Category Archives: Top Stocks

Top 5 Penny Stocks To Invest In Right Now

Despite what some experts would have you believe, the alternative energyrevolution is here and shows no signs of stopping.

alternative energymoneymorning.com/wp-content/blogs.dir/1/files/2018/07/solar-and-wind-75×50.jpg 75w, moneymorning.com/wp-content/blogs.dir/1/files/2018/07/solar-and-wind.jpg 550w” sizes=”(max-width: 300px) 100vw, 300px” title=”alternative energy” style=”font-size: 18.0018px; box-sizing: border-box; margin: 0px 0px 24px 24px; padding: 0px; border: 0px; vertical-align: middle; max-width: 100%; height: auto; float: right; text-align: right;” />That’s easy to miss, given the political headlines in the United States. U.S. President Donald Trump notably pulled out of the Paris Climate Agreement last year, and this year he announced tariffs on imported solar cells.

Naturally, some of the best alternative energy stocks have pulled back from their highs as investors fear the trend toward these energy sources is slowing down.

That fear, however, is overblown. In fact, some of these alternative energy stocksare now drastically undervalued.

We’ve got one solar energy stock today that’s due for a 420% pop based on its recent performance alone. That’s before you account for the growth on the way.

The fact is, tariffs or no, developers around the world want this technology. It’s clean and efficient, and by now, it’s often the cheapest option. Based on bids solicited last year by Xcel Energy in Colorado, for example, building and maintaining brand new solar and wind plants was cheaper than just keeping up operations for 74% of the country’s existing coal plants.

The U.S. solar tariffs, which wind down by 5% every year, may offset the lower price of solar somewhat in this country, but they won’t be enough to stem the tide of solar, wind, and several other renewable sources.

Many naysayers seem to forget the world is a lot bigger than the United States. Most developed countries are shifting their energy grids without any of the restrictions the United States has put in place.

Top 5 Penny Stocks To Invest In Right Now: Nutrien Ltd.(NTR)

Fertilizer stocks have had a rough go in recent years. So rough, in fact, that even the faintest whiff of a rebound in the second half of 2018 is causing shares of industry leaders to rally. While it’s still too early to say selling prices are moving in the right direction for good, one of the newest companies is also one of the best positioned to capitalize on an improving market.

Nutrien, which was formed from the merger of Agrium and Potash Corporation, is a $34 billion goliath selling all three major agricultural nutrients. The company might be the most important global potash miner, as well as a major player in nitrogen. However, the business is also keen to grow its distribution network and diversify earnings away from nutrient selling prices. So, investors might be surprised to learn that the retail segment generated 35% of adjusted EBITDA last year — more than potash or nitrogen. 

That’s only one source of strength for the business. Nutrien is in the process of wringing out $500 million in annual cost savings from the merger, having achieved $150 million in the first quarter of 2018. Meanwhile, it’s also selling its equity stake in Chilean lithium miner Sociedad Quimica y Minera de Chile, brought to the merged company by Potash Corporation. The sale is expected to generate at least $4 billion in net proceeds, which could halve the company’s total long-term debt. That would bring its debt-to-equity ratio well below peers’ and closer to the marks set by creditors. Combined with cost savings and the potential for higher selling prices, this would make the fertilizer leader well positioned to capitalize on a potential market rebound. Throw in a healthy 2.9% dividend yield, and investors may want to give this one a closer look. 

Top 10 Energy Stocks To Own For 2019

In any long-term diversified portfolio, international stocks not only have a place, they should be represented by as much as 10% to 15% of your investment.

The reason is not merely diversification, but because international stocks do not always correlate directly to the performance of the U.S. market. You want to have stocks that aren’t correlated to smooth out volatility.

Investors can be afraid of international stocks, as if they aren’t as safe from a political, reporting or regulatory perspective as they are here in the United States. Political risk can be very real with international stocks, and significant cultural differences can present an additional risk when trying to evaluate securities.

Look, I would be very cautious investing in China, Russia or Africa. As I’ve mentioned in many articles about Chinese stocks, China is opaque. And current headline risks can give investors pause.

Still, international exposure is necessary, and there are many international companies that you will find palatable because you know their products, and you know their name. Plus, they pay pretty good dividends to boot.

