The stock market rout has left no victims, least of all secular growth giant Amazon(NASDAQ:AMZN). Mostly thanks to a rapid slowdown in the e-commerce business, Amazon stock has dropped into bear market territory recently and is having trouble staging a reversal.

The rapid slowdown in Amazon’s e-commerce business isn’t a good thing for Amazon stock. But it also isn’t that much of a surprise. After all, the business had been growing at ridiculous rates over the past several years, and expanded to control 50% of the U.S. e-commerce market. That wasn’t sustainable. Eventually, other retailers would pivot en masse to the digital channel, market share would be more evenly distributed and Amazon’s e-commerce growth would slow.

That is happening now. Amazon’s e-retail growth rates are coming off the rails. But, other retailer’s e-commerce growth rates are actually improving. That means that while Amazon stock falls, there actually a group of stocks out there that are consequently winning.

Which stocks belong in this group? Let’s take a closer look at four stocks that are winning as a result of Amazon’s e-commerce slowdown.

Stocks Winning as Amazon Stock Falls: Walmart (WMT)

The first pick on this list is an obvious one. Walmart (NYSE:WMT) is the 400-pound elephant in the retail world that has gradually ceded share to Amazon over the years. But, that trend has sharply reversed course recently.

Over the past several quarters, Amazon’s total e-commerce growth rates (online store sales plus third-party sellers services) have decelerated from the mid-20’s to just 15% last quarter. Given the weak Q4 guide, that growth rate will presumably slow to below 15% in Q4.

Meanwhile, during that stretch, Walmart’s e-commerce growth rates have consistently hovered north of 20% and often closer to 40%. Last quarter, for example, Walmart’s e-commerce sales rose by 40%. Thus, as Amazon’s e-commerce growth has cooled to sub 20% rates, Walmart’s e-commerce growth has sustained itself around 40%.

That means Walmart is rapidly stealing share from Amazon in the e-commerce world. This shifting of market share from Amazon to Walmart was inevitable. Amazon controlled 50% of the U.S. e-commerce market in 2017. Walmart controlled just 4%. In terms of total retail sales, though, Walmart dwarfs Amazon, so as Walmart pivots to e-commerce, its share will naturally grow and Amazon’s share will naturally fall.

Investors should expect this dynamic to persist for the foreseeable future. Consequently, Walmart stock should rise due to sustained robust e-commerce growth as Amazon’s e-commerce business cools.

Stocks Winning as Amazon Stock Falls: Target (TGT)

The second pick on this list is just as obvious as the first pick. If Walmart is the 400-pound elephant in the retail world, Target (NYSE:TGT) is its 50-pound little brother. Just as Walmart has gradually ceded share to Amazon over the past several years, Target, too, has ceded share. But, just as is the case at Walmart, this market share erosion trend at Target has reversed course recently.

Over the past several quarters, as Amazon’s e-commerce growth rates have slowed to 15%, Target’s e-commerce growth rates have not just remained robust like they have at Walmart, but actually accelerated higher. A year ago, Target’s e-commerce business was growing at a 30% rate. Last quarter, the e-commerce business grew at a 40%-plus rate.

Overall, as Amazon’s e-commerce growth has cooled, Target’s e-commerce growth rate has heated up to industry-leading levels. Among the retail Big 3 of Amazon, Walmart and Target, Target posted the highest e-commerce growth rate last quarter.

This dynamic will persist. In 2017, Amazon had 50% share of the U.S. e-commerce market to Target’s sub-1% share. But, Amazon’s North America retail operations aren’t 50 times as large as Target’s North America retail operations. Instead, Amazon North America retail has about twice the sales volume of Target.

Thus, as the e-commerce market continues to democratize over the next several years, Target will gradually gain share. These share gains will come at the expense of Amazon, so as Amazon’s e-commerce business cools, Target stock should rise.

Stocks Winning as Amazon Stock Falls: Etsy (ETSY)

This pick is less obvious than the first two picks. Nonetheless, Etsy (NASDAQ:ETSY) is an undeniable winner as Amazon’s e-commerce business slows. The biggest knock against ETSY stock over the past several years is that it doesn’t deserve its valuation because of inevitable “Amazonification.” Eventually, Amazon would copy exactly what Etsy does, and replicate it with greater scale and at lower prices. Sellers would quickly leave Etsy. Buyers would follow suit. The whole Etsy platform would collapse, and ETSY stock would drop.

