shutterstock

Last, but by no means least, we have this extremely promising online travel company. Andres Cardenal is one of the Top 100 bloggers out of over 6,400 tracked by TipRanks. On April 10 he sets out why he is such a fan of the Booking Holdings Inc. (NASDAQ:BKNG) — formerly known as Priceline.com. I particularly like this point “the company makes massive amounts of money.” (Editor’s Note: Paywall)

This is borne out by the facts — Booking was making $1.88 billion in revenue in 2008, fast forward ten years, and the Street is looking for $14.18 billion in revenue this year.

In fact, Booking has just disclosed a total of 28MM listings on its platform, of which 5.2MM listings are Alternative Accommodations. As a result, Booking now exceeds Airbnb’s ~4.85MM, to become the leading supplier of alternative accommodations. This trend is set to continue according to Mizuho Securities James Lee. He has recently initiated BKNG with a buy rating.

Even though the stock is already trading at $2,140 he sees big upside potential of 20%. This means we are looking at prices around the $2,600 mark. Lee believes Booking will continue to gain “disproportional” market share due to its “industry-leading expertise” in performance marketing. In fact, out of the 16 recent analyst ratings on the stock, 13 are bullish with only 3 analysts staying on the sidelines.

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Source: Investor Place

Big Oil Bets Big on Big Data to Increase Revenues and Cut Costs

President Trump is not the only one using the words “mission accomplished”. On April 13, the International Energy Agency (IEA) said that OPEC could use those words in its battle to reduce the global glut of oil that had been a problem since 2015.

The IEA said oil stockpiles had dropped dramatically over the past year and could dip below five-year average levels in the coming months. Lowering inventories to that level was a main target for OPEC and Russia when the two countries began to curb output in 2017 to balance an oversupplied market and bolster oil prices.

Falling inventory levels and rising geopolitical tensions in the Middle East combined to push oil to its biggest weekly advance, in the week ended April 13, in eight months – up nearly 8% – and it is still trading at the highest level since late 2014.

But that isn’t the big news in the oil industry. Instead, the real news is the effect that Big Data is having on transforming the entire oil industry.

Big Data, Big Results

The oil industry is finally starting to adopt the latest innovations in information technology. And it certainly needed to change. In late 2014, MIT Sloane Management Review and Deloitte scored the oil and gas sector’s “digital maturity” at only a 4.68 out of 10.

Techniques such as advanced data analytics – used by tech titans like Amazon and others to disrupt any number of consumer-related businesses, are now being applied to the energy industry. The end result should be similarly dramatic.

The opportunities being opened up by adoption of these techniques include analysis of rocks to target oil well placement more precisely in oil-bearing areas, oil reservoir models and seismic analysis to allow production to be maximized through the lifetime of an oil field, and automation along with predictive maintenance that can make oil field operations more efficient and cheaper while also enhancing worker safety.

There is the hardware side of this technological innovation too. For example, the Chevron Tengiz oil field in Kazakhstan, that will start production in 2022, will have about one million sensors collecting data! The cost of these types of sensors is falling while their sophistication is rising allowing for more and more data to be collected in all aspects of an oil field operation.

But the real difference today is the rise of cloud computing. This makes it possible to store and analyze data at a relatively low cost. That is important to an industry that generates huge volumes of data, (think temperature and pressure readings and video footage as well). And the amount of data is rising almost exponentially. Bill Brain, CIO at Chevron, told the Financial Times the volume of data the company handles has been doubling every 12 to 18 months.

But the problem up to now has been that oil companies have done very little deep analyses of the all the data they have. Most of it went unused. But now with cloud computing, the data can be collected and correlated in one central location.

The IEA estimates that oil production costs will be cut 10% to 20% by the adoption of digital technologies, although I believe the cost savings will be even greater. For instance, BP worked with a Silicon Valley start-up on an optimization model that was able to raise output in its 180 well pilot project by 20%.

Either way, the likely result of all this innovation in the oil industry will be even more oil being produced cheaply. Currently, companies are recovering only about 8% to 10% of the oil in place in many U.S. shale wells. So if adoption of new technologies could raise that rate by even a few percentage points, the results would be dramatic. The end result would be even more downside pressure on the oil price than caused by the advent of the shale revolution here in the U.S.

While this may not be good news for oil price bulls, the adoption of new technologies by the oil industry is great news for the companies that provide the technology – the oil service companies.

