3 Winning Tech Stocks from the Consumer Electronics Show

It’s always interesting to see what technologies are highlighted at the annual Consumer Electronics Show (CES) in Las Vegas. I use it, and so should you, as an insight into the next possible investable technology trends. After all, the U.S. consumer electronics industry’s revenues in 2018 are expected to come in at about $351 billion in 2018.

Some of the technologies on display at this year’s show were augmented and virtual reality devices, robots, and artificial intelligence (AI). But the real focus of this year’s show were the automobile and the automotive parts companies and the seemingly inexorable move toward autonomous vehicles.

More on that a bit later… first, I want to fill you in on some of the other highlights of this year’s CES.

Will VR Ever Become Mainstream?

Two companies were front and center when it came to virtual reality (VR) at CES – Facebook (Nasdaq: FB) and Alphabet (Nasdaq: GOOG). Both are still trying to persuade consumers to buy VR headsets. But with little success… the segment is expected to generate only $1.2 billion in U.S. sales in 2018.

Facebook’s Oculus Go sells for $199, while VR headsets based on Google’s Daydream VR platform, such as a device from Lenovo, sells for almost double that amount.

I think neither company will make a success of their VR efforts. To me the best in the sector is Sony (NYSE: SNE) with its high-end Playstation VR headset. It has sold over two million units of this headset in 2017, which is impressive since it only launched in October. Gaming may be the only market where VR truly becomes mainstream.

Alexa, Make Me Money

Now, let me tell you about an interesting note at the start of the conference that came from the show organizers. They said that sales of the item that has brought the consumer electronics industry the type of growth it has not seen in years – smart speakers – will peak as soon as next year. They pointed to the ‘hockey stick’ growth in sales that hasn’t been seen in eight years, since tablet computers became a mainstream product.

The leaders in the smart speaker space are, of course, Amazon.com (Nasdaq: AMZN) and Google. U.S. sales of these speakers soared 279% in 2017 over the prior year to 27 million units. Sales are forecast to rise another 60% in 2018.

I believe there is one true leader in this space, with Amazon’s Alexa being almost everywhere.

This gives you just another reason as to why Amazon is a must-own stock. At CES, vendors showed off Alexa-powered headphones, smoke alarms, cookers, showers, light switches and even mirrors (for an extra $350).

And even you leave your home and hop into your car, you may find Alexa. Amazon announced an agreement with Toyota to add Alexa to some Toyota and Lexus vehicles. Toyota thus joined a long list of auto companies – FiatChrysler, Nissan, Daimler, BMW, Hyundai, and Ford – that are either letting Alexa into their vehicles or integrating the voice service into the connectivity systems that link customers’ cars and mobile phones.

Since we’re talking about cars, let’s move on to the highlight of the 2018 CES – the automobile of the future.

Nvidia and the Automobiles of the Future

Let me start by talking about a company that was unavoidable at this year’s CES – Nvidia (Nasdaq: NVDA). Their graphics processing units (GPUs) are at the core of many machine learning and artificial intelligence solutions, including for automobiles.

Nvidia’s stock soared after it announced that it would be partnering with Volkswagen to build an intelligent (AI) co-pilot system. The system that will gather data from both in and outside the car and will use some gesture and natural language voice controls and finally combine all that with what the AI has learned about the driver. And voila – you have a helpful AI assistant. It is expected this type of system may be available as soon as 2022.

Related: 5 Growth Stocks to Ride the Semiconductor Supercycle

In a similar vein, Uber also announced that it will power its self-driving cars and trucks by using Nvidia’s AI technology.

Nvidia also said that as part of its DRIVE Pegasus (PX) AI platform, the Xavier processors would be delivered to customers beginning in the first quarter of this year. Xavier is the culmination of a $2 billion investment to expand processing power and capabilities to the autonomous vehicle marketplace.

Auto Parts Companies Nirvana

The other companies I am focused on when it comes to the future of the automobile are the auto parts firms. At whatever auto or technology show they attend across the world, they are like kids in a candy shop. And for good reason…

Currently, the vehicle manufacturers still largely control design, and nearly every other important aspect of vehicle production. But that is slipping away from them as the wave of the future is more electrical systems and electronics and not mechanical systems.

Estimates are that 50% to 70% of the value of a car in the future will lie in those electronic components, which the automakers purchase from other companies. Some of these companies, ironically enough, were spunoff by U.S. automakers years ago because Wall Street told them they were low-margin, no-growth businesses.

There are a number of very good auto parts stocks for you to choose from. Here is just one example:

A company to consider is Visteon (NYSE: VC), which designs and manufactures electronics products for automakers. Visteon provides everything from standard gauges to high resolution, reconfigurable digital 2D and 3D displays to infotainment and audio systems.

At CES, Visteon introduced its DriveCore autonomous driving platform, which is the first solution that allows automakers to build such solutions in an open collaboration model. It also unveiled its all-digital cockpit of the future with reconfigurable instrument clusters and advanced display technology along with driver monitoring, ADAS integration and other features.

I also like the fact that the company has considerable global exposure. It is enjoying strong sales in China, which is Visteon’s highest profit region. These trends together should keep the stock motoring ahead, adding to the 52% gain over the past year.

Yet, Visteon is not my top recommendation in the sector. I just revealed that company in the January issue of Growth Stock Advisor. At CES, this company showed off a fleet of driverless BMW cars that had no problem navigating the busy streets of Las Vegas. The cars dealt with traffic lights, slower and faster cars nearby, lane changes, right and left turns, jaywalking pedestrians, and faded lane markings. Only once did the driver take over, and that was to steer around pylons in the middle of the road.

As the 2018 CES brought to the fore, some of the most exciting technologies are centering on the future of the automobile. Stay tuned for even more excitement to come from this sector adding capital gains to your portfolio.

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

This Surprise Stock Could Make You Big Bucks

It’s no secret that options are often the investment vehicle of choice for “smart money” traders.  Big funds and trading firms regularly use options to establish their biggest positions – sometimes in conjunction with stock holdings, other times just using options.  It’s especially true for the most heavily traded ETFs and stocks.

Less often, you’ll see big money trades occur in low-activity options chains.  Stocks that don’t have very active options chains tend to have wider bid/ask spreads and aren’t nearly as liquid as the active options products.

If you scan the biggest options trades from any given day, you’ll see a lot of familiar names.  There will be the heaviest traded index ETFs and volatility ETFs.  There are also usually some of the big tech names near the top.  It’s relatively rare to see a name on the list that’s unrecognizable by most investors.

However, that’s exactly what happened to me just the other day.  I came across a ticker that I’m not sure I’ve ever seen on an options screener before.  The name of the company is Blackhawk Network Holdings (NASDAQ: HAWK) and the company provides prepaid products and payments services such as prepaid gift and telecom cards.

I admit, I had to look up HAWK to see what the company does.  Moreover, it trades all of 300 option contracts a day on average.  In other words, when there’s a big options trade, it’s easy to notice.

So here’s the deal…

Someone made a massive trade in HAWK – and I mean massive, especially when compared to average volume.  This trader bought 10,000 February 35 calls while selling 20,000 40 calls in the same expiration.  This type of trade is called a ratio spread and it helps reduce the cost of the trade.