That hasn’t happened.

Instead, Amazon’s e-commerce business has cooled. In particular, the company’s third-party services growth rate has cooled form 40% and up a few quarters ago, to 30% and slowing last quarter. Meanwhile, during that stretch, gross merchandise sales growth on Etsy has accelerated for four consecutive quarters and registered at a multi-quarter high of over 20% last quarter.

Thus, while Amazon’s third-party e-commerce growth has cooled, Etsy’s gross merchandise sales growth has accelerated.

I don’t think this is a coincidence. Etsy has clearly established a niche for itself as a trusted digital marketplace for the buying and selling of handmade arts and crafts. Amazon has tried to penetrate this market. But, they haven’t had great success. Now, Amazon’s growth is slowing. Etsy’s growth is ramping. Ultimately, that means that as Amazon’s e-commerce business continues to slow, ETSY stock will benefit.

Stocks Winning as Amazon Stock Falls: Shopify (SHOP)

This may be the least obvious pick on this list, but it also may be the biggest beneficiary of Amazon’s slowing e-commerce growth. Shopify (NYSE:SHOP), which provides e-commerce tools and solutions for retailers of all shapes and sizes, benefits tremendously when e-retail gets democratized.

Ultimately, the Shopify business model hinges on this aforementioned democratization of e-retail. Shopify provides e-commerce tools and solutions for all retailers, but with a heavy emphasis on smaller retailers who aren’t equipped to sell efficiently through digital channels. If there are only 10 retailers in the whole e-commerce world, Shopify’s market is small. But, if the e-retail world starts to look like the physical retail world with millions of retailers, then Shopify’s market becomes quite big.

Right now, we are in the process of Shopify’s market going from relatively small, to huge. In 2017, the top 10 e-commerce retailers controlled upwards of 70% of total e-commerce sales. That is exceptionally uneven distribution. In the total retail world, the top 10 retailers account for just 30%of the total retail sales among the top 250 retailers, and presumably a much smaller share of total retail sales among all retailers.

The biggest driver behind this uneven distribution? Amazon. Now, though, Amazon e-retail is cooling. By a whole bunch. Meanwhile, e-commerce growth rates throughout the U.S. remain as robust as they were a year ago, so that means most of the growth in e-commerce is coming from players not named Amazon, and that the number of retailers with e-commerce operations is growing.

That is a great thing for Shopify. In the long-term, the e-retail environment should look a lot like the brick-and-mortar retail environment in terms of sales distribution, and that means we have lot more democratizing to do. From this perspective, Shopify stock is a big winner as a result of Amazon’s slowing e-commerce business.

As of this writing, Luke Lango was long AMZN, WMT and SHOP.

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After too many long months of campaign ads and political bickering, the end is in sight. That is, as of Wednesday morning we’ll have chosen our next batch of elected officials, thrilling roughly one half of the country while simultaneously disappointing the other half. So what are the best stocks to buy?

As investors, none of us should really care too much about the outcome despite the fear-mongering from both sides of the table. The third year of any presidency, or the year following midterm elections, tends to be a good one no matter which party is in control and which party loses control of at least one congressional house. Since 1928, the third year of a presidential term averages a gain of just under 14%, making it the most fruitful year of any of the four years of a presidency.

Assuming President Donald Trump’s third year is going to be the typically bullish one regardless of how much representation the Democrats are able to claw back from Republicans, you may want to make sure you’ve got exposure to the equity market sooner than later. Here’s a run-down of ten stocks to buy, as they look particularly well-positioned for strong 2019.

Alaska Air Group (ALK)

In its long-term industry outlook, aircraft maker Boeing (NYSE:BA) indicated that demand for air travel would grow at an average annualized pace of 4.7% for the next 20 years. Although intended to point to demand for new aircraft purchases, it’s also encouraging for airline investors. After all, it’s the carriers that will be buying these planes to meet that demand.

In most cases, it’s a major name like Delta Air Lines (NYSE:DAL) an investor would opt to own. In this case, though, a smaller player like Alaska Air Group (NYSE:ALK) might be a better choice. And, if the Trump-driven economy continues to grow as it has, Alaska Air is apt to report solid 2019 numbers.

Last quarter’s margins and earnings were both much better than expected, and it looks like the company’s costs-surge are finally starting to abate for good.