Oil Technology Investments

The number one company here is the world’s largest oil field services firm, Schlumberger (NYSE: SLB), which was founded in 1926. A sign of the change in its business since then is the fact that today it has a software technology innovation center that sits at the heart of Silicon Valley.

In 2017, Schlumberger launched a new software system called Delfi, which makes it possible to bring together and coordinate the way oil wells are designed, drilled and brought onstream into production. This allows Schlumberger’s clients to maximize output from an entire oilfield. The company also has worked with Nvidia in adapting its technology for viewing and analyzing seismic data.

The company’s hope is that, by the end of 2018, oil companies around the world will be using its new technologies “on a regular basis”. Schlumberger’s executive vice-president for technology, Ashok Belani, said to the Financial Times that adoption of this technology will cut production costs by 40% in U.S. shale fields within the next decade!

The next company is Halliburton (NYSE: HAL), which is the world’s number two oil field services provider. Like Schlumberger, it is also working with Nvidia on adapting technology for viewing and analyzing seismic data.

Last August, Halliburton announced a major partnership with Microsoft to ‘transform the oil industry in radical ways’. The goal is to digitize the entire upstream oil industry and improve exploration results through the application of deep learning and augmented reality to reserve estimates, modeling and simulations.

The two firms are collaborating in areas including machine learning, augmented reality and user interactions. Halliburton will use Microsoft’s HoloLens, Surface, Azure and its Internet of Things solutions.

Finally, there is Baker Hughes (NYSE: BHGE), which is currently 62.5% owned by General Electric. I expect GE to spin this off in the not-too-distant future.

The company also has a partnership (announced in 2017) with Nvidia, but this one involves using artificial intelligence (AI) to help extract and process oil and gas more efficiently. It believes that it is just scratching the surface of what AI can do for the industry.

It also has a California technology center that it shares with the software operations arm of GE. Baker Hughes uses GE’s innovative industrial software program, Predix, in oil and gas applications.

Schlumberger’s stock is up 4% year-to-date, but is still down over 10% over the past year. Halliburton’s stock is also up about 4% both year-to-date and over the past 12 months. Baker Hughes’ stock is also up nearly 4% year-to-date, but is down a whopping 21% over the last 52 weeks.

With the oil industry finally moving toward digitization, these stocks should have a brighter future ahead of them.

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Source: Investors Alley 

8 Long-Term Uptrend Stocks to Buy

Source: Emilio Kuffer via Flickr

In the early stages of an uptrend, it’s hard to tell just how far a stock will rally. Sometimes these trends are short-lived and “only” give us a 10% return. Other times though, these trends are good for several years and return 100% or more.

Telling the difference in the beginning is tough and too many investors take a pass on something because it’s up 10% or 20% in a few months. While there’s no such thing as a risk-free bet, they’re leaving a ton of reward on the table by avoiding the name simply because of its recent rally. It reminded me of a line from a great writer, Richard Saintvilus:

One lesson, among many others, I’ve learned on Wall Street is that it’s never too late to make the right call. And if ever that proverbial train “leaves the station,” there’s nothing wrong to admit you were wrong and chase that train to get back on board — even if the ticket costs more to ride.”

A stock rallying from $105 to $125 in a few months is a lot and may make many feel they’ve missed the train. But what if we ignored a good fundamental situation because “it had rallied too much.” Ultimately nine months later that stock is sitting another $50 per share higher and we ignored it. We sat out a $50 per share gain because of its $20 rally? That doesn’t make any sense.

With that in mind, let’s take a look at 8 solid stocks that are still in an uptrend and may still have farther to go.

Uptrend Stocks to Buy: Netflix

Netflix, Inc. (NASDAQ:NFLX) has been on a mission, both in reality and in the stock market. The company’s goal is to become the leader in global streaming. With 125 million customers, it’s well on its way to fulfilling that leadership goal. Heck, its market cap is just $7 billion short of Walt Disney Co (NYSE:DIS).

That puts things in perspective a bit.

But NFLX stock has been even more impressive than the company. It’s up 132% over the past 12 months and 73% since the start of 2018. That’s paved a solid — if also explosive — uptrend for investors. Take note of the chart to see what I mean.

nflx stock in an uptrend

As you can see, Netflix stock has been a beast. Notice that when it started 2018, shares weren’t over $200 yet! Now we’re already over $300. The move has been intense, but so long as the trends stay in place it’s hard to bet against NFLX.