In this case, the trader paid around $0.50 total.  That makes the breakeven point $35.50 at expiration in February, with max gain at $40.  Even with the double-short call at the 40 strike, the trader still dropped about $500,000 on the trade.  But, max gain is in the neighborhood of $4.5 million.

At the time of the trade, the stock was sitting at $34.  After the trade hit the wire, HAWK shot up 7% on the day.  It’s almost certainly due to the trade, which is a lot of money to spend in such a low volume options name.  It’s also obviously a very bullish trade on the stock.

There’s nothing wrong with replicating a trade like this in your own portfolio, as someone with a ton of capital clearly believes the stock is going up.  However, you probably want to avoid doing a ratio spread since it opens up your risk considerably to the upside.

Instead, I’d recommend paying a bit more and doing a simple call spread.  The 35-40 February call spread costs about $1.75 with the stock at $35.65.  That’s not too steep a price to pay since the spread is already in the money.  You can still make $3.25 on the trade, which is definitely a reasonable haul in this situation.

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Source: Investors Alley

Crypto Forecast: From $731 Billion to $10 Trillion

A broker from a big bank just did something I’d never do…

He put a number on the potential value of the blockchain market.

If you think, as I do, that blockchain technology will expand from dozens of uses to hundreds and then thousands, how can you calculate a precise market value for that?

It’s like Thomas Edison trying to predict in the late 1800s how much the electricity market would be worth a few decades into the 20th century.

Did he realize at the time that almost everything, not just lights, that we make and use would be electrified?

Probably not. How could he?

(Perhaps the one thing he thought would be electrified – vehicles – didn’t catch on until more than 100 years later!)

I believe at some point in the future (10 years? 20 years?), most of the services we’ll be using on a daily basis will be enabled by the blockchain.

Again, how can you put a price on such a ubiquitous technology?

Is it in the tens of billions? Hundreds of billions? More?

A Report From Deep Inside Wall Street

That’s the best thing about the report this broker put together.

It does not come from crypto investors talking their own book… initial coin offering companies hyping their future growth… or blockchain evangelists espousing best-case scenarios as a given.

Mitch Steves, the author of this report, is a traditional Wall Street equity analyst. He works for the RBC Capital Markets subsidiary.

His only connection to blockchain and crypto?

Among the companies in his bailiwick is NVIDIA. It makes graphics processing units for mining cryptocurrencies.

By the way, he says the $4 billion-plus market for mining cryptocurrency is here to stay.

Steves says that blockchain technology is misunderstood – that store of value and payment use cases are the most commonly cited but “the least interesting.”

The single most “positive technology” breakthrough is the one staring us in the face: The blockchain, the underlying technology, HAS NEVER BEEN HACKED.

(And, in my opinion, WILL NEVER be hacked.)

This is no small thing. Steves compares Box, a content management platform, to Filecoin, a decentralized blockchain equivalent, to highlight the differences…

With Box, your data is owned and controlled by a third party that has access to your information (a photo loaded can be retrieved by anyone with access to Box servers – employees). With Filecoin, your storage is distributed and decentralized, making the holders unable to retrieve your photo (they would need to hack every computer on the decentralized network – blockchain). Your information is now secure, and without your private keys, it cannot be accessed.

This is an early case of how a globally decentralized network of computers can work using the blockchain. Steves calls this network of computers the “World Computer.”

He says that same concept can be applied to a “wide variety of decentralized applications (aka ‘dapps’).”

I completely agree.

Rose-Colored Glasses?

What Steves is saying is reasonable and, frankly speaking, not entirely novel. People who aren’t playing close attention may be confusing hacks of exchanges and individual wallets (which has happened) with hacks of the blockchain itself (which has never happened).

But insiders have well understood the security benefits of putting data, transactions, assets, documents and sensitive information on the blockchain… and how the blockchain makes it fast, easy and secure to track these things.

But it’s nice hearing this confirmed by a big bank with no vested interest in the crypto or blockchain markets.

And because Steves hails from outside the crypto community, he openly acknowledges the “many risks to crypto.” No rose-colored glasses for him.

Among the risks, he lists the possibility of an attack if a single entity were to garner more than 50% of the computing power (which, I should add, would be pretty near impossible).

Other risks mentioned? Coordinated attacks to manipulate prices… and the potential for smartphone wallet hacking.

The Worth of the Market Crypto Will Address?

How he arrives at this big round number turns out to be the most disappointing part of his 36-page report.

He basically took a third of the roughly $30 trillion in assets held in offshore funds and gold. Just a rough stab, in other words.

But perhaps that’s as it should be. At this early stage, trying to do anything more would be a reach.

We simply don’t know how big this number will be. Anybody who says differently is lying to themselves or everybody else.

However, I believe it will be a big number. Blockchain technology is driving a surge of innovation in the development of new protocols and blockchains.

There’s a long way to go. And nothing is a given at this point. But decentralized computer technology has the potential to reinvent huge swaths of the global economy.

With that kind of upside, even a modest investment could yield quite a large return. We can help you identify the best blockchain technologies raising money.

Just click here if you’re interested.

Good investing,

Andy Gordon
Co-Founder, Early Investing

Source: Early Investing

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Buy These 3 Stocks to Soar Thanks to China’s Hunger for Clean Skies

One of the main messages I give you in my articles is that you have to pay attention to global events to find the best investment opportunities before Wall Street does.

Another great example of that occurred in March at China’s annual parliamentary meeting. The one main takeaway from that meeting could be summed up by one sentence that was repeated again and again at the meeting – “We will make our skies blue again.”

The Chinese are (finally) very serious about curbing the rampant pollution in their country. This has boosted industrial metals prices globally as China curbs output of aluminum and steel in the country.

And China has cut back on the use of coal for both power and heating purposes. As a substitute for coal, the Chinese government is placing a major emphasis on natural gas.

Therein lies the opportunity…

China’s LNG Imports

While China does produce some of its own natural gas and imports more gas from Russia via pipelines, the all-of-a-sudden big increase in natural gas demand has had almost immediate effects.

In early December, that demand pushed LNG (liquified natural gas) prices in Asia to a three-year high, 20% higher than a year ago – and up 80% from the 2017 low – at above $10 per million BTU. According to energy consultants Wood Mackenzie, import volumes of LNG were 48% higher in the first ten months of 2017. This follows a 25% jump the year before.

A cold winter in northern China raised demand even more and made authorities desperate to meet the need. In December, Chinese oil company CNOOC (NYSE: CEO) was forced to hire over 100 LNG-carrying trucks to bring LNG over 1,300 miles from the south of China, where the LNG import facilities are, to the northern parts of the country where the cold of winter was biting hard.

And while prices have fallen somewhat since with a January thaw, this trend toward higher LNG demand from China is a feature of the energy market that will be with us for many years.

In an interesting side note for natural gas, there is talk in the market that energy kingpin Saudi Arabia may (in the relatively near future) have to import natural gas in the form of LNG in order to meet domestic needs. Demand there has risen by 50% over the past decade while proven Saudi gas reserves have only risen by 20%.

To that end, it is believed Saudi Arabia is interested in funding LNG projects around the world. Are President Trump and U.S. gas producers listening? I hope they are.

US LNG Exporters

Especially since U.S. capacity to process LNG is set to grow nearly seven-fold by 2019 as five export terminals open.