Paypal (PYPL)

Paypal (NASDAQ:PYPL) isn’t a company that needs an introduction. It’s still the biggest name in online payments, and deals with partners like Visa (NYSE:V) and Mastercard (NYSE:MA) mean it’s also making headway within the all-important point of purchase (POP) market. And, it’s also a direct beneficiary of the convergence of economic growth and an increasingly-digital consumer.

There are a couple of kickers, however, that could make 2019 a huge year for PayPal. One of them is the fact that PayPal has finally started to seriously monetize its peer-to-peer money transfer platform Venmo … something it had been slow to do, wanting to draw people into the ecosystem.

The other bullish argument for the coming year is that the company has earmarked $3 billion per year just to make acquisitions. Each bolt-on bolster’s PayPal’s dominance of the industry.

Bank of America (BAC)

This year hasn’t been a particularly good one for Bank of America (NYSE:BAC) shareholders, with BAC stock down roughly 5% year-to-date versus the broad market’s modest gain. Investors are concerned the adverse impact of higher interest rates is more potent than the benefit of higher interest rates.

So far that hasn’t actually been a merited concern. In its third quarter, lending activity was up 1.4%, and margins topped expectations.

To the extent fear of rising rates is the key culprit though, the coming year could be an easier one for shareholders to stomach, making BofA one of several top stocks to buy. Against a backdrop of a rock-solid economy, the market’s only planning on two or three rate hikes for 2019, versus what will almost certainly be four increases this year when all is said and done.

Waste Management (WM)

It often goes unnoticed, just because of the nature of the industry. But, in times of economic growth, the nation’s capacity to create garbage swells. Enter Waste Management (NYSE:WM) … the company that turns garbage into money.

Although revenue is only projected to grow a little less than 3% this year, per-share earnings are expected to swell by 28%. Next year’s projected sales growth of almost 5% should improve the bottom line by a little more than 7%.

Waste Management CEO Jim Fish explained following the release of the company’s third-quarter numbers “those [dumpster rentals] are a really good proxy for how small business is doing, and small business seems to be doing well based on that [last quarter’s rental revenue].

The industrial side of our business is more a proxy for manufacturing, and that’s doing really well too.”

Nvidia (NVDA)

One of the early criticisms of the Trump White House has been a lack of a strong government-encouraged plan to advance the development of artificial intelligence technologies.

It’s since been addressed, though the noise of political campaigns has proven distracting. Once the midterms are over though, voters and consumers may be surprised at how close the country’s artificial intelligence players are to reaching something of a critical mass.

It’s a development that bodes well for many hardware and software companies, but arguablyNvidia (NASDAQ:NVDA) is among the best of the best stocks to plug into AI mania.

It’s one of the few outfits that’s built artificial intelligence machines from the ground up to do just that, and last quarter’s 83% growth in its data center business largely reflects the young swell of demand for AI architecture.

The coming year could be a huge one for artificial intelligence now that Washington is also on board with its cultivation.

CSX Corp. (CSX)

Regardless of your opinion of him, it’s impossible to deny that Donald Trump has rekindled America’s manufacturing industry. He’s also revived the country’s natural resources industries. Both have, in turn, proven to be a boon for the nation’s transportation industry, which is about as busy as they’ve been in a while hauling newly mined or freshly manufactured goods from one coast to the other.

Rail carrier CSX Corp. (NASDAQ:CSX) has been one of the biggest beneficiaries. Railroads have been busier this year than they’ve been since 2015, and CSX itself is projected to improve its top line by 7.3% this year once the final tally is taken.

The carrier’s real growth, though, is on the bottom line. Last year’s per-share profit of $2.30 is expected to reach $3.82 this year and grow to $4.23 next year, riding the wave of the nation’s revived industrial machine.

Raytheon (RTN)

Contrary to what it’s looked and felt like of late, there is one thing Democrats and Republicans mostly agree on — the nation needs a strong defense, even if it requires a massive amount of money to muster it.

There are plenty of defense contractors to choose from, but it’s Raytheon (NYSE:RTN) may quietly be one of the top stocks to invest in from the sector. It offers everything from training services to missile systems to cyber warfare to mission control platforms, and more. It’s not only a highly diversified company, it’s a company that’s very much in tune with the nuances of modern-day warfare.