Top 10 Energy Stocks To Own For 2019: Sprouts Farmers Market, Inc.(SFM)

Sprouts specializes in selling natural, organic food and other healthy, specialized food products i.e. vegan and gluten-free offerings, at lower price points than Amazon’s (NASDAQ:AMZN) Whole Foods supermarket. Sprout’s revenue has grown significantly in recent years, and it definitely has many enthusiastic admirers. Moreover, as more people increase their focus on eating healthier food and losing weight, Sprouts’ growth should accelerate going forward.

Despite worries that price cuts at Whole Foods would make its offerings cheaper than those of Sprouts, the latter company’s products are still significantly less costly.

Sprouts is profitable, as it reported first quarter earnings per share of 50 cents for the first quarter and reaffirmed its fiscal 2018 EPS guidance of $1.22-$1.28. The company’s comparable sales growth came in at 2.7%, and its two year comp growth was 3.8%, suggesting that its comp sales accelerated in the first quarter of 2018 versus the first quarter of 2017.

Meanwhile, rising food costs tend to increase supermarket chains’ profits. There are indications that food inflation is accelerating. According to the USDA, at-home food costs had risen 0.4% in the first five months of 2018,versus a decline of 1.3% in all of 2016 and a loss of 0.2% in all of 2017. Meat prices rose 1.4% in May 2018 versus a 0.6% decline in all of 2017, while egg costs jumped 21.6% in May versus a 9.5% decline in all of 2017. The cost of fruits and vegetables had risen an average of 0.7% in the first five months of 2018 versus a 0.2% decline in 2017.

Importantly, the inflation of food away from home came in at 2.7% in May, up from 2.3% in all of 2017. As restaurant food becomes more expensive, people will choose to get more of their food from supermarkets and eat at home.

However it should be noted that the average increase in away from home food prices for the first five months of the year came in at 1.9%. Still, May’s jump may indicate that eating out is starting to become more expensive.

Finally, a larger supermarket chain or a slow growth food company could easily decide to buy Sprouts, as the market cap of Sprouts stock is still just around $3 billion.

Top 10 Energy Stocks To Own For 2019: Constellation Brands Inc(STZ)

Stocks to Buy Over $200: Constellation Brands (STZ)

Source: Shutterstock

 

Constellation Brands (NYSE:STZ) is my pick from the consumer goods sector. Down 5% YTD, STZ stock is taking a snooze in 2018 after several years of outsized growth.

Since 2011, it has had some spectacular years on the markets — up by 30% or more on five out of six occasions — suggesting what’s happening now is a severe case of reversion to the mean.

Don’t fret if you own its stock and if you don’t here’s why you might want to take a closer look at the company best known for holding the U.S. rights to Corona beer.

You see, Constellation Brands paid $245 million last October to buy 9.9% of Canopy Growth Corp (NYSE:CGC), one of Canada’s best-known and largest marijuana companies. Today, that investment is worth almost four-fold that amount.

However, that’s not the best part of its investment. No, the best part is that it’s going to make cannabis-infused drinks using Canopy Growth’s expertise. As states come online and legalize recreational marijuana use, Constellation gains a new market to sell into.

That’s a big deal. More so than the $800 million profit, it has already made on paper. If you want to bet on marijuana, this is as safe a bet as they come.

Hot Cheap Stocks To Invest In Right Now

There are ton of high-growth stocks out there. Everyone talks about the FANGs all the time. There are also all the hyper-growth Chinese internet stocks, the class of digital retailers which are riding e-commerce tailwinds to super-charged growth rates, all those big-growth cloud companies and a ton more.

In sum, there are a bunch of high-growth stocks in the stock market. But not all of them are stocks you should buy. And not all of them are stocks you should buy here and now.

After all, when it comes to the stock market, timing is everything.

With that in mind, here’s a list of four high-growth stocks which could be big winners in July.

Hot Cheap Stocks To Invest In Right Now: Shopify Inc.(SHOP)

Much like Alibaba and iRobot, Shopify Inc (NYSE:SHOP) is a secular growth stock which has hit a rough patch recently.

At its core, Shopify is a company which provides omni-commerce solutions for retailers of all sizes. Namely, this involves providing uniform sales capability across multiple digital retail channels (social media, website, mobile, etc) to both digital retail entrepreneurs and huge enterprises. This business model falls in the overlap of two mega-trends (e-commerce and decentralization), and as such, Shopify’s growth has been huge and the stock has been a big winner.