Primary among U.S. LNG exporters is Cheniere Energy (NYSE: LNG), which is the owner of the first LNG export terminal in the U.S. that has been operating since early 2016. It is exporting at its Sabine Pass facility with three trains and a capacity of about two billion cubic feet of gas per day. Its total capacity is expected to be about five billion cubic feet per day once all five trains are completed (the fourth train was recently completed). An LNG train is a liquified natural gas plant’s liquefaction and purification facility.

Chiniere’s first mover advantage is evident. In November, it signed an $11 billion memorandum of understanding for long-term LNG sales with China National Petroleum Corporation. CNPC is the parent of PetroChina (NYSE: PTR).

However, competition for Cheniere is underway here in the U.S. There are five other facilities, in addition to Cheniere’s, that will add roughly 7.5 billion cubic feet of LNG export capacity in 2018 and 2019. Here is the list of these facilities for you:

Cove Point, Maryland terminal just started operating in December and is owned by Dominion Energy (NYSE: D). It used to be an import terminal that was retooled as an export terminal with a capacity of 0.82 billion cubic feet per day.

 

Cameron LNG, Louisiana is owned by Sempra Energy (NYSE: SRE) and is scheduled to begin operation in 2018. It has three trains currently under construction with the first train expected to begin operation in early 2018, and the second and third trains are expected to start up during the second half of 2018. The three trains will have a capacity of 2.1 billion cubic feet per day.

Sempra Energy is also in the permitting stage of constructing an expansion to the facility, which would add a fourth and fifth train. Project completion for the expansion is expected sometime in 2019.

Elba Island, Georgia is a relatively small-scale facility owned by Kinder Morgan (NYSE: KMI) with a capacity of 0.35 billion cubic feet per day. It was originally constructed as a regasification plant for imports of LNG and it is being retooled as an export facility. The project will use ten small scale liquefaction units, constructed in two phases. The first phase will begin service in mid-2018, while the second will come online in early 2019.

Freeport LNG, Texas has three trains currently under construction. It will begin operation between the end of 2018 and the third quarter of 2019, with a combined capacity of 2.14 billion cubic feet per day. A fourth train is under development.

Corpus Christi, Texas is currently under construction on 1,000 acres controlled by Cheniere Energy. It is being designed for five trains and construction on the first and second trains began in May 2015 and is now about 70% complete. The first train is expected to begin operating in the first half of 2019 with the first three trains having a combined capacity of 2.14 billion cubic feet per day.

While I do like Cheniere Energy, there are lots of LNG projects coming online in China’s neighborhood – namely Australia. So instead of focusing on just LNG exporters, I am also looking at the carriers of all that LNG to China – the LNG shipping companies.

LNG Shipping Companies

These companies are in the sweet spot between rising Chinese demand for LNG and limited supplies of ships. Transporting LNG requires specialized tankers and the market for these tankers has completely flipped. From a glut a few years ago, there is now a shortage of these specialized tankers.

This shortage has led to a doubling of LNG tanker rates since April 2016. And there is definitely room for further increases. Prices could double again and still not reach the highs set five years ago.

The LNG carrier shortage will not be alleviated quickly either since it takes about 30 months to build such a vessel. Between 2012 and 2014, there were orders for 66 LNG carriers. But with that aforementioned glut, orders dropped to only eight in 2017.

This will obviously benefit the companies that currently own LNG tankers. But be careful here – many of them are heavily loaded with debt. Here are two companies though I am looking at:

Golar LNG (Nasdaq: GLNG) – its stock is up nearly 20% over the past year. The company is one of the world’s largest independent owners and operators of marine-based LNG midstream infrastructure and is involved in the liquefaction, transportation and regasification of natural gas.

Related: A Top 10% Yield Stock to Own for Growth and Income

In others words, Golar is no mere LNG shipper, although it has 16 LNG shipping vessels. It is also focused on other aspects of the LNG pipeline including floating LNG liquefaction (FLNG) and floating storage and regasification units (FSRUs). It is the first company to convert ships into FSRUs and FLNGVs (floating liquefied natural gas vessel). This sets it apart from most of its competitors.

If you are looking at more of a pure-play LNG shipper, there is Gaslog Ltd. (NYSE: GLOG), whose stock is up nearly 30% over the last year, with most that gain occurring in the last three months.

Its fleet consists of 22 LNG ships on the water with another five ships on order being built. And like Golar, it is also becoming involved with FSRUs.

However, I like Gaslog because it is one of those carriers, along with Teekay LNG Partners L.P. (NYSE: TGP), that is greatly benefiting from the diversion of more and more LNG tankers to China. The daily rate of a 160,000 cubic meter LNG tanker soared to $80,000 in December from the 2017 low of $30,000 in April, according to ship broker Clarkson.

The third quarter of 2017 for Gaslog already saw record revenue and EBITDA. And thanks to Chinese demand, this should continue for the foreseeable future.

If you are looking more for income than capital gains, but still want to participate in the China LNG story, consider limited partnerships from the shipping firms.

Gaslog has a limited partnership worth a look, Gaslog Partners LP (NYSE: GLOP), which is up 5.77% over the past three months with a current yield of 8.36%.  And there is also the aforementioned Teekay LNG. It has risen nearly 13% over the past three months and has a 2.71% yield. Teekay will be receiving 11 new LNG vessels by the end of 2018.

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

Source: Investors Alley 

4 Bitcoin Alternatives That You Need for 2018

Bitcoin Alternatives: NEM

Source: Shutterstock

I first featured NEM as a cryptocurrency idea for our InvestorPlace readers last October. With a then-price of less than 21 cents, NEM was one of the cheapest major altcoins available. Given that my article was one of the most heavily visited on the topic, I sincerely hope my readers acted on my suggestion. Today, the NEM price is a dime under $2.

If you’re doing the calculations, NEM jumped approximately 800% in two-and-a-half months. You will not find such performance buying and holding equities in the pedestrian stock markets. My absolutely best stock ideaBitcoin Investment Trust (OTCMKTS:GBTC), gained only 447% in half-a-year’s time. In contrast, you can take smaller-sized risks with altcoins, and make more money than you would in the traditional markets.

Of course, most people might get discouraged about the 800% move, thinking that the best is behind us. Consider, though, the remarkable case of ripple. Like NEM, ripple is a heavily diluted token, with nearly 39 billion coins in circulation. That hasn’t stopped ripple jumping from 19 cents to nearly $4 in the past three months.

More importantly, NEM arguably has a better blockchain. While ripple is exclusively focused on streamlining bank transactions, the NEM blockchain is open to multiple applications. Furthermore, businesses are attracted to NEM because its blockchain is scalable to increasing demand.

Given the success of similar altcoins, you’d be crazy not to try your hand at NEM!

Bitcoin Alternatives: Ethereum

Source: Shutterstock

Prior to the aforementioned ripple coin’s rally, ethereum used to be the number-two cryptocurrency by market capitalization. Despite ripple’s shocking price explosion, ethereum still commands tremendous respect. Coinbase, the world’s most popular cryptocurrency exchange, offers ethereum on its trading platform, not ripple. But it might surprise some newcomers that ethereum isn’t the original coin that bears its name.

That honor belongs to ethereum classic. The entire story of how ethereum and ethereum classic were born is beyond the scope of this article. But a long story short, in the run-up to creating a fully-fledged market for the original ethereum, a hacker exploited a loophole in the system, draining out ether tokens. The crypto community panicked as ethereum backers debated on a solution.

