Trading Blog | 5 min read
Top Stock Picks for 2019 – What Stocks to Buy?
This article includes an exploration of what is on the stock market including upcoming IPO’s, industries, growth and dividend stocks along with other information which is handy to know about the performance of the market.
2019 is shaping up to be another great year for trading and investing in stocks. With the seemingly endless list of stocks and shares available to buy on exchanges and brokers, it can often be confusing which stocks to buy. In this article, we have laid out the best stocks and IPOs to look into and are likely to see positive price movements.
This year brings opportunities with the IPO calendar filled with unicorns which is the Wall Street lingo for fast growing start up companies valued over $1 billion. Below we will list some new upcoming IPO’s as well recently listed.
This company had talks to go public later this year with Amazon veteran to serve as the company’s chief financial officer; however news through the most recent buzz indicated that the company may not be going public in 2019 after all. Nevertheless Airbnbcontinues to grow beyond basement apartments, spare bedrooms and second home rentals with a valuation of $31billion. The firm is a online marketplace which allows people to rent out spaces on a short term basis. As a private corporation last year the company raised $4.4 billion. There are strong ambitions to make Airbnb a global travel community which is built on experiences and content so if interested keep an eye out on the plans behind when and if the IPO will still be in process.
Founded in 2010 WeWork is an American company that provides shared workspaces for start up firms, large and small businesses, entrepreneurs and freelancers. After a cash investment from the Japanese SoftBank the company was valued at $47billion. We work is now in view of an IPO later this year a lot sooner than investors expected having filed paperwork with the SEC on 29th April. With an exceptional growth increase the WeWork Company now operates three branches: The WeWork shared workplace provider, WeLive- a flexible apartment and rental provider and a WeGrow- an entrepreneurial school. There has been some speculation on the exact IPO date and share price due to the fact that SoftBank reduced the initial funding proposal from $12billion to $2billion but despite this We Works CEO has made clear that reduced funds will not affect the company’s IPO. The company has said to have turned over the $2billion during the course of one year. This IPO may provide an interesting opportunity for traders regardless of the concept of the company not being a new idea. WeWork use of bars, events and fashionable interior seems to appeal to a larger audience than the more traditional providers such as the likes of Regus- a business which has been around for decades.
Palantir is a data mining company co-founded by Peter Theil who is one of the brains behind the PayPal payment processing. Reports indicate an IPO in the second half of 2019. It was last valued at £20billion under fundraising around 2015. The company is known for being one of the biggest competitors in Big Data and has earned its reputation from being highly secretive. In 2017 a Guardian headline suggested that Palantir holds as much real world power as Google, while a more recent Bloomberg article revealed that Palantir ‘knows everything about you’. Although the company may face challenges with going public particularly with concerns of transparency on how data is used, the 14 year old company is predicted to turn a profit this year- a rare achievement for many tech IPOs.
The world-renowned jeans maker is expected to raise between $600 million and $800 million although this has not yet been confirmed. The business was listed for 13 years before being taken private for $1.4 billion in 1984 after experiencing a decline. Levi now wants to capitalise after working hard to improve its performance dramatically with debt reduced to over half in the period of a couple years. Revenue towards the ending of November 2018 had grown by 14%to $5.6 billion with a net income increasing to $283.1 million. Retail particularly in fashion is one of the most challenging industries at the moment, mostly due to online competition which in turn is starting to show signs of saturation. Levi has 2,900 stores but primarily sells through 50,000 partners across the world with 105 of its business considered to be online. Nevertheless Levi believes there’s room for expansion in the likes of Asia, proving it with ample chances to grow.
Founded in 2014, Livongo is a company in the health care industry that sells smart devices and software which is designed to help manage behavioural health, diabetes, hypertension and other chronic diseases. The corporation has integrated its platform with Apple, Fitbit and Samsung Smart watches last month. Investor interest in Livongo Health inc is considered to be hot, prompting the healthcare technology company to boost its price targets by 13% ahead of the offering taking place Thursday on the NASDAQ. Livongo plans to raise up to $320 million in an offering which could value at about $2.3 billion, that’s more than double of the company’s valuation of $850 million in April 2018. The company plans to sell $10.7 million shares to public investors for between $24-$26 per share and has also set aside $1.3 million to sell to underwriters.
