Nasdaq and Fortune’s Must Buy Stocks to keep your Eye on in 2018- Amazon, Alibaba and others
The biggest stocks that are strongly considered to have continuously grown between 2017 and 2018 are ones in the IT sector. Stocks in Microsoft, Amazon, Alphabet, and Facebook are perhaps the most reliable and you can’t go wrong in purchasing them.
Customers Bancorp, a regional bank in America, is planning to launch a mobile banking system for students. Meanwhile, Delphi Technologies and APTIV’s split is expected to gain new ground, and Berkshire Hathaway’s holding company, Store Capital Corporation, as well as China’s strongest conglomerate, Alibaba Group Holdings, are also attracting attention.
Here are 11 stocks that are gaining attention in 2018 from fortune magazine, the US news and on NASDAQ etc.
Facebook (FB) – Once again the strongest “must buy stock” this year with expected growth to surpass that of Google
Facebook has again garnered the “must buy stock” nickname, being the “fastest growing IT company” alongside Alphabet. The number of Facebook users has exceeded 2 billion worldwide – a factor that will continue to raise its stock prices this year as well. Facebook’s expected growth rate in 2018 is 33%, which is 14 points higher than its rival company Google.
However, there are several points that should be considered. For example, The Independent reported that Facebook is “running out of space in <its> newsfeed” to display advertisements, which is one of Facebook’s largest sources of income.
Although Facebook is also creating new measures to introduce advertisements through Messenger, it is not clear to what extent this can be expanded.
That being said, it is hard to imagine that new advertising space will be exhausted in 2018 to the point where Facebook’s advertising revenue will decline considerably. In any event, Facebook shares remain a firm must buy this year as well.
Amazon (AMZN) – Moving from retail to cloud businesses and the infinite potential for growth
In October of last year, Amazon’s stock finally broke the $1,000 mark with strong results in the third quarter settlement of accounts. In mid-December the price rose by more than $1190, with a record high increase of more than 58% within the year.
Analyst Douglas Anmuth of JP Morgan revised the target stock price to $1375, which was much higher than the predictions of Wall Street. CNBC has reported that “the growth of Amazon has just begun and we can expect further growth in the future” citing the fact that the percentage of online shopping in the US retail market is still only 12%.
Amazon’s driving force is not only in the e-commerce industry. The Cloud Service Business AWS’s third quarter revenue was $458000 higher than the average estimate of $80 million given by analysts. Amazon has achieved a remarkable growth rate of 42% and with the demand for cloud services having increased in recent years, the possibility for growth is infinite.
Additionally, Amazon has ventured into the food retail industry with its acquisition of Whole Foods Market, as well as having numerous other expectations in areas such as drone delivery and the expansion of its advertising industry.
Alphabet (GOOGLE) – Stock growth rates that are better than Apple’s with sustained growth expected in diversified businesses
Although its mid-December peak last year showed a slight drop to $1053, Alphabet’s stocks have maintained a value above the $1,000 mark since October.
A 5-year comparison of stock prices against its rival company Apple shows that Apple’s stock has grown by a factor of 2.3, while Alphabet’s has grown by a factor of 2.8. When compared to Amazon and Facebook, there are not many factors that suggest a sudden surge in stock value. However, Alphabet’s sustained growth rate is higher than Apple’s.
Alphabets third quarter sales finished at $27.77 billion (up 24% from the previous year), with net income at $6630 million (a 33% increase) and a dividend of $9.75. Advertising revenue from the affiliated companies Google and YouTube will result in net profits being pushed to record highs. Google’s revenue, which accounts for 90% of the company’s total sales, was $27.47 billion (up 19%), showing a strong overall trend.
Like Amazon, Alphabet diversifies also its business each year. Alphabet is currently working in a wide range of fields including enterprise cloud services, data management, software development and machine learning technology development.
CNN’s forecast data shows that 34 out of 43 analysts have specified “buying” Alphabet stocks with 6 recommending “holding” and zero analysts seeing it as a stock to “sell”.
Nvidia’s (NVDA) AI chip is conquering the market. Will this be their crucial year?
Nvidia has gained a lot of attention for the development of its AI chip. Nvidia is a semiconductor manufacturer founded in California in 1993. The company has been manufacturing products for the CPU gaming industry for a number of years but has recently expanded into the AI computing field. Its stock price has increased 16 times in the past five years and doubled in the past year.
Contrary to the strong sales that significantly exceeded market expectations, stock prices have declined slightly since November of last year. There is an opinion that the ground it is standing on is too loose to label its stock as “buy”. However, seeing that the demand for AI chips has seen explosive growth in recent years, the possibility of Nvidia stock prices rising from their current value of $193 dollars is also highly conceivable. Whether or not Nvidia will be able overcome and achieve dominion in the AI chip realm in 2018 will have a big influence on its future stock prices.
Microsoft (MSFT) – A new frontier for block chain technology has been found
Microsoft’s stocks have consistently hovered around $85 since last December and are not as flashy as Amazon and Facebook, with prices having increased by 137% in the past year and 326% in the past 5 years.