Over its previous highs and above $330, Netflix stock is basing nicely. Momentum is strong and the stock is not yet overbought (blue peaks on the chart). Should nearby support fail, investors would be lucky to gobble up the stock near $300. There should be support near this level, along with the 50-day moving average and a rising uptrend line of support.

Given that the company just beat earnings, revenue and subscriber estimates, as well as provided subscriber guidance that topped analyst estimates, I’d rather be a buyer on dips than a seller on rips.

Uptrend Stocks to Buy: Nvidia

Nvidia Corporation (NASDAQ:NVDA) has been one of the market’s best performers. If you bought this name at the start of 2016 and forgot how to hit the sell button, you’d be sitting on a 600% gain in Nvidia. While the move has been extraordinary, we could be setting up for even more gains.

nvda stock in an uptrend

Looking at the charts, it’s pretty obvious that Nvidia has been struggling to eclipse the $250 mark. On three separate occasions this year, shares have rallied to this point only to fail and stumble lower.

Thursday’s 3% selloff could setup NVDA stock to retest the 100-day moving average and uptrend support that’s been in place for almost a year. As much as investors would hate to see this level fail though, I would love to get a shot at NVDA near $200. At this level, it would have the 200-day moving average and decent support to hold it.

Just like January 2017 through May 2017, it’s good to see Nvidia digest some of its massive move over the past 12 months. If there are worries about waning demand due to cryptocurrency headwinds, then Nvidia stock could see a further decline — perhaps down to that $200 level we’re wishing for.

While this is one of the strongest uptrend stocks we’ve seen, remember it has massive gains over the past few years. Eventually a big pullback wouldn’t be a surprise. If $200 comes, it would be a 20% decline for the highs. I’d love to buy into its secular upside on a short-term selloff.

Until then, the $250 breakout is still in play.

Uptrend Stocks to Buy: Boeing

Boeing Co (NYSE:BA) went from a frustratingly stubborn stock to one that couldn’t be stopped. Consider that BA stock was flat from January 2014 through October 2016, almost a three-year lull. However, shares then exploded 90% in 2017.

So what now?

BA stock in an uptrend

It obviously wouldn’t be surprising to see Boeing stock settle down and consolidate a bit. Even bouncing between $300 and $360 for a few quarters would represent a relatively healthy consolidation period.

I like BA for its intense earnings growth, commitment to capital return and huge free-cash flow. It’s not the cheapest stock in the world anymore, but valuation and consolidation aren’t enough of a reason to sell the stock.

Shares still look great in the short-term, as our chart shows. Poking through resistance with plenty of support nearby, BA stock could retest its old highs if these patterns hold steady. It’s got bullish momentum and isn’t overbought yet either (blue circles on the chart).

Uptrend Stocks to Buy: Salesforce

salesforce.com, inc. (NASDAQ:CRM) has tripled since mid-2013, but its gains over the past 16 months have been truly impressive. Shares have quietly rallied 81% over that period, forming quite the uptrend in CRM.

crm stock in an uptrend

This is one of my favorite names, because despite its $90 billion market cap, it still flies under the radar. Alphabet Inc (NASDAQ:GOOGL), Amazon.com, Inc. (NASDAQ:AMZN) and Microsoft Corporation (NASDAQ:MSFTget all the credit for their cloud businesses.

Despite CRM still churning out incredible growth, it seems to be much less discussed than it was a few years ago. That’s not stopping the analysts, though. They expect annual revenue of about 20% for the next four years. On the earnings front, estimates call for almost 60% growth this year and another 26% growth next year.

While CRM is pretty expensive on an earnings basis, its sales-based valuation is actually pretty reasonable versus its peers. CRM has better growth than most of its large cap competition and far superior financials and cash flow compared to its smaller competition. It’s in a real sweet spot right now. Lastly, the company has a very long runway for growth — as seen by the long-term revenue predictions — giving investors confidence to buy the stock today.

Investors could easily draw an uptrend line on CRM’s chart to highlight the stock’s robust rally. But just look at the 100-day moving average instead. All three major moving averages are trending higher, but each time Salesforce pulls back to the 100-day, CRM has an intense bounce.

Uptrend Stocks to Buy: Roper

Roper Technologies Inc (NYSE:ROP) has been in a very steady uptrend over the last year and a half.

In fact, Roper was and still is one of my top Future Blue Chip stocks. Known for robust revenue and earnings growth today, management has demonstrated a tangible commitment to returning capital to shareholders. The goal here is simple: Allow the company’s robust growth to drive shares higher over the long-term and cement its position in our portfolio with a low cost basis, while enjoying management’s continued commitment to raising the dividend once the business is more matured.