Recently Listed IPO’s
Uber Technologies inc was one of the highly anticipated offerings of 2019 with a valuation over $80 billion. Uber went public in May at a price of $45 per share on the New York Stock Exchange (NYSE) – a price well short and lower than the anticipated $100 billion valuation. At the start of the year Uber and Lyft were in competition in launching their first IPO where Lyft won. Although the IPO was oversubscribed, Uber settled for a lower price to avoid a repeat of Lyft’s IPO experience late in March where prices were strong then later fell in trade. Uber placed orders for a lower price which fell in the lower end of the $44-$50 per share price range.
However despite Uber making the efforts to moderate its IPO expectations, some still felt the stock was overpriced. Orders were also put in at a lower price to accommodate mutual fund. Paypal holdings agreed to invest $500 million at the IPO price in a private placement where associations of the SoftBank vision Fund, Toyota Motor Corp and Denso Corp would together invest $1 billion for Ubers autonomous driving efforts adding more to Ubers total intake.
Founded in El Segundo California 2009 this company took the Wall Street by storm when it went public in May making it one of the exciting IPO’s of 2019. Beyond Meat is a food company which makes plant-based meat where it’s premier product is the Beyond Meat which sells at Whole Foods and TGI Fridays to name a couple. Shares rocketed 163% higher on the first day of trading where the company managed to raise $240 miliion at $25 per share resulting in a $1.5 billion valuation.
With a push for legalisation in recent years, cannabis is one of the fastest growing industries in the US with 33 states currently permitted to use medical cannabis and recreational use being legal in 10 states including Washington DC for adult use. This Cannabis boom is expected to affect more than just medical patients. By 2020 more people are predicted to be working in the legal cannabis industry than the manufactory industry where revenue is expected to grow from $7.2 billion in 2016 to over 24 Billion by 2020. Investment activity boomed last year increasing to 13.8 billion in total value from $3.6 billion the year before. As the industry is still moderately new and volatile, it allows plenty of room for companies with inventive growing and plant breeding techniques to shape the market. If the public continues to favour legalisation then the legal cannabis industry will most certainly continue to grow and thrive.
The global artificial intelligence market size is expected to reach $170 million by 2025 from $4065 million in 2016. The AI market is segmented by technology, geography and industry vertical. The ranges of technologies are broken up into machine learning, natural language processing, image processing and speech recognition. From driverless cars to virtual doctors, AI is transforming the way work, live, travel and how we do business in the 21st century. In 2016 the machine learning category dominated the market in terms of revenue and is expected to maintain its trend in the upcoming years looking to increase in demand for artificial intelligence industry solutions. Based on industry vertical the market for artificial intelligence is categorised into media and advertising, telecom and IT, healthcare, retail, automotive and transportation whereby the IT and telecom sector is expected to dominate the global artificial intelligence throughout the forecast period. Geographically the market is analysed across North America, Asia-pacific and Europe. During 2017 the North America region contributed to the highest revenue share in the artificial intelligence market and is predicted to secure the leading position with presence of key companies and large investment in the AI market. Key corporations profiled include Google Inc, Apple, Microsoft Corporation, IPsoft and that’s just to name a few. AI have a Rapid growing presence in today’s world with applications ranging from heavy industry to education, it has become prevalent that this technology has the potential to revolutionise how the everyday world operates.
To name a few some of the most popular use of AI today includes Apples personalised assistant Siri which uses machine-learning technology in becoming smarter and better at predicting and understanding our natural language, questions and requests. Alexa who was introduced by Amazon took the world by storm with its ability to decipher speech from anywhere in a room helping us to search the web for information, shop, schedule appointments, set alarms as well as many other things. It also helps power our smart homes and has been useful for those with limited mobility. Tesla which could possibly be the best car ever made has received so many rewards and recognition due to its predictive capabilities, self-driving features and technological advances. As time goes on these cars are only getting smarter thanks to their over the air updates. Netflixprovides highly accurate predictive technology based on customers choices and response to films. Netflix analyses billions of records allowing it to make recommendations to suit your film preferences and as the dataset grows, this tech will become smarter and adaptive.