More than anything though, it’s a company on the right side of governmental spending plans. Washington has already budgeted $688.6 billion for military spending in 2019, up 3.5% from 2018’s budget of $664.7 billion. And better still, the government is working with tentative military spending plans of $732.4 billion for 2020.

AptarGroup (ATR)

AptarGroup (NYSE:ATR) isn’t exactly a household name. But, maybe it should be … considering the likelihood that there’s something in every U.S. household wrapped in a package made by Aptar.

Yes, AptarGroup makes a variety of packaging solutions, from pieces of cosmetics containers to condiment bottle flip lids to medical inhalers, and more. It’s another one of the names like Waste Management and CSX. That is, everybody benefits from it, but nobody realizes it. That is, they wouldn’t realize how important Aptar is until the company was gone.

The good news is, Aptar isn’t apt to be going anywhere. This year’s sales are projected to grow nearly 12%, driving more than a 13% improvement in the company’s bottom line. Next year’s expected 8% growth in revenue should bolster the bottom line by 12%.

FireEye (FEYE)

For years cybersecurity company FireEye (NASDAQ:FEYE) was questioned for spending so heavily on acquisitions, and booking steady GAAP losses as a result.

In retrospect though, there may have been a method to the madness. With so many marketable weapons now at its disposal available in one cloud-based suite called Helix, FireEye has a recurring-revenue machine that’s not only up and running, but running in high gear.

That still doesn’t fully make the case that FireEye is read to end 2018 on a high note and set the stage for a huge 2019. But, this will. Thanks to all the new recurring-revenue customers that have been added of late, last year’s per-share loss of 16 cents is on pace to be a full-year profit of eight cents this year, and grow to earnings of 169 cents per share in 2019. That’s a huge validation of everything the company’s been doing for a long while now.

Dicks Sporting Goods (DKS)

Last but not least, add Dicks Sporting Goods (NYSE:DKS) to your list of stocks to buy after the midterm elections are over.

There was a time not too long ago when Dicks Sporting Goods’ future looked bleak. A cyclical wave of sneaker mania and athletic apparel demand peaked a couple of years back, marked by a string of athletic shoe and clothing store closures. Sports Authority’s bankruptcy and Finish Line’s shuttering of 150 locales in 2016 speaks volumes on the matter.

In some ways though, that industry headwind left Dicks Sporting Goods even better positioned to ride the wave of renewed consumerism. With much less competition to contend with, the retailer is expected to start growing its top line again next year.

It’s only projected growth of 2.4%, but the small improvement in sales is also expected to improve the company’s per-share earnings figures at an even faster clip.

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Sometimes identifying the best stocks to buy can be difficult, but you could do a lot worse than checking out the stocks selected by one of the world’s savviest hedge fund managers — Warren Buffett.

Buffett’s stock picks are a popular source for investors, and for good reason. The billionaire Buffett is many things: He’s among the world’s most successful fund managers, a legendary philanthropist and owns more than 60 companies.

Buffett’s formidable stock-picking ability has given him the nickname “the Oracle of Omaha” and a fortune of more than $87 billion. And now we can track the latest trades of his $191 billion Berkshire Hathaway fund.

Just-released SEC forms reveal a valuable glimpse into stocks Buffett likes (and the stocks Buffett doesn’t like). These are the stocks he poured money into in the second quarter.

Here I also include TipRanks’ stock insights from Wall Street’s best-performing analysts. Does the Street sentiment match Buffett’s latest stock picks — or is he going rogue with his investing decisions? Let’s take a closer look at the top Warren Buffett stock picks now:

Editor’s Note: This article was originally published on Aug. 17, 2018. It has been updated to reflect changes in the market.

Apple (AAPL)

Apple (NASDAQ:AAPL) is now by far and away Buffett’s largest investment. After missing the tech sector rally (Buffett recently admitted that he “blew it” by not investing in Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) earlier), the Oracle of Omaha has been busy plowing money into AAPL.

Following a 5% increase of AAPL shares, Buffett now holds over $55 billion in AAPL stock. This is about 24% of the total portfolio. Interestingly, it also means Buffett now owns almost 5% of Apple stock.

“I clearly like Apple. We buy them to hold,” Buffett told CNBC in May. “We bought about 5 percent of the company. I’d love to own 100 percent of it … We like very much the economics of their activities. We like very much the management and the way they think.”