A consensus of supporters decided to create a hardfork of the ethereum blockchain. However, a significant amount of dissenters existed. They objected to the hardfork on the basis that it violated the immutable principle of a blockchain application. Rather than follow the new blockchain pathway, the dissenters remained on the original. Thus, ethereum classic came to existence.

The hardforked ethereum is what most investors today get excited about, and for good reason. Its price will very likely hit and exceed $1,000. However, ethereum classic is the better deal. At under $33, if the original could duplicate half of the offshoot version’s success, it would be a phenomenal investment.

Bitcoin Alternatives: Steem

Source: Shutterstock

The biggest hesitation that investors have against altcoins is that they must spend real money to acquire virtual currencies. We often hear criticisms that bitcoin is simply vapor that is destined to vanish, eliminating billions of actual dollars. But what if there was a way to acquire cryptocurrencies for free? Steem is the answer to this seemingly rhetorical question.

The steem coin is the underlying cryptocurrency of Steemit, a blockchain-powered social media platform. Unlike Facebook Inc (NASDAQ:FB) or Twitter Inc (NYSE:TWTR), regular folks can earn money through posting original content. Before you dismiss Steemit as a too-good-to-be-true fairy tale, take a look at the network’s top earners. With just one post, you can make hundreds of dollars, even thousands.

Better yet, you can transfer the steem coins you earn to a third-party exchange like Bittrex. Using my Bittrex beginner’s guide, you can easily sell your steem coins for bitcoin. From there, you have access to hundreds of altcoins. Using the Steemit network is undoubtedly the least riskiest way of building a cryptocurrency portfolio.

However, there is a catch: it’s very difficult to build a profitable steem account through blogging alone. In order to “juice up” your profitability potential, you can purchase “steem power” coins. This of course is a capital risk.

But with most major altcoins flying through the roof, getting involved with steem today could pay huge dividends later.

Bitcoin Alternatives: Stellar

Source: Shutterstock

It’s hard to imagine any asset priced below a dollar as having a solid profitability potential. Hardened market investors understand that penny stocks are usually only attractive because of their unit price. However, with youth comes blissful ignorance. While older investors avoid cheap investments like the plague, Millennial cryptocurrency investors run to them like flies on stink.

When it comes to the digital markets, though, it pays to listen to youth. This is particularly the case for stellar. A little more than a week ago, stellar traded hands at 22 cents. At time of writing, the digital token came within striking distance of a buck. That’s serious performance given the ridiculously short time frame.

More importantly, I think stellar has additional room to run. Unlike the scalability-challenged bitcoin, the stellar blockchain closes transactions within seconds, not hours or days. As the blockchain concept becomes an everyday reality, transaction speed will be critical.

Furthermore, stellar extends the lightning-quick transactions to fiat currencies. For example, users can swiftly convert dollars to euros, rather than relying on cumbersome and expensive banking institutions. Recognizing the potential, International Business Machines Corp. (NYSE:IBM) uses the stellar blockchain to develop a payments system with large banks.

With so much opportunity, and an accessible price point, stellar is one of the best altcoins to buy in 2018!

Can a $10 Bill Really Fund Your Retirement? The digital currency markets are delivering profits unlike anything we’ve ever seen. ​23 recently doubled in a single week. And some like DubaiCoin have jumped as much as 8,200X in value in 18 months. It’ unprecedented... but you won’t receive any of the rewards unless you put a little money in the game. Find out how $10 could make you rich HERE. ​

Buy This Tech Stock Instead of Apple, Facebook, or Google… or Even Bitcoin

I’m about to unveil to you another insight on what I believe is crucial to successful investing. And it’s one that is really just basic common sense.

There will always be hot opportunities and glamour stocks that ‘everyone’ is chasing in the stock market. You need look no further than Tesla Motors (Nasdaq: TSLA). I firmly believe though you should not buy the hype, that the best investing opportunities are found just outside the hype.

The classic example of this is the California Gold Rush. Let me take you back in time for a moment.

History Lesson

On May 12, 1848, a San Francisco store owner by the name of Sam Brannan held a ‘one-man parade’ to announce the start of the California Gold Rush. He went up and down Market Street in San Francisco shouting, “Gold! Gold from the American River!”, while waving a bottle of gold dust.

Gold fever took hold and many residents went off in search of riches.

Brannan had good reason for this one-man advertising campaign. You see he owned the general store in that served miners at Sutter’s Mill, where gold had indeed been discovered. And in the intervening week between the actual discovery of gold and his ‘advertising campaign’, Brannan had bought all the picks and shovels in the city.

Needless to say, Brannan became the Gold Rush’s first millionaire. And a timeless investing maxim was born, “when there’s a gold rush, sell shovels.”

It is this line of reasoning that led me to a recent addition to the Growth Stock Advisor portfolio. It is a leading provider of microcontrollers. But before I give you the details on it, let me fill you in on the microcontroller market and why you need to be invested in it.

What Is a Microcontroller?

A short definition of a microcontroller is that it is a tiny computer on a single integrated circuit containing a processor core, memory, and programmable input/output peripherals.

Microcontrollers (MCUs) are used in automatically-controlled products and devices. Examples include vehicle engine control systems, implantable medical devices, remote controls, power tools, appliances, smartphones and other embedded systems. Microcontrollers are also used in our smart credit cards and electronic passports.

By reducing the size and cost, microcontrollers make it economical to digitally control more and more devices and processes. In simple terms, the entire wonder that is supposed to be the Internet of Things (IoT), with 30 billion connected devices by 2020, would not be possible without microcontrollers.

MCUs are a low-cost and low-power bridge between the sensor and gateway parts of IoT devices. They link sensors to the IoT nodes and serve as sensor hubs in a wide array of IoT devices to gather and log data onto a network.

Microcontroller Market

The IoT microcontroller market is segmented based on types, which are first sub-divided into 8 bit, 16 bit and 32 bit MCUs with 32 bit being the largest segment thanks to its higher processing power. MCUs are also segmented on the basis of application – consumer and home appliances, automotive, industrial, medical, security ID, solar PV and smart grid.

The global microcontroller market is experiencing robust growth at the moment that is set to continue. The period from 2017 to 2024 is forecast to have approximately a 16% compound annual growth rate (CAGR).

(World Microcontroller Market, 10 Years Leading to 2024, in Billions USD)

Demand in key application areas such as automotive, consumer electronics, smart grid systems, solar power and healthcare is feeding that growth. The biggest future driver behind the growing demand for microcontrollers will be the Internet of Things, robotics and factory automation.

However, do not overlook the automotive market. Traditionally, automakers have used MCUs for engine control, anti-lock brakes, power steering, airbags and other applications. But now, microcontrollers are also needed in sophisticated safety features such as advanced driver assistance systems (ADAS).

Yet, despite the soaring demand, the industry has gone through tough times.

MCU Market Upswing

The problem for the industry has been too many players producing too many microcontrollers, driving down prices and profits. For example, between 2006 and 2015, the average price for an average 32-bit MCU fell 17% per year from $5.00 in 2006 to $0.92 in 2015.

But that is beginning to change, making it the right time for you to invest in the industry.