But Shopify stock has dropped off its highs recently due to legislation. In a landmark decision, the Supreme Court recently ruled that states have the constitutional power to require collection of sales taxes from digital retailers. Many market watchers view this is a big negative for all of e-commerce, since it means higher prices will now get passed onto consumers. That could slow down the e-commerce revolution, and investors are selling Shopify stock as a result.

But that won’t happen. E-commerce’s benefits are multi-faceted, and stretch far beyond low prices. Namely, e-commerce offers a wide array of convenience benefits which are ultimately unaffected by the Supreme Court’s ruling.

Meanwhile, Shopify also thrives due to its exposure to the decentralization megatrend. That megatrend is hardly affected by recent legislation.

Overall, then, the robust Shopify growth narrative which includes powering the e-commerce and decentralization mega-trends remains largely in tact. Consequently, Shopify stock could have a huge bounce-back in July as negative sentiment from the Supreme Court ruling normalizes.

Hot Cheap Stocks To Invest In Right Now: Uniti Group Inc.(UNIT)

Uniti Group (NASDAQ:UNIT) focuses on a different type of real estate than most real estate stocks. Specifically, the REIT focuses on communications infrastructure. Uniti’s portfolio consists of fiber networks, towers and other infrastructure related to telecom. The company operates both in the United States and Latin America.

The customer base for such REITs usually consists of the country’s largest telecom providers. In UNIT’s case, their primary customer has been the struggling firm Windstream Holdings (NASDAQ:WIN), from whom UNIT stock spun off. At its peak, WIN accounted for 65% of Uniti’s revenue. As WIN heads toward a possible bankruptcy, UNIT has moved away from the troubled telecom company.

Though the relationship with WIN exposes UNIT investors to possible perils, one developing phenomenon could make it worth the risk — 5G. The major telecom companies will each spend tens of billions of dollars over the next few years to build 5G telecom networks. 5G will increase speeds exponentially. Consequently, this will increase the demand for towers, small cells and fiber networks. This need for more infrastructure will be a boon to telecom REITs.

The current annual dividend stands at $2.40 per share, which brings the yield to about 11.8%. Analysts predict earnings per share (EPS) of $2.51 for 2018. Hence, the dividend should sustain itself despite the issues with Windstream. Stock appreciation also remains a possibility. At just above $20 per share, it trades approximately in the middle of its 52-week range. UNIT stock traded as high as $32.73 per share in 2016.

It could reach that high and beyond with the increasing demand for telecom real estate. Increased demand would also increase profits, creating a virtuous cycle that also takes the dividend higher. For those that can stomach the risks associated with Windstream, UNIT stock could profit investors on both income and growth.

Hot Cheap Stocks To Invest In Right Now: Intuitive Surgical Inc.(ISRG)

Intuitive Surgical (NASDAQ:ISRG) is my pick from the healthcare sector. Up 34% YTD through July 2 compared to 12% for its medical instrument peers, it has managed to deliver an annualized total return of 44% over the past three years, 2.5 times the return of its peers.

I first recommended ISRG in March 2013. I reaffirmed my recommendation four months later despite it falling by 13% on concerns the company’s da Vinci robotic surgical systems — which cost in the millions to purchase — would no longer be a spending priority for hospitals looking to cut costs under Obamacare.

I wasn’t buying the word on the street feeling surgeons would continue to clamor for their use and hospitals would comply. Since 2013, revenues have grown by 38% to $3.1 billion, while non-GAAP net income has increased by 56% over the same period to $1.05 billion from $671 million.

In May, Intuitive Surgical announced that the FDA approved its da Vinci SP robotic system for use in single-incision urological procedures.

Shipments of the new product will begin in Q3 2018, providing another growth vehicle for ISRG, the leaders in medical technology for minimally invasive procedures.

I don’t see Intuitive Surgical slowing down anytime soon.

Hot Cheap Stocks To Invest In Right Now: iRobot Corporation(IRBT)

For all intents and purposes, iRobot Corporation (NASDAQ:IRBT) is the face of the global consumer robotics revolution.

iRobot is most famous for its robotic vacuum cleaner, but it also makes other household robots, such as a robotic pool cleaner and robotic mop. It is also rumored that the company is going to extend its product portfolio to soon include other robots, such as a robotic lawnmower.

From this perspective, iRobot is much more than just the company behind robotic vacuum cleaners. They are a company leading a household consumer robotics revolution which has a wide array of applications.