And the stock also has the Street’s seal of approval. “Despite Apple achieving the $1 trillion milestone last week, we continue to believe Apple remains one of the most underappreciated stocks in the world with a valuation that remains depressed (13.7x our CY:19 EPS estimate, ex-cash)” cheers top Monness analyst Brian White (Profile & Recommendations).

He added: “Now, Apple is heading into the seasonally strongest time of the year with a new iPhone cycle on the horizon.” Indeed, White’s $275 price target indicates big upside potential of 24%.

In total, however, the stock has a “moderate buy” analyst consensus rating. This is with a $214 price target. See what other Top Analysts are saying about AAPL.

US Bancorp (USB)

Minneapolis based U.S. Bancorp (NYSE:USB) is the fifth largest U.S. bank — and one of the top 10 holdings in the Berkshire portfolio. Following the purchase of almost 10 million USB shares in Q2, Buffett’s USB stake now totals $5.3 billion.

However, Oppenheimer’s Chris Kotowski (Profile & Recommendations) is less convinced. Interestingly, given Buffett’s preference for value stocks, it’s the valuation this top analyst takes issue with. He writes: “USB is one of the “super banks” of the banking industry, and while there is a lot to like about the stock, we think the valuation already embeds it.”

As a result, Kotowski has a “hold” rating on the stock, and tells investors to look elsewhere. “USB is not cheap on either a P/E or price/TBV basis versus peers; given the plethora of cheaper, high-quality franchises trading at a fraction of USB’s TBV multiple, we think there is more upside potential elsewhere in the sector.”

The overall Street perspective also leaves a lot to be desired. In the last three months, the stock has received four hold ratings. This is versus only two more bullish Buy calls. Meanwhile, the average price target stands at $57 (8% upside potential). See what other Top Analysts are saying about USB.

Bank of New York Mellon (BK)

Buffett has now ramped up his holding of this financial stock by 4% to $3.2 billion. This makes Bank of New York Mellon Corp (NYSE:BK) the tenth-biggest stock in Berkshire’s portfolio. Although Buffett has held BK since 2010, he began to pour money into the stock in 2017 with two 50% increases. Since then, it has been a constant build up.

Analysts, on the other hand, are evenly divided between Hold and Buy. One five-star analyst in the bull camp is Vining Sparks Marty Mosby (Profile & Recommendations). He sees a compelling investment opportunity right now. “BK currently trades at a 13x price-to-earnings multiple, and we believe its expected earnings per share growth could reduce its multiple down to below 12x. We believe this valuation is too low for a bank currently producing 25% return- on-tangible common equity.”

He concludes, “As a result of earnings growth, multiple expansion, and a 2.1% dividend yield, we are targeting over 15% total shareholder return over the next 12 months.” See what other Top Analysts are saying about BK.

Delta Airlines (DAL)

At the end of 2016, Buffett shocked the market with huge investments in four key airline stocks. Only a few years ago, Buffett called the sector a “death trap for investors.” However, with the industry fast consolidating, he decided to change his tune.

Buffett’s partner, Charlie Munger, explains “It (the railroad industry) was a terrible business for 80 years … but they finally got down to four big railroads, and it was a better business. And something similar is happening in the airline business.”

And one of the four stocks to buy that he particularly likes is Delta Air Lines (NYSE:DAL). A further $559 million investment in Q2 means Buffett now holds over 63 million DAL shares. This equates to a whopping $3.15 billion investment.

Luckily, Imperial Capital’s Michael Derchin (Profile & Recommendations) expects pricing power in key domestic hubs, improving business yields, and strong international results to boost earnings this year and next. His $68 price target indicates 25% upside potential.

But Stifel Nicolaus’ Joseph DeNardi (Profile & Recommendations) is by far the stock’s biggest supporter. With a $95 price target, DeNardi sees prices spiking a whopping 72%. This top analyst has just calculated that DAL made at least $800 million from frequent flyer programs just in 1H18.

Overall, DAL, a “strong buy” stock, has received eight buy ratings versus just a single “hold” rating. See what other Top Analysts are saying about DAL.

Southwest Airlines (LUV)

Texas-based Southwest Airlines (NYSE:LUV) is the world’s largest low-cost airline carrier. After initiating his $2.1 billion position in LUV, Buffett continued to up the stock in 2017. In Q1, Buffett ramped up the position by 10% with the purchase of 4.45 million more shares. Now the fund has a huge $3.3 billion LUV stake.