According to research firm IC insights, the average overall price for microcontrollers in 2016 rose 8% in 2016 and will rise another 2% in 2017. Going forward, it sees a steady climb in prices – due to that overwhelming IoT demand – up 3% in 2018, 4% in 2019 and 1% in 2020.

The price for that average 32-bit MCU increased 18% to $1.09 in 2016. Keep in mind that this is the largest segment of MCUs, and will account for 60% of total MCU revenue and 43% of unit volumes this year. These price increases will mean, according to ICU, that revenues for the industry will be in excess of $25 billion.

That’s a very positive trend. And so is the industry’s move toward consolidation, as companies jockey to be best positioned for a future dominated by the Internet of Things.

You’ll Need a Scorecard

The moves made in this bid for supremacy have scrambled the standings of the top companies in the MCU industry. You’ll need a scorecard to keep track. But let me briefly fill you in on the global standings, as of the end of 2016.

The former number one company is now number two, Japan’s Renesas (OTC: RNECY) and its 16% market share.

The new number one (19% market share) is NXP Semiconductors NV (Nasdaq: NXPI), thanks its purchase of Freescale in 2015, moving it up from sixth. NXP itself is now the subject of a takeover bid from Qualcomm (Nasdaq: QCOM).

Fourth through seventh are: Korea’s Samsung (12%), STMicroelectronics NV (NYSE: STM), Germany’s Infineon Technologies (OTC: IFNNY) and Texas Instruments (Nasdaq: TXN). Coming in eighth is Cypress Semiconductor (Nasdaq: CY), which moved up the standings thanks to its purchase of Spansion in March 2015.

Our recommendation of Microchip Technology (Nasdaq: MCHP) is now third globally, up from fifth, with a 14% share of the global market. Its 2016 sales rose 50% to $2 billion due to its $3.4 billion acquisition of Atmel in the second quarter of 2016.

Microchip Technology

Let me fill you in now on Microchip Technology, whose microcontrollers are likely all through your home – from your garage door opener to your coffee machine to your children’s or grandchildren’s toys.

It had a tough start in its corporate life. It was a failing spinoff of General Instrument that was acquired by venture capitalists in 1989. It went public in an IPO in 1993. Luckily, it has had good management teams and has grown through the years via acquisitions until today it is a major producer of microcontrollers (64.3% of revenues), memory and analog semiconductors, and interface products for embedded control systems.

I believe the purchase of Atmel last year was a game changer for MCHP and did a lot more for the company than just moving it up the market share standings. It is now one of the best positioned companies in the entire industry.

Prior to the Atmel purchase, the company had been the only major MCU supplier not licensing ARM CPU technology. This architecture comes from the U.K.’s ARM Holdings, which was snapped up by Japan’s Softbank (OTC: SFTBY) in 2016 for $32 billion.

For about a decade, Microchip Technology had developed and sold 32-bit MCUs based on RISC-processor architecture developed by the U.K.’s MIPS Technology, which is now owned by another U.K. firm, Imagination Technologies. The latter was a major Apple supplier, which was recently dumped by Apple.

But with the proliferation of Internet of Things devices, the ‘wind’ is clearly blowing in the direction of 32-bit MCUs using the low-power ARM architecture. Atmel’s strength is that it is strong player in the ARM microcontroller market.

Security too is of major importance in any IoT designs. Here again, Atmel is a big plus for MCHP. Its expertise in technologies such as Trusted Platform Module (TPM) and crypto memories can complement Microchip MCUs in securely connecting objects.

Consistency Is Key

As with my other recommendations, I look for companies with good global exposure. That is crucial here since overall the Asia-Pacific region accounts for about 35% of the microcontroller market. This region did account for 55.8% of net sales in the Microchip Technology’s latest quarter.

Its revenues aren’t overly dependent on any one sector either. The last quarter’s breakdown on its MCU segment among the major users is as follows: industrial – 35%, automotive – 25%, consumer – 24%.

Another item I like to see from a company is consistency. Despite the tough times in recent years for the industry as a whole, the company has managed to report 106 consecutive quarters of profitability!

Microchip Technology is now one of the fastest-growing global providers of 16-bit and 32-bit microcontrollers. This business continues to outperform the industry, which I think will enable it to continue gaining significant market share. Its analog business (about 25% of revenues) is also fast becoming one of the biggest analog franchises in the market.

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Source: Investors Alley

5 REITs Increasing Dividends in February

With the start of a new year, it is natural to look for ideas to help your stock portfolio grow during the year. One bit of assistance I like to provide is to list those real estate investment trusts (REITs) that should announce higher dividend rates in the upcoming months. This knowledge can give you a jump on the rest of investing public, which will be surprised when the positive news is announced.

I maintain a database of about 130 REITs. With it I track current yields, dividend growth rates and when these companies have usually announced new dividend rates. Most REITs announce a new dividend rate once a year, and then pay that rate for the next four quarters. Currently about 90 REITs in my database have recent and ongoing histories of dividend growth. Out of that group, higher dividend announcements will happen during almost every month of the year. In 2017, the overall REIT sector ended flat for share values, with a total return consisting of the dividend yields. Through the same period, many REITs increased their quarterly or monthly dividend rates. As a result, current yields are comparatively higher than a year ago for many stocks in the sector. Higher dividend announcements can be the catalyst that starts the price recoveries for individual REIT shares.

February is an active month for REITs to announce dividend increases. Many companies use their announcement of the previous year’s financial results as a good time to declare the dividend rate for the upcoming year. Here are five REITs that I expect to announce significant dividend increases next month.

First Industrial Realty Trust, Inc. (NYSE: FR) acquires, owns and leases out industrial properties used by light industrial, warehouse and R&D companies. The company has grown its dividend by over 100% over the last two years, including a 10.5% increase last year. For the first nine months of 2017, FFO per share was up 7.5%. First Industrial pays out about 50% of FFO as dividends. Net income per share growth – which drives the minimum dividend paid – indicates another 10% dividend increase is probable.

The new dividend rate is announced with the fourth quarter earnings report that comes out in the second half of February. Record date will be the end of March with a late April payment date. FR yields 2.8%.

QTS Realty Trust Inc (NYSE: QTS) is a mid-cap – $2.5 billion value – data center REIT that came to market with an October 2013 IPO. The company is growing rapidly, but FFO per share growth is lagging revenue growth. Reported 2017 adjusted FFO per share was up 5% for the first nine months of last year.  In February 2017, the company announced an 8.3% dividend boost.

This year I forecast a 5% to 7% increase. The new dividend rate should be declared in late February with an early April payment and around March 20 record date. QTS yields 2.9%.

National Health Investors Inc. (NYSE: NHI) is engaged in the business of owning and financing healthcare properties. Its portfolio consists of real estate investments in independent living facilities, assisted living facilities, entrance-fee communities, senior living campuses, skilled nursing facilities, specialty hospitals and medical office buildings. Last year the company increased its dividend by 5.6%. Through the 2017 third quarter AFFO per share was up 9.3% compared to the same period in 2016.

The company should announce an 8% to 9% dividend increase this year, compared to 5.5% for the last couple of years. The next dividend will be announced in mid-February with an end of March record date and payment in early May. NHI currently yields 5.1%.