Rop stock in an uptrend

Well, ROP sure is delivering on the first part of our strategy: allowing strong growth to drive shares higher. Since the start of 2017, Roper stock is up more than 50% and is up more than 35% over the past year.

I’m definitely not ready to bet against Roper anytime soon. However, some may start to grow concerned over its valuation and growth profile. Analysts expect sales growth of just 6.1% this year and 7% next year. That’s good, but not necessarily great. While 17.5% earnings growth this year is very solid, estimates of just 8.5% next year is sort of lackluster.

It may make some wonder if ROP stock is worth 25 times this year’s earnings and 23 times next year’s estimates. On the chart though, Roper still looks great.

There’s pretty clear resistance between $285 and $290, while uptrend support currently sits around $270. The 100-day is support as well. If these support levels give way though, the 200-day moving average would be my downside target. If ROP stock breaks over resistance, consider buying the breakout.

Uptrend Stocks to Buy: Visa and MasterCard

Let’s do a double for this one: Visa Inc (NYSE:V) and Mastercard Inc (NYSE:MA). Both companies are huge beneficiaries of the same trend, as global consumers continue moving to credit and debit from cash and check. Further, growing e-commerce sales bode well for V and MA too, for obvious reasons.

V stock in an uptrend

The credit card business is attractive for many reasons, as V and MA serve as simple “toll booth” businesses. They don’t lend consumers money and they don’t take on big risks. Instead, when a consumer purchases goods or services from a merchant and pays via credit card, the merchant pays a fee that goes to V and MA.

While the pair of stocks may look expensive on a sales basis at first glance, the earnings-based valuation isn’t all that bad. Especially considering their double-digit earnings and revenue growth.

Throw in the fact that Visa has profit margins of almost 40% while MA has margins of 32% and we can see that these two are earning money hand over fist.

ma stock in an uptrend

Both stocks tend to trade with a high correlation. They’ve been in a steady uptrend since early 2017 and I hate that I’ve taken some off the table since I first initiated a position almost six years ago.

As V and MA both bump up against resistance, they look like they’ll soon push through to new highs, short of another market-wide selloff.

Uptrend Stocks to Buy: Raytheon

Like Roper, Raytheon Company (NYSE:RTN) is another under-the-radar company. However, its stock sure has become something to talk about, with shares up about 50% over the past 12 months.

While the rest of the market has been floundering, RTN stock is already up more than 21%. That’s what happens when a company makes anti-missile defense systems and the U.S. military has an annual budget of roughly $700 billion.

rtn stock in an uptrend

While the U.S. government utilizes other anti-missile defense systems — Lockheed Martin Corporation (NYSE:LMT) also makes one — the desire for countries to boost their defensive capabilities continues to increase. That’s no surprise given the tension on the Korean Peninsula and continuing conflicts in the Middle East.

Despite expectations calling for revenue growth of about 5% this year and next year, earnings are set to explode — no pun intended. Analysts are looking for 27% growth this year and more than 15% growth in 2019. With earnings growth outpacing revenue growth, look for margins to expand as well. If the government keeps spending like Trump has so far, expect more lucrative contracts in the future, too.

After flagging the stock as a potential breakout candidate earlier this month, the recent 52-week highs come as little surprise. Going forward, look for RTN to make even more highs so long as its uptrend support holds steady (as shown on the chart). Keep in mind, the average analyst price target sits at $240.

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Two Stocks to Buy Benefiting from Trump’s Tax Reform Law

With this year’s tax filing deadline date just past, it’s a good as time as any to take a look at a few special situations whose stock prices were hit because of recent changes in tax policies.

The first company I want to tell you about is one that has become a real life example of the law of unintended consequences…

Congress changed the way American corporations are taxed on their overseas earnings. Previously, firms were taxed at the 35% rate. But most companies avoided that by booking their income overseas and then keeping the money there.

So Congress came up with GILTI (Global Intangible Low-Taxed Income), which was set at 10.5%. Its main target was the tech and pharma companies that transferred their trademarks and patents overseas to avoid paying tax on them.

Kansas City Southern

But this new tax intended to tax overseas income earned by U.S. technology and pharmaceutical firms and their trademarks and patents has hit closer to home with the railroad company Kansas City Southern (NYSE: KSU), which has a substantial business in Mexico.