LUV shares are currently rebounding after a tricky second quarter. Shares plunged in April following a fatal accident caused by an exploding engine. The accident — the first in the company’s 47-year-old history — cost LUV over $100 million in revenue.

However: “We have recovered at this point,” CEO Gary Kelly told Bloomberg recently. “We have been enjoying very strong close-in demand and close-in revenue for a number of weeks.”

This chimes with Cowen & Co’s Helane Becker (Profile & Recommendations) analysis. “Southwest will have a lingering impact from the discounting and a sub-optimal schedule, but the third quarter appears to be the inflection point as management does not anticipate continued issues into the fourth quarter.”

She keeps her “buy” rating on this “strong buy” stock with a $66 price target (11% upside potential). See what other Top Analysts are saying about LUV.

General Motors (GM)

Buffett is also a long-standing supporter of top dividend stock General Motors (NYSE:GM). After upping Berkshire’s GM position by 2% in Q2, the fund now holds 51 million GM shares valued at $1.6 billion.

While Tesla (NASDAQ:TSLA) has been hogging most of the self-driving spotlight, GM is busy making its own mark in this fast-growing space. SoftBank Vision fund recently announced a huge $2.25 billion stake in GM’s self-driving Cruise unit.

Top RBC Capital analyst Joseph Spak (Profile & Recommendations) sees a promising long-term opportunity. This is even though GM has now lowered its 2018 outlook.

He writes “It remains to be seen whether GM can win on the robo-taxi opportunity, but it has a seat at the table. And it’s early enough in the story that we still see a lot of potential for that narrative to take hold and for growth/tech investors to look to GM, increasing demand for the shares and potentially the multiple.”

Right now Spak has a $49 price target on the stock (54% upside). Overall analysts have a “strong buy” consensus on GM. The average analyst price target of $52 suggests shares can climb 63% from current levels. See what other Top Analysts are saying about GM.

Teva (TEVA)

Buffett surprised the market with a big bet on flailing pharma giant Teva Pharmaceutical (NYSE:TEVA) back in Q417. He gobbled up 19 million shares in TEVA, worth about $358 million. Since then, Buffett hasn’t stopped buying.

He picked up a further 21.6 million shares in Q1. And now for Q2 we see another 6% boost to his position (with 61 million shares). This takes his total bet on TEVA to a staggering $1.05 billion.

There’s no doubt this is a risky move. Out of 14 recent analyst ratings, only three are buys. This is versus 10 buy ratings and one sell rating. Oppenheimer analyst Christopher Liu (Profile & Recommendations) is sitting this one out. He has a “hold” rating on the stock due to “base business headwinds.”

Liu explains, “We no longer see a clear path for TEVA to return to growth in a timely manner, and continued pricing pressure in US generics makes us less optimistic its US generic business will meet/ exceed Street expectations in FY2018.”

He is worried that the growth story will be hampered by an ongoing focus on cost cutting/divestments. This is required to ensure it meets its massive $28 billion debt obligations. However, there’s no doubt that Buffett sees the cut-priced pharma as a longer-term rebound stock. See what other Top Analysts are saying about TEVA.

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

Source: Investor Place 

Historically, family-owned stocks have outperformed the market. And it makes some sense why that’s the case — and why those controlled companies might be stocks to buy.

Family-owned companies generally have direct board oversight from family members. They’re less likely to take unwise risks, and by definition they’re more likely to have skin in the game. If an independent CEO is being compensated for share price gains, a major merger might seem a worthy gamble. If three of the board members are risking their family’s legacy on that deal, however, it might look very different.

As Credit Suisse (NYSE:CS) pointed out last year, family-owned companies outperform the market by a whopping 400 bps annually. The outperformance comes across sectors and company sizes. These 5 companies, too, represent a cross-section of the market. But all 5 look like stocks to buy.

Brown-Forman (BF.A) (BF.B)

Source: Bruce Tuten via Flickr

Distiller Brown-Forman (NYSE:BF.A,BF.B) is best known for its Jack Daniel’s whiskey. But like other liquor plays like Diageo (NYSE:DEO), BF stock has been an attractive investment for some time now. The company has raised its dividend for 34 consecutive years. And after a few years of relatively stagnant growth, Brown-Forman has shown much stronger performance of late.