Weingarten Realty Investors (NYSE: WRI) is engaged in the business of owning, managing and developing retail shopping centers. Its 230 plus properties consist primarily of neighborhood and community shopping centers. This REIT has increased its dividend every year since 2010. Last year the company increased its quarterly dividend by 5.5% and paid a special $0.75 per share dividend in December. For the first three quarters of 2017, core FFO per share was 5.8% higher than over the same period in 2016. Another 6% dividend increase in 2016 seems probable. The next dividend will be announced in mid-February. Ex-dividend will occur in early March, with a mid-March payment date. WRI currently yields 4.8%.

Digital Realty Trust, Inc. (NYSE: DLR) is a large-cap data center REIT with an 11-year history of above average dividend growth. Last year, the dividend was increased by 5.7%, compared to the 10-year average annual double-digit percentage bump. Growth in 2017 has improved and I expect a 7% to 9% dividend increase for 2018.

The next dividend will be announced in mid-February, with a mid-March record date. Payment of the new dividend rate will start at the end of March. DLR currently yields 3.3%.

BONUS RECOMMENDATION:

AvalonBay Communities Inc (NYSE: AVB) business is the development, redevelopment, acquisition, ownership and operation of multifamily (apartment) communities primarily in New England, the New York/New Jersey metro area, the Mid-Atlantic, the Pacific Northwest, and Northern and Southern California. The company is focused on the high-end of the apartment spectrum. AVB stopped growing dividends, but did not cut them, from 2008 through 2011. In recent years, the payout has grown by mid-single digits, including a 5.2% increase in 2017. FFO growth in 2017 points to another 5% to 6% increase this year. AvalonBay announces a new dividend rate in early February, with an end of March record date and payment in April. The stock yields 3.3%.

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Source: Investors Alley 

Why REITs Will Soar in 2018 (and 5 to Buy Now)

The REIT bears have gone too far this time.

In the past few days, I’ve seen a lot of panicky commentary warning that incoming Federal Reserve chair Jerome Powell will raise rates too fast after he takes over in February—and that would be a disaster for real estate investment trusts (REITs).

Don’t take the bait.

Because it all adds up more fear-fanning headlines from a business press desperate to make something out of nothing.

I’ll show you why in a moment. Then we’ll move on to 3 corners of the REIT space (and 5 stocks in particular) that underperformed in 2017—and are poised to spring back big time in 2018.

The Powell Factor

First, unless you’ve been avoiding the Internet and all newspapers for the last 6 months, you know the Fed plans hike rates further this year.

My colleague Michael Foster rattled off the reasons why in a November 21 article, but they boil down to rising wages, falling unemployment and an uptick in inflation, though it’s still below the Fed’s 2% target. That’s got futures traders pegging the next hike for the Fed’s March 21 meeting.


Source: CME Group

But whether we get the 2 rate hikes the market expects this year or 3 or more, as some talking heads predict, we can be sure of one thing: Powell will steer the same course as his predecessor, Janet Yellen.

How do I know?

Because he’s never dissented on any Fed decision since becoming a Fed governor in 2012, according to MarketWatch.

Which brings me to the relationship between rates and REITs, a linkage most people have 100% backwards—handing us a terrific opportunity to profit.

The Truth About Rates and REITs

Most folks think rising rates hurt REITs for 2 reasons.

The first: higher rates increase REITs’ borrowing costs … and it is true that REITs usually carry above-average debt to finance property purchases and renovations.

The second: that rising rates make so-called “safe” investments like CDs and Treasuries more appealing to income seekers compared to REITs.

Let me take the second point first.

As I write, the 10-Year Treasury yield sits at 2.5%, while the benchmark Vanguard REIT ETF (VNQ) pays nearly twice as much—4.3%. And plenty of REITs pay more, like a hotel operator I’ll show you in a moment that yields 7.0% today!

I think you’ll agree that this is still a big gap to close, and it will be a long time—if ever—before CDs, treasuries and the like manage to pull it off.

As for the first point, rising rates do increase REITs’ borrowing costs. But that’s only half the story! Because those hikes also come with a hot economy, which drives up rents and demand for the offices, warehouses, apartments and other properties REITs rent out.

The result? A rise in funds from operations (FFO, the REIT equivalent of earnings per share) that dwarfs higher interest costs and ignites REIT share prices.

If you don’t believe me, check the history. This is exactly what happened from July 2004 through June 2006, when the Fed hiked rates from 1.25% to 5.25%, and 10-year Treasury yields spiked to 5.14%.

How did REITs do? They soared 48%, including dividends, nearly tripling up the S&P 500’s gain.

Biggest REIT Myth Busted

The takeaway? Now is the time to buy REITs … especially if you see any of the ones on your watch list take a dip around the time of a rate-hike announcement (watch for that around March 21).

5 Top REITs From 2017 That Are Primed to Soar in ’18

To get you started, I’ve pored over my last 12 months of ContrarianOutlook.com articles to bring you 5 solid REITs, each from a different part of the REIT market.

They are: hotel operator Hospitality Properties Trust (HPT), healthcare property owner National Health Investors (NHI), apartment landlord Essex Property Trust (ESS), self-storage manager Public Storage (PSA) and government building owner Easterly Government Properties (DEA).

All have strengths that safeguard our cash and set us up for gains in 2018. HPT, for example, owns 323 hotels that focus on business travelers and operate under household names like Radisson, Holiday Inn and Marriott. The REIT also cuts its reliance on hotels with its 199 Petro and TA travel centers, all of which are located along the interstate highway system.

These are terrific businesses that will grow as trucking freight volumes zoom ahead 3.4% annually through 2023, according to the American Trucking Association.

Essex, meanwhile, boasts 59,240 apartment units in prime West Coast markets like San Francisco and LA.

As I told you in a December 7 article, Essex is cashing in as millennials skip home ownership in favor of posh downtown pads, while baby boomers swap their suburban addresses for similar abodes. (Self-storage names like PSA, by the way, benefit from these exact same trends.)

Meantime, National Health Investors and Easterly Government Properties add ballast to our portfolio. NHI provides financing for steady medical tenants such as seniors’ housing facilities and specialty hospitals, while Easterly rents its 46 sleek, modern properties to government tenants like the FBI.

Your 5-REIT Portfolio: What the Numbers Say

So with that, let’s put our 5 REITs to the test, starting with 3 crucial numbers for us income hounds: dividend yield, dividend growth and payout ratio (dividends as a percentage of core or normalized FFO; a vital measure of dividend safety).

As you can see, these 5 names give us a nice mix of high yields and dividend growth. (A side bonus: as I recently showed you in an example using Boeing (BA), a rising payout is the No. 1 driver of stock prices.)

And all of those payout ratios (including DEA’s 85.4%) are easily manageable for these REITs, which benefit from rock-solid tenants (who wouldn’t want to rent space to Uncle Sam?) and high occupancy rates—DEA’s currently sits at an unheard-of 100%!

Finally, there are some real bargains in this bin. HPT, for example, trades at a ridiculous 8.3 times adjusted FFO, with NHI and DEA at an attractive 14.5 and 18.2 times, respectively.

It’s no surprise that the two priciest trusts are Essex (20.3 times core FFO) and Public Storage (20.6). But those are fair prices (they’re both below the S&P 500’s 21.8 and down from a year ago) considering these are two of the fastest dividend growers in our basket.