IRBT stock, though, doesn’t always act like this is the case. Over the past two quarters, IRBT stock has dropped like a rock because management has provided weak profit guides. But those weak profit guides are a direct result of the company investing into new products, which grow the company’s addressable market and add firepower to the long-term growth narrative.

Overall, then, such margin concerns are unnecessarily short sighted. It seems the market is starting to realize this, and IRBT has been bouncing back lately.

Second quarter earnings are due at the end of the month. Those number should be quite good as Google Trends for iRobot have remained quite favorable. Those strong numbers should affirm the recent bounce in IRBT stock, and send this stock back to all-time highs.

Hot Cheap Stocks To Invest In Right Now: NutriSystem Inc(NTRI)

Like Weight Watchers, NutriSystem reported stronger-than-expected results. NutriSystem also raised its fiscal 2018 earnings per share guidance to $2.04-$2.14 from $1.99-$2.09 and increased its full-year top-line outlook to $693 million-$708 million from its previous guidance of $685 million-$705 million.

NutriSystem has rallied around 30% since it reported its results, but NTRI stock is still trading at a low forward price-to-earnings ratio of around 16.

NutriSystem appears to be developing innovative new marketing segmentation strategies and potent new products. For example, the company has launched ads targeting diabetes patients and later this year, responding to demand it identified among its customer base, will begin targeting vitamin users with a new line of vitamin pack products.

Additionally, NutriSystem says that the engagement with its app is rising and it has identified proven marketing techniques of recapturing former customers who have left the program. Finally, the company recently added 19 new items to its menu, suggesting that it is focused on incorporating additional, innovative, popular foods to its offerings.

In my experience, companies that innovate frequently and significantly are much more likely to succeed than those that largely stay with the status quo. Judging by Nutrisystem’s results, the company’s significant, frequent changes on the product and marketing fronts appear to be working. These effective adaptations make NutriSystem stock very attractive.

Finally, the revenue generated by NutriSystem’s South Beach line jumped 150% year-over-year in the first quarter, suggesting that the line’s popularity is rapidly increasing.

Best Medical Stocks To Invest In 2019

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Most investors don’t get too excited about pipeline stocks. Maybe it’s because they’re not changing the world like tech or healthcare companies. However, while they might not generate exciting headlines, they can produce jaw-dropping returns if investors hold on for the long haul.

Several pipeline stocks have produced market-beating returns since their formation. The follwing stocks stand out because they have turned a relatively small up-front investment into a massive windfall over the past two decades.

Top 5 Cheap Stocks To Buy Right Now

Dividend stocks, in general, are the best kinds of investments to have in retirement. They provide both the supplemental income when it’s time to rely on one’s nest egg while also allowing retirees to keep growing wealth through stock appreciation and higher dividend payments over time. That isn’t something you are going to get from cash under a mattress or from bonds.

Making the most of dividends in retirement means picking great dividend stocks that will be able to provide a steady stream of income for years to come, and it’s helpful if said stocks pay a high yield today. So we asked three Motley Fool investors to each highlight a stock they think is a perfect fit in a retirement portfolio. Here’s why they picked the following stocks:

Top 5 Cheap Stocks To Buy Right Now: Orange(ORAN)

The company formerly known as France Telecom offers a somewhat unusual dividend policy. The payouts don’t always rise year over year, the way you might expect from an American dividend hero. Instead, the company adjusts its payouts up and down as needed, responding to cash flow trends and upcoming expenses.

Over the last five years, Orange’s trailing dividend payouts have bounced around between $1.3 billion and $1.8 billion.

What’s more, the normal cadence of quarterly dividend checks is replaced by a biannual schedule — Orange sends out those dividends once every six months.

European investors are used to these things, even if Americans aren’t.

Either way, Orange’s current dividend yield stands at a fantastic 5.6%. The stock has been lagging the overall market in recent years, hampered by the rise of low-cost rivals in France and other major European markets. In the long run, Orange’s growth strategy hinges on high-speed broadband services and expansion in underdeveloped markets such as Poland and Romania. That’s the one service consumers in western Europe are still willing to pay a premium for.

The company is also exploring Africa in a big way with mobile networks in 21 countries on that continent. Thirteen of these markets have fast and reliable 4G networks already and the rest will follow.

So Orange’s dividend payments may be a little bumpy and unpredictable, but the business foundation is strong and I expect healthy growth for many years to come. The dividends will follow suit, and it’s hard to complain about a nearly 6% payout based on an undervalued stock.

Top 5 Cheap Stocks To Buy Right Now: NVR Inc.(NVR)

The fact that inventory turnover is incredibly low in this business is part of the reason why NVR is one of the more attractive stocks in this industry. Typically, a homebuilder will buy large plots of land, divided it up into lots, lay the initial groundwork like roads and utilities, build a couple display homes, get a customer to sign a contract to have a home built, then build the home before it can recognize revenue. 

With all of those steps, it can be an incredibly speculative business. Are land purchases today going to be favorable locations two to three years from now? Is the housing market going to remain strong? How much leverage can a company take on to develop these lots before it needs to have revenue coming in the door? These sorts of questions are the ones that will keep a homebuilding management team awake at night.

Instead of sweating the more speculative aspects of the business, NVR agrees to land purchase agreements with land developers. Think of it as a futures contract: NVR pays a small amount of cash to a developer up front, which gives it the right to purchase completed lots at deep discounts. This drastically reduces the amount of capital the company needs to commit to a development before it can start to recognize revenue, and the company doesn’t have to take on an immense amount of speculative risk or leverage.

Another attractive aspect of NVR’s business model is that it focuses on performing exceptionally well in its limited geographic markets rather than have operations thinly spread across the country. By concentrating its efforts into the Mid-Atlantic and Great Lakes region, it can squeeze out operational efficiencies and generate the highest rates of return in the business. By remaining a regional player, it also means the company generates excess cash, which management uses to buy back stock at a high rate.

If there is one thing that concerns me about NVR, it’s that management may be a little too generous with its stock grants such that it impacts shareholder returns. A lot of NVR’s value creation comes from a consistently lower share count, but stock grants to management have more than offset share repurchases over the past 18 months. If that issue is just a short-term blip, then NVR looks like a great investment.

Top 5 Cheap Stocks To Buy Right Now: Party City Holdco Inc.(PRTY)

Shares of Party City have surged 68% from their 52-week low, and are up 31% over the last six months as Wall Street comes to celebrate the retailer’s partylike atmosphere. While no business is completely immune from the impact of Amazon.com, Party City is one of a handful of businesses that look Amazon-resistant.

It operates some 880 stores. But the big kick are the 250 to 300 Halloween-themed outlets like Halloween City that spring up nationwide every fall and end up contributing about 20% to total revenue. It’s the biggest holiday of the year for the specialty retailer.

But beyond its own stores, it is less well known that Party City also distributes party items to over 40,000 retail outlets worldwide. Third-party wholesale revenue amounted to $629 million in 2017, or 26.5% of its total of $2.37 billion.

Despite all the gains it’s made, there is still plenty of opportunity for growth and expansion, especially since Party City is trading as if it were a broken business. Its stock is valued at only 14 times trailing earnings and seven times next year’s estimates, while also going for a deeply discounted eight times free cash flow. So investors who pick up Party City stock now may have a reason to celebrate later on.

Top 5 Cheap Stocks To Buy Right Now: Copa Holdings, S.A.(CPA)

In her just-released updated edition of How to Retire Overseas (Everything you need to know to live well (for less) abroad), travel writer Kathleen Peddicord speaks glowingly of Panama City, Panama, as a perfect destination for retirement — so much so that she recently moved to the city as her own business’s new home base.

Panama City has a little bit of everything that retirees might want, starting with a low cost of living, and running through first-world infrastructure and a first-rate healthcare system, tax benefits for retirees and ease of opening a business in retirement, and ending with easy access to "home" in the U.S.

One of the reasons American retirees in Panama City have such easy access to U.S. cities is Copa Holdings, parent company of Copa Air, which services 75 destinations in 31 countries (the U.S. included) out of its hub and headquarters in Panama City.

Copa is growing like a weed — and I’m not just talking about its flight plans. Copa pays its shareholders a big 3.7% dividend yield, but it’s so profitable that this consumes barely 30% of its profits. Copa reported $404 million in GAAP profit over the past year, giving it a P/E ratio of 10. That compares favorably to analysts’ projected 13% growth rate for the stock — and Copa is even cheaper when valued on free cash flow.

If you’re a retiree, and perhaps considering Panama City as a place to retire, I think Copa Holdings is a fine dividend stock to consider investing in as well.

Top 5 Cheap Stocks To Buy Right Now: Kinross Gold Corporation(KGC)

Kinross Gold wouldn’t have made it to this list if not for the stock’s drop in recent months. Kinross was, in fact, one