However, like its rival companies, Microsoft is expected to see growth through diversified management with things such as the development of original internet related software, video game consoles, digital music equipment and the provision of block chain technology through Microsoft Azure providing plenty of ammunition to highly increase its stock prices.
Customers Bancorp (CUBI) – Stock prices expected to rise with the establishment of a mobile bank for students
Customers Bancorp is a regional bank in the United States based in Pennsylvania. Although it is a small bank with a market capitalization of 800 million dollars, it has announced the establishment of a mobile bank in 2015 intended for consumers and students who do not own bank accounts. It is scheduled to start in mid-2018 and shareholders are paid a dividend of $3.57 per share.
The current share price is about $26, but it is expected to rise to $37-38 dollars by the end of the year.
Store Capital Corporation (STOR)- An internally managed net-lease REIT company invested in by Berkshire Hathaway
Berkshire Hathaway’s holding company, Store Capital Corporation, is an internally managed net- lease REIT (real estate investment trust) company established in Arizona in 2011. Berkshire Hathaway acquired a 9% stake in the corporation in June of last year.
It mainly deals with the investment in, management of, and acquisition of restaurants,
movie theaters and child education centers. Their senior leadership team is staffed with veterans with more than 30 years of experience in the single tenant real estate industry.
The stock price crashed around May 20th last year from $25 dollars to less than $20, but it has risen since then and is currently at $26 (data from Reuters).
Alibaba Group Holding (BABA)- A Stock price that is rising with China’s enthusiasm for online shopping
Alibaba`s stock price has tripled in the last year. It is the largest e-commerce conglomerate in China with a market capitalization of $441.9 billion. The annual sales growth rate over the past five years is 50%. The sales growth rate in 2017 was 53%, which greatly exceeded the jump that Amazon showed in 2010 (40% increase).
The current stock price has settled around $172, but in November it nearly hit the $200 mark. The Chinese consumer goods market surpassed $517.2 billion last October (a 10% annual growth increase), 18% of which was from online purchases (from China Internet Watch). Online shopping is expected to continue to grow in the future with Alibaba’s share price rising even higher.
According to the investor market analytics site Smarter Analyst, the US investor Steven Cohen, also known as the “infamous billionaire”, has said that he truly believes in the investment fates of Alibaba and Amazon. Mr. Cohen’s investment company in Connecticut is Point72 Asset Management. Although it is a “family office” it has a total asset value of $11 billion dollars under management. His company has made favorable achievements on par with any hedge fund.
Mr. Cohen has increased his holdings in Alibaba to 37% in the third quarter through his own company and currently holds more than 100,000 shares (equivalent to $180 million).
Ryan Air Holdings (RYAAY)- One of the largest low fare airlines in Europe that remains triumphant despite 20,000 flight cancellations
Ryan Air Holdings is a low fare airline company headquartered in Ireland that boasts the number one spot for serving international passengers in Europe. In 2016, RYAAY served 117 million passengers (a 15% increase from the previous year) (Data from CAPA). According to the company’s annual report, its expected revenue in 2017 was 6.44 billion Euros (a 2% increase), the post-tax adjusted profit was 1.13 billion Euros (a 6% increase) and the adjusted net income per share was 105.30 Euros ( a 14% increase).
Last year, due to a lack of pilots, it became impossible to operate the company as scheduled, leaving RYAAY no choice but to cancel about 20,000 flights. As a consequence, the stock price which had risen to around 19 Euros in August, fell to 15 Euros (data from the London Stock Exchange).
The effect of these ups and downs however seems to have been less impactful than expected, as predictions that the stock will continue to grow strongly in 2018 persist.
The Travelers Companies (TRV)- Expected to recover after a sharp decline in earnings from damage caused by successive hurricanes
The Travelers Companies is the largest insurance company in the United States with a market capitalization of $32.1 billion. TRV provides real estate, automotive, accidental and personal insurance.
In 2017, Hurricane Harvey caused damages of an estimated $180 billion dollars while Hurricane Irma surpassed it further with estimated damages of $200 billion. The hurricanes struck the USA in August and September respectively, resulting in large amounts of damage and heavy losses, especially in September.
According to the financial reports for the second quarter, the net income of TRV was $230 million, reducing earnings per share to $1.05. This marked a net decrease of $580 million dollars and a decrease of $1.35 dollars per share when compared to the same period of the previous year and shows the magnitude of the blow caused by two hurricanes. The company responded by repurchasing its own shares. Shortly after the hurricane, the stock price crashed from $129 dollars to $119 dollars but it has now risen to 135 dollars (data from Bloomberg).
Barring the strike of another natural disaster this year, further growth is expected.
Delphi Technologies and APTIV- Will the separation of these companies trigger a price increase?
Delphi Automotive, which is an umbrella organization of General Motors, is currently separating into two companies: Delphi Technologies, which develops next-generation automobile related products, and APTIV, which develops mobile solutions.
This bold company reorganization has resulted in the opinion that their stock prices will rise in 2018. On the first day of trading in December of last year, Delphi Technologies (DLPH) had an opening price of $51.54 and closed at $57.25. APTIV (APTV) had an opening price of $88.89 and closed at $88.77. Currently, Delphi Technologies stock has risen to $52.47 and APTIV’s prices have risen to $85.