My take? I expect REITs to do a big U-turn in 2018, when the market finally realizes rising rates aren’t a threat—and these 5 are in a great position to benefit.

Revealed: The Best 8% Dividend for 2018

My top REIT pick for 2018 boasts an even higher dividend than any of the 5 trusts above (8% as I write this) and grows its payout every single quarter.

In fact, this powerhouse REIT has increased its payout for 21 straight quarters, so your forward yield is actually 8.4%, given that we’re going to see 4 more dividend hikes this year!

The best part? You can buy in cheap, at just 10 times FFO!

However, I expect this stock’s valuation and price to rise 20% in 2018 as the herd finally gets used to the fact that rising rates are here to stay—and that they’re actually a benefit to REITs.

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Source: Banyan Hill 

10 Strong Buy Stocks From 2017’s Best Analysts

What are the top analysts who consistently get it right recommending strong buy stocks for 2018? TipRanks tracks and measures the performance of over 4,700 analysts to identify the top expertsin each sector who consistently outperform the market.

Analysts are ranked based on two crucial factors: success rate and average return per recommendation. Following the top analysts of 2017 is also an effortless way to find under-the-radar stocks that experts believe have strong investing potential. For this piece, however, I went one step further.

I searched for the double whammy of 1) stocks specifically recommended by the Street’s top analysts and 2) strong buy stocks that also have the backing of Wall Street.

That’s why here I only include stocks with a ‘Strong Buy’ analyst consensus based on the past three months of ratings. Using this consensus, investors can be reassured that these stocks are the crème de la crème as far as the Street is concerned.

Bearing this in mind, let’s dive in and take a closer look now:

Strong Buy Stocks: Lam Research (LRCX)

Source: shutterstock

B Riley FBR analyst Craig Ellis is the No.1 analyst out of over 4,700 analysts tracked by TipRanks. No wonder — he has an impressive 81% success rate and 37% average return over 391 ratings. Right now he is singing the praises of chip equipment maker Lam Research Corporation (NASDAQ:LRCX). He says the recent blow out results for chipmaker Micron “support the case for Memory strength to continue well into C18 albeit with DRAM tighter than NAND.”

Positive factors include “steadily increasing end demand diversification and rising system content to meet the Tech industry’s various next-generation initiatives.” As a result, Ellis is confident that bear concerns about a massive NAND correction next year are overblown.

Indeed, he sees LRCX spiking from $192 to $250- the Street’s highest price target yet.

Overall this ‘Strong Buy’ stock scores 11 buy ratings versus just two hold ratings from top analysts in the previous three months. These analysts have an average LRCX price target of $222- –15% upside from the current share price.

Strong Buy Stocks: First Data (FDC)

First Data Corporation (NYSE:FDC) offers retailers card and mobile payment acceptance capabilities for both online and point-of-sale transactions. Right now, it’s one of the largest payment processing companies in the world with 6 million business locations. Top Barclays analyst Darrin Peller sees First Data soaring 44% to hit $24 in the coming year.

Peller reiterated his “buy” rating on the stock on Dec. 5. He says his channel checks and “deep dive” analysis reveal that First Data’s risk/reward ratio is “compelling” into 2018. The analyst sees 2018 as an inflection point for the company’s joint venture channel growth.

In total, First Data has received seven buy ratings and two hold ratings from analysts in the past three months. While Peller is much more bullish than consensus, the average analyst price target of $21 still suggests 26% upside from the $16.60 share price.

Note that Peller is one of the Top 100 analysts tracked by TipRanks.

Strong Buy Stocks: Apple (AAPL)

4 Reasons Apple Inc. (AAPL) Stock Investors May Want to Reconsider Their Trade

Source: Shutterstock

Heading into 2018, Apple Inc. (NASDAQ:AAPL) has retained its ‘Strong Buy’ analyst consensus rating. In the previous three months, analysts have published 21 buy ratings and seven more cautious hold ratings. If we look at the $191 average price target from all these analysts, we find potential upside of 11%.

Encouragingly Key Banc’s Andy Hargreaves is optimistic on AAPL, even without blockbuster iPhone sales. He says: “We do not expect upside to consensus iPhone unit estimates [of 240 million] in FY18.” Instead, he is looking for sales of 237 million units for 2018 and warns that the multi-year sale cycle could be short-lived.

Ultimately, however, this doesn’t dampen his overall take on the stock:

“Despite our slightly dour view of iPhone units, we continue to believe the combination of increased iPhone prices and growing services revenue will drive upside to consensus gross margin estimates in FY18. This should drive upside to consensus EPS expectations, even if iPhone units are only in line.”

This five-star analyst reiterated his buy rating with a $192 price target (12% upside).

Strong Buy Stocks: Alexion Pharma (ALXN)

Source: Alexion Pharmaceuticals

Alexion Pharmaceuticals, Inc. (NASDAQ:ALXN) is a U.S. pharma company best known for its development of Soliris, a drug used to treat rare blood disorders. ALXN has the thumbs up from top Cowen & Co analyst Eric Schmidt. Bear in mind this analyst is generating one of the highest average returns of over 40% per rating.

Schmidt is confident that Alexion can explode 44% from just $125 to $180. He calls Alexion a “top large-cap pick” with a $1 billion opportunity in autoimmune disorder generalized myasthenia gravis (gMG). Soliris has now been approved in Europe, the U.S. and, on Jan. 3, Japan. Schmidt is now expecting a “robust” launch for one of the world’s most expensive drugs, at $700,000 per patient per year.

In total, Alexion has scored 11 buy ratings and only one hold rating from analysts in the past three months. These analysts are predicting that Alexion will rise 31% to reach $164.

Strong Buy Stocks: Chevron (CVX)

California-based oil giant Chevron Corporation (NYSE:CVX) is an interesting pick. Why? Well initially it only has a “Moderate Buy” analyst consensus rating. But if we look at only top analyst ratings the consensus shifts to Strong Buy.

In fact, top analysts have 100% support for CVX with only buy ratings in the last three months. These best-performing analysts see the stock rising over 9% to hit $140.

Cowen & Co’s Sam Margolin gets it right 87% of the time. He also has an average return of over 20% per rating. In respect of Chevron, Margolin is the Street’s most bullish analyst. On Dec. 20, Margolin ramped up his price target from just $122 all the way to $160 (24.5% upside). Chevron is looking appealing right now for three key reasons: 1) accelerating free cash flow; 2) increasing Permian asset value due to operational execution; 3) its dividend yield of 3.36%.

“We see progress along those fronts in 2018 accelerating, and it should be relatively easy for investors to keep track of the data outcomes that can drive the stock directionally. With metrics trending in the right direction, the ultimate valuation of the stock, in our view, can be underpinned by 30-year averages in key cash-based metrics” comments Margolin.

Strong Buy Stocks: Centene Corp (CNC)

Centene Corp (NYSE:CNC)

Source: Shutterstock

‘Strong Buy’ healthcare stock Centene Corporation (NYSE:CNC) is winning analyst acclaim after publishing strong 2018 guidance. The company is a multi-line healthcare enterprise that provides services to government healthcare programs. Following an upbeat investor day, top Oppenheimer analyst Michael Wiederhorn boosted his price target from $111 to $122 (17% upside).