Even though its main assets are railcars (and not intellectual property) and it already pays a 30% tax in Mexico, it will also be hit by GILTI. That’s because of the way the new tax interacts with the treatment of foreign tax credits that are supposed to prevent two countries from taxing the same income. When companies figure out the credits they receive for paying taxes overseas, the law typically requires them to assign some of their domestic expenses to foreign jurisdictions.

The result for some firms like KSU is that, for U.S. tax purposes, their foreign income and foreign taxes look smaller than they actually are. This actually shrinks their tax credits and may force them to pay the GILTI tax on top of their foreign tax bills. In particular, it hits companies with operations in high-tax countries like Mexico, Germany and Japan.

So the net effect for companies like Kansas City Southern from the new tax law is practically nil, receiving almost no net boost. Nevertheless, I do like the company because of its large exposure to Mexico (it owns one of two large regional railroads in the country) and its 50% ownership in the Panama Canal Railway Company.

Record financial results have driven the stock higher in recent months despite fears over whether NAFTA negotiations between Canada, Mexico and the Trump Administration will end with a positive result. The stock is up 25% over the past year and 6% year-to-date. Here is a breakdown of its latest results (fourth quarter) by segment:

  • The Industrial & Consumer Products segment generated revenues of $147.1 million, up 8% year over year. While business volumes improved 10%, revenues per carload fell 1% year over year.
  • The Chemical & Petroleum segment had revenues of $137.7 million, up 24% year over year. Volumes improved 12% year over year. Revenues per carload rose 11% from the prior-year quarter.
  • The revenues at the Agriculture & Minerals segment were $121.7 million, down 1% year over year. Business volumes declined 9%, but revenues per carload were up 9% both on a year-over-year basis.
  • The revenues at the Energy segment were $69.8 million, up 15% year over year. Particularly impressive performance was the amount of frac sand the company hauled. Volumes increased 3% year over year and revenues per carload rose 11%.
  • Intermodal revenues were $97.4 million, up 5% year over year. Volumes improved by 7% and revenues per carload decreased 2% in the quarter.
  • Revenues at the Automotive segment came in at $60.6 million, up 15% year over year. Volumes improved 5% and revenues per carload increased 9%.

Other revenues totaled $26.1 million, up 16% year over year.

Bottom line… it is a solid company whose stock looks like a good buy anytime NAFTA headlines send it lower.

Tax Ruling Hits MLPs or Does It?

In March, there was also a ruling from the Federal Energy Regulatory Commission (FERC) that had tax implications. It closed a loophole that allowed some master limited partnerships (MLPs) with pipelines to be eligible for a tax recovery payment even though they paid no taxes.

Virtually all MLPs said the FERC ruling would have little impact on their cash flow. The only actual MLPs affected were those with substantial interstate oil and gas pipelines such as Enbridge Energy PartnersWilliams Partners and Spectra Energy Partners.

The mass sell-off occurred even though U.S. energy production is reaching record highs. With the sector’s newly-found focus on good corporate governance and with yields approaching 10% in some cases, MLPs are worthy of renewed interest from you. With the fear over this FERC ruling did was simply to lower the valuations of the sector to levels that in the past turned out to be good buying opportunities.

After the ruling, the Alerian MLP index was trading at an 8% discount to the S&P 500 on the basis of price to projected funds from operations over the following year, according to FactSet. The only two other times in the past 10 years that saw a similar discount occurred in November 2008 and February 2016. What followed were rallies of 50% and 60% respectively in the index over the subsequent six month period.

If you’re looking for a specific MLP, I suggest you check out articles from my colleague, Tim Plaehn, who has lots of expertise in the sector. For broad exposure – since I believe the whole sector is so beaten-down – there are a number of exchange traded funds that fit the bill. The largest of these is the Alps Alerian MLP ETF (NYSE: AMLP), which has 27 stocks in it and is down over 23% in the past 52 weeks and more than 10% year-to-date, putting it in a bargain price range.

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7 Monster Market Trends and 7 Ways to Invest

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It’s been a treacherous few months for investors. As of this writing, stocks remain range bound between two major technical support levels. On the upside, the S&P 500 is contending with its 50-day moving average. Last week, the 200-day average provided critical support.

What happens throughout the rest of the year depends in large part on how the market resolves this stalemate.

But from this vantage of volatility and uncertainty, a few major trends are clear. And for investors trying to cut through the noise, here are seven monster trends and seven ways to ride these catalysts toward a better 2019:

Monster Market Trends: Amazon (AMZN) Eats the World

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Multiple Amazon.com, Inc. (NASDAQ:AMZN) related headlines have crossed in recent days, serving as a reminder just how quickly and aggressively the company is diversifying into new business areas.