While AI can be applied to most sectors once the technology advances enough there are many fields that will soon be reaping the benefits of AI if they already aren’t! According to Forbes industries that will soon be revolutionised by AI are the following:
- Cyber security
- DevOps and Cloud Hosting
- Business intelligence
- Mental Health diagnosis and treatment
- Supply Chain Management
2018 Best Performing Stocks
When it comes to trading & investing, history typically repeats itself. It is important to look back at previous trends to give you a better understanding and picture of what is likely to happen. Here is a list of last years best forming stocks:
This company made a gain of almost 120 per cent where at the start of the year investors could have more than doubled their money in the space of 10months. The company had later delivered successful earnings in November which had reversed a recent downtrend.
Advanced Micro Devices (AMD)
At the start of last year opening share prices for Semiconductor Company Advanced Micro Devices were £10.42. Since then AMD stock have doubled where during September the stock actually managed to peak at $30 a share before it fell back down in October. However once announcements was made that the company’s chips were being used by Amazons cloud computing diversion the stock increased.
TripAdvisor, Inc (TRIP)
During 2018 the stock rocketed up the charts. Although it remains inadvisable for investors or beginners to make stock picks based on this sites advice, investing in this company would have been a very wise move at the start of last year. Those who did would of ended up doubling every dollar they invested by Early November.
Netflix, Inc (NFLX)
During 2018 Netflix experienced a 60 percent gain in just 10 months and has shares well over $300 each as the company continues to stream money into its shareholders accounts.
HCA Healthcare (HCA)
HCA Healthcare is a company which operates small care hospitals and surgical services providing for patients at its 179 hospitals and 120 freestanding surgical centres. Its stock performance and earning last year allowed the company to add 60percent to its market value and as admissions arise this should continue to grow.
Best Stock picks for beginner investors
Finding the best stock to watch and buy comes from having basic understanding on stocks itself and knowing what a potential market winner looks like. Take a read on our beginners guide to stock trading to gain some enlightenment on exactly what stock trading is and how to invest in the market.
Doing your research is a huge part of investing in stocks, it is important to look for traits like increased earnings and sales growth, strong return on equity and a fast growing and industry leading product or service. When getting started sticking with company’s which you know can be a reasonable approach to take especially if you’re interested in a long term investment. Here is a list of a few top quality companies which everyone is familiar with worth investing into.
- Alphabet (Google)
Best Dividend Stocks
A dividend stock allows an investor to gain regular passive income simply from owning shares in a company. Historically stocks that pay dividends have outperformed those that don’t. Businesses who are generating a strong cash flow and who have strong financials are most likely to produce high returns which attracts investors. Some of the best companies who pay dividends includes:
Altria Group (MO)
The giant tobacco Altria Group is able to provide major capital back to its shareholdersthrough dividend and buy backs. Altria which owns Philip Morris USA (who also owns other brands) pays a huge 5.7% dividend due to strong margins, customer loyalty and low reinvestment requirements. Pursuing growth Altria Group invested $1.8 billion in a Canadian Cannabis Company known as the Cronos Group. Altria’s steadiness and ability to promptly take new growth opportunities makes it a good investment for dividend stock.
With competitors such as Walmart and Amazon, Target offers something for their investors which none of its competition does and that a yield of 3.6%. Targets payout ratio sits on about 41% revealing that without a doubt the company can sustain its dividend payments while also retaining enough to reinvest in growth as well. Despite Amazon’s expansion, sales continue to grow and with a track record of increasing quarterly payments for 50 consecutive years why not invest in this stock which proves to be steady and reliable.
The company continues to undertake its massive international expansion, increasing its growth phrases and in turn rapidly boosting its dividend payouts. With a free cash flow of over $3.34 Billion and 8 years of uninterrupted payout growth the company attracts a lot of investors looking for a company with dividend growth.