New offerings like Jack Daniel’s Tennessee Honey are driving sales. A move to premium whiskey — including Gentleman Jack and Woodford Reserve — has been a winner as well. Revenue growth has accelerated to 6% in fiscal 2018 (on a constant-currency basis) and should rise 4%+ this year, with the company projecting 11-18% EPS growth.

Meanwhile, BF.A stock has become much cheaper in the market selloff of late, currently trading at a 10-month low. There are some near-term concerns about tariffs, which led FY19 EPS guidance to be pulled down. But those concerns should fade, and long-term investors should ride out any volatility by picking up Brown-Forman on the dip.

Adams Resources & Energy (AE)

Source: Wikipedia

Adams Resources & Energy (NYSE:AE) admittedly is a bit of a weird stock. The company’s primary Marketing business moves crude oil from the wellhead to end users, while a smaller transportation business trucks petrochemicals and other products through Texas and beyond.

The controlling Adams family has a bigger asset: the NFL’s Tennessee Titans (formerly the Houston Oilers). And it’s looked at times like Adams Resources has been forgotten. AE has a rising amount of cash — nearly $30 per share, against a current price of $41. Yet the dividend has been held steady, leaving that cash relatively dormant.

Still, there’s an intriguing bull case here, one reason I own the stock. Both the cash and a book value of $36 provide significant downside protection. A rebound in shale oil production and concerns about pipeline capacity could open new business for Adams. The company did acquire a trucking operation recently, perhaps signaling more aggressive capital allocation going forward. And a sale could be in the works at some point to a larger company. AE will require patience — but I still believe at some point that patience will pay off.

Nordstrom (JWN)

Source: Shutterstock

Even as a retail bear, I’m intrigued by Nordstrom (NYSE:JWN). The high-end retailer seems to have the most differentiated model in the department store space. It’s a brand notably different from that of a JCPenney (NYSE:JCP) or even a Macy’s (NYSE:M). As InvestorPlace’s Dana Blankenhorn pointed out in August, the company is aggressively reinventing itself as customers dress down — and succeeding in the process.

JWN is more expensive than those peers, but the premium is deserved. And the founding Nordstrom family remains on top of the story. It even tried to take JWN private at $50 — an offer the board refused.

With the stock now at $60, any weakness could see the family make another move, perhaps protecting the downside. In the meantime, investors own a well-run high-end business with a 2.4% dividend yield. That’s an attractive combination — particularly for retail bulls.

John B. Sanfilippo & Son (JBSS)

There are few, if any, public companies with tighter family control than nut processor and manufacturer John B. Sanfilippo & Sons (NASDAQ:JBSS). The founding family owns 89% of the non-traded Class A shares, giving it firm control from a voting standpoint. Members of the Sanfilippo family — including in-laws — comprise the majority of the board and upper management.

It might seem like there’s a risk that nepotism simply goes wild, but it’s actually been a hugely successful strategy for JBSS shareholders. The stock has moved from the single-digits as recently as the beginning of 2012 to a current price just under $70. Consistent special dividends mean that many long-time shareholders now own the stock for free — or even at a negative cost basis.

And returns should continue. The big gains have been driven by a shift toward manufacturing (the company owns the Fisher brand) instead of simply being a middleman in an industry with volatile pricing. That shift still has to play out. Newer brands like Orchard Valley Harvest capitalize on the “good for you” trend. JBSS trades at a discount to most snack companies — but its growth is better. A 14% pullback from August highs sets up a nice entry point as well.

Clearly, this is a management team worth betting on. When it comes to family-owned stocks, few have done it better than the Sanfilippos over the past few years.

Family-Owned Stocks to Buy: Estee Lauder (EL)

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Estee Lauder (NYSE:EL) is one of the premier brands in the world. And like BF.A and BF.B, the market sell-off has moved it to an attractive, if still seemingly expensive, price.

EL briefly touched a 2018 low during this week’s market volatility, and still sits 19% below June highs. At 24x+ forward earnings, the valuation still looks high. But this is a company still steadily growing earnings double-digits, with room for expansion in developing markets (notably Asia) and market share gains in the U.S. and the U.K.

As a result, EL stock — like Estee Lauder cosmetics — is a classic case of paying up for quality. It’s not likely to be a decision that investors regret.

As of this writing, Vince Martin is long shares of Adams Resources & Energy. He has no positions in any other securities mentioned.