Like shipping logistics. And meal boxes. And possible initiatives in the healthcare space.

The company will next report results on April 26 after the close. Analysts are looking for earnings of $1.30 per share on revenues of nearly $50 billion.

When the company last reported on Feb. 1, earnings of 36 cents per share beat estimates by 36 cents on a 38.2% rise in revenues.

Monster Market Trends: Combat Syria With Lockheed (LMT)

lmt stock

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President Trump’s decision late Friday to launch cruise missiles into Syria for the second straight year is lifting a bid into defense stocks amid a realization this is likely the first stage of a multi-part escalation involving Russia, Iran, Saudi Arabia and Israel.

As a result, Lockheed Martin Corporation (NYSE:LMT) shares are breaking up and out of a multi-month consolidation range ahead of a possible rally to the late February highs near $360, which would be worth a 4% gain from here.

The company will next report results on April 24 before the bell. Analysts are looking for earnings of $3.35 on revenues of $11.3 billion.

Monster Market Trends: Volatility Is Here to Stay With the iPath Short-Term VIX (VXX)

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After one of the quietest rallies in market history in 2017, investors have been rudely awakened by the reappearance of dynamism in the markets.

Bespoke Investment Group notes that compared to 2017 when there were just eight moves of 1% or more, so far in 2018 there have been 28 with 11% just over the last month.

Yet despite the volatility, actual price movement has been subdued: At 3 pm Friday, the S&P was trading at the exact same price that it was on Feb. 5.

Watch for this short-term volatility to continue until some medium-term volatility manifests into a major repositioning of the major market averages. That’ll be a boon to the VXX.

Monster Market Trends: Uncertain Bull Market Helps SPDR Gold Shares (GLD)

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Precious metals and the related exchange-traded funs like the SPDR Gold Trust ETF (NYSEARCA:GLD) have been in the doldrums for years amid low volatility and calm conditions.

But that could be set to change thanks to a number of tailwinds, including higher inflation pressures, geopolitical tension, a deepening trade rift, and the ongoing Russia collusion probe involving President Trump, his administration and his 2016 campaign.

Any developments on these fronts should send investors into safe havens like gold. Which, in turn, should lift the GLD out of its three-year trading range to levels not seen since early 2014.

Monster Market Trends: iPhone Notches for Everyone With Apple (AAPL)

 

Apple Stock Is Still One of the Best Long-Term Picks Out There

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Apple Inc. (NASDAQ:AAPL) shares have been treading water since the iPhone X with its $1,000 price tag and iconic screen “notch” was unveiled.

Shares have stalled on underwhelming demand, production woes, and a surprisingly warm reception for the iPhone 8. But this year’s models, according to reports, will replicate the iPhone X’s notch screen across three new handsets including an entry-level model with an LCD screen instead of the more expensive OLED option.

The company will next report results on May 1 after the close. Analysts are looking for earnings of $2.70 per share on revenues of $61.2 billion.

When the company last reported on Feb. 1, earnings of $3.89 beat estimates by four cents on a 12.7% rise in revenues.

Monster Market Trends: Merck (MRK) Takes the Fight to Cancer

merck stock

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Merck & Co., Inc. (NYSE:MRK) shares jumped 2.4% on Monday, popping back over its 200-day moving average, after the company announced positive clinical results from its Keytruda treatment for lung cancer and melanoma.

Immunotherapies like Keytruda are enjoying increased clinical success and set to play a larger and more lucrative role in the healthcare market.

The company will next report results on May 1 before the bell. Analysts are looking for earnings of $1 per share on revenues of $10.10 billion.

When the company last reported on Feb. 2, earnings of 98 cents per share beat estimates by four cents on a 3.1% rise in revenues.

Monster Market Trends: U.S. Shale Returns to Form, Boosting Kinder Morgan (KMI)

Energy pipeline stocks like Kinder Morgan Inc (NYSE:KMI) have been hit by the post-2014 weakness in energy prices. But a recent strengthening, with crude oil pushing back towards the $70-a-barrel threshold, has reinvigorated interest as U.S. shale producers ramp up production in response.

The company will next report results on April 18 after the close. Analysts are looking for earnings of 21 cents per share on revenues of $3.5 billion. When the company last reported on Jan. 17, earnings of 21 cents per share beat estimates by three cents on a 7.2% rise in revenues.

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Source: Investor Place