Aqua America Inc
Trading on the New York stock exchange this water company serves around 3 million customers in Ohio, New Jersey, Texas, Pennsylvania, Virginia, North Carolina and Indiana. With a quarterly dividend rate of 0.219 per share, Aqua America has an annual yield of 2.3%. Although the yield itself may not be exciting, investors who are risk averse should consider this company due to longevity and growth in its payout. Aqua America has been paying out quarterly cash dividends for more than 73 years and in the past 27 years the company has consecutively raised its payout.
Johnson & Johnson
Aside from being a company to hold an AAA credit rating this company has one of the safest dividend payouts in the world. Johnson & Johnson relies on its three businesses to bring something beneficial to the table which each individual segment lacks. With its business sectors broken down into healthcare products, medical device units and the pharmaceutical segment the company has been able to raise its quarterly payout for 57 consecutive years and has grown its adjusted earnings over the course of 35 years straight. The J&J 2.9% yield attracts investors with their continuous uninterrupted payouts.
One of the easiest ways of securing a safe and passive payout is through purchasing companies that deal with a basic need. Historically utilities are viewed as a defensive investment that is turned to when the stock market is struggling or when the economy is wavering as they are slow growing. Nevertheless NextEra isn’t like your average utility stock as the company proactively develops the way utilities operate and is on the leading edge of a renewable energy shift.
Best Growth Stocks
Growth stocks are beneficial of outsized gains compared to the averages. When investing in the upside of stock investopedia has provided us with some main things to look out for. These include improving fundamentals, good entry points and a history of bullish trading patterns in the shares. The top five stocks viewed as long term potentials are as followed:
Chipotole Mexican Grill Inc
Chipotole has a very strong fundamental history which means that it supports a long term investment approach. The 2019 year over year revenue growth rate increased by +13.9% and the 2019 year over year diluted earnings growth rate was at an increase by +59.6%. Considering the technical areas also referred to as good entry points a year to date outperformance vs the market indicates +49.12% vs SPDR S&P 500 ETF with recent bullish trading signals.
Facebook Inc, (FB)
- The company has a year to date outperformance vs Market: +28.34% vs SPY
- Year to date outperformance vs technology sector: +19.8% vs Technology Select Sector SPDR fund
- Recent Bullish trading signals
Looking into the fundamental picture of the company it does support a long term investment with the 2019 revenue growth rate increasing by +26% however the 2019 diluted EPS growth rate -50% which includes $3billion legal expenses related to the FTC.
Illumina is a leading genome and DNA sequencing firm with a year to date outperformance vs market of +0.69% vs SPY and year to date outperformance vs healthcare sector of +10.63 vs health care select sector. In addition to this Illumina’s growth rate has been impressive with a 2019 revenue growth rate of +8% and a 2019 GAAP net income growth rate of +11%
Paypal Holdings Inc
The leading e-commerce payment company which is also known for its payments through Venmo has a year to date outperformance of +19.96% vs SPY. The year to date outperformance vs technology sector equates to+11.10% vs XLK. Growing rates have been steady with a +12% revenue growth rate and +34% for GAAP EPS growth rate.
This payment firm also known for being one of the largest globally has been a growth predator over the years. The technical’s’ of the company shows that the outperformance is +13.61% vs market (SPY) and the outperformance vs the financial sector is +17.22% vs Financial Select sector SPDR fund. The company’s stock has been up steadily since January and visa remains in growth mode with a 2019 net revenue growth rate of +8% net income per share growth rate of +17%.
These 5 companies discussed represent a potential buying opportunity for investors looking to take a long-term approach. Considering the strong historical revenue and earnings growth, along with the bullish usual trading signals which they all share; these stocks would be worth a place in the growth orientated portfolio and a good buy.
To conclude, when getting involved in any investments within the stock market the most important thing to do is your research! Taking the initiative to do your background researches on companies allows you to track the organisations performances where you are then able to discover information which you were unaware of. Research allows you to make more of an informed decision on whether the investment is for you or not. Looking for traits such as a consistent increase in revenue growth and earnings in a company can help give you a gage of progression, although it is important to note that there is always risks in investments and some things can happen within a organisation unexpectedly and out of their control. For guidance or any information related to the topics discussed in the article or trading and investing in the stock market, get in touch with one of our trading mentors today for a free consultation.
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