He says the day “highlighted the strong growth opportunities within a $1.9T pipeline ($255B targeted), largely consisting of new Medicaid populations, along with the promising opportunities within the Medicare Advantage and Exchange markets.” And this is a long-term investing prospect says Wiederhorn. He sees Centene “continuing to boast strong revenue and earnings growth prospects for years to come.”

The overall Street picture on Centene is also very promising. In the past three months, CNC has received seven buy ratings and one hold rating. This includes Wells Fargo’s Peter Costa adding Centene to Wells Fargo’s Priority Stock List on Dec. 19 as he believes shares look undervalued right now.

So, too, does the Street: the stock’s $119 average analyst price target suggests 15% upside potential.

Strong Buy Stocks: FedEx (FDX)

FDXmsn

Five-star Argus Research analyst John Eade is betting on courier leader FedEx Corporation (NYSE:FDX) for 2018. On Dec. 26, he bumped up his price target to $290 from $245 previously. Given the stock is currently trading at $262, this indicates upside potential of over 10%. The move came following an impressive Q2 earnings beat and raised FY18 outlook.

He says the company should execute with future efficiencies and margin improvement thanks to the “well-respected management’s” continued cash injections. Specifically, management is showing increased focus on expense control in the Ground segment. On top of this Argus believes that FY18 will reap the benefits of falling fuel costs and higher shipping demand.

Following a flurry of analyst “buy” ratings and price target increases, 14 out of 15 top analysts are bullish on the stock. The average price target from these analysts: $278.

Strong Buy Stocks: Owens Corning (OC)

Source: Shuttertstock

Owens Corning Inc (NYSE:OC) is a key analyst pick for 2018. This is a global company that develops and produces insulation, roofing and fiberglass composites. Top RBC Capital analyst Robert Wetenhall is the most bullish analyst on OC right now. He says the stock will go to $112 (19% upside) because of recent M&A activity and strong execution.

On Dec. 4, Wetenhall underscored his confidence in the stock when he upgraded Owens Corning from outperform to “top pick.” He explained: “Our expectations for double-digit EBITDA growth, robust free cash flow generation and multiple expansion inform our Top Pick rating and give us confidence that the stock will rise even after strong year-to-date performance (+70%).”

Overall, Owens Corning has a “strong buy” top analyst consensus with a $94 average price target. This breaks down into six buy ratings and one hold rating in the last three months.

Strong Buy Stocks: Alibaba (BABA)

Risks Abound for Alibaba Group Holding Ltd (BABA) Stock Price

Source: Shutterstock

Chinese e-commerce leader Alibaba Group Holding Ltd (NASDAQ:BABA) is currently trading near the high end of its one-year range. But analysts are optimistic the stock has even further room to grow in 2018.

Indeed, Alibaba has received only bullish buy ratings from analysts for over half a year now. The average price target from the last three months of ratings alone comes out at $213- 14% above the current share price.

Five-star Stifel Nicolaus analyst Scott Devitt recommends buying BABA for exposure to China’s rapidly growing middle class. He points out that the Chinese eCommerce market can exceed $1 trillion worth of sales by 2019. And BABA looks set to capitalize on this with “well-managed and well-positioned leaders”.

Meanwhile, BABA also has the technical support from China’s broad and efficient telecommunications infrastructure. This continues to increase BABA’s ability to grow its online customer base. And at the same time, BABA’s online/ offline new retail strategy means it has all shopping preferences covered.

Strong Buy Stocks: Broadcom (AVGO)

Semiconductor behemoth Broadcom Limited (NASDAQ:AVGO) is consistently one of the Street’s top stocks. And it looks like the situation is no different for 2018. In the last three months, AVGO has received an incredible 26 consecutive buy ratings.

No hold ratings or sell ratings here. These analysts see the stock trading up by over 18% from the current share price. Top Oppenheimer analyst Rick Schafer has just called AVGO his best stock idea for December-January. He says, “We believe AVGO has one of the most strategically and financially attractive business models in semiconductors.”

Schafer lists four key reasons for his positive outlook on AVGO. The company has 1) a sustained competitive advantage in the growing high-end filter market; 2) a highly diversified, differentiated and “sticky” non-mobile business offering; 3) and efficiently managed manufacturing advantage; 4) substantial EPS and free cash flow accretion heading its way from the Broadcom and Brocade acquisitions.

So far Schafer seems to know what he is talking about when it comes to AVGO. Across his 37 ratings on the stock, he boasts an impressive 93% success rate and 41% average return. Even better, the company is also an attractive dividend stock and recently paid a dividend of $1.75, up from $1.02 the previous quarter.

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Source: Investors Place

Betting Big On This Chipmaker with More Upside Than Apple

It’s only the first week of the New Year, and there’s already plenty going on in the financial markets. While there hasn’t been much in the way of volatility, that’s only because stocks are mostly going up. In that sense, 2018 is acting much like 2017.

On the other hand, one major stock that isn’t going up is Intel (NASDAQ: INTC). In fact, it’s quite the opposite situation. As of this writing, INTC was down 5% to kick off 2018.

Here’s the deal…

News broke this week of a potential design flaw in Intel processors which could pose a security risk. Moreover, the fix (patch) for the flaw allegedly slows down the performance of the chips by as much as 30%. This flaw supposedly only impacts Intel chips and not its competitors.

You can see why this would be very bad news for the company. Not only will it likely push consumers to other chip producers, but it also will open up lawsuits or expensive fixes/replacements for Intel. It’s clearly the reason why INTC stock is down and competitors like Advanced Micro Devices (NASDAQ: AMD) and NVIDIA (NASDAQ: NVDA) are up.

Intel hasn’t denied the existence of the flaw, although the company says it will impact multiple types of chips across various devices and is not just an Intel-specific issue. Regardless, with INTC controlling 80% of the microprocessor market, it will certainly be hit the hardest.

This scenario is also playing out in the options market, where AMD is seeing quite a bit of bullish options activity. The day the news hit the wire, about 80% of the money going into AMD options was of the bullish variety. (About 125,000 more options contracts traded that day than what’s average in the stock.)

One trade which caught my eye was a purchase of over 1,500 April 12 calls with AMD trading around $11.75. The buyer paid $1.20, which means AMD needs to get to $13.20 by April expiration for the trade to break even.

The call buyer is spending over $175,000 on these contracts, so there clearly is some belief that AMD is going to keep going up. Over the last 52 weeks, AMD has been as high as $15.65, so it’s definitely not out of the realm of possibility that the stock runs quite a bit higher.

It will be interesting to see if the exuberance around AMD’s prospects diminishes once the news sinks in a bit more. As you can see from the chart, the stock already came back down to earth somewhat the same day it spiked higher.

If you believe AMD is ripe for a move higher, but you don’t want to drop $1.20 on 3 month calls, you could buy a call spread. That’s when you purchase a lower strike call, such as the 12, and sell a higher call, like the 14, to save money on the position.

An April 12-14 call spread like I just described only costs about $0.60, or half the cost of the straight call purchase. Your upside is limited to $1.40 because of the short 14 strike and the $0.60 cost of the trade. But, you are spending a whole lot less on the position. Plus, spending $0.60 for the chance to make $1.40 is not a bad payout ratio at all.

This simple strategy can easily add thousands of dollars of income to your savings over the next 6 months, and I want to show you step-by-step how to do it in your portfolio.

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Source: Investors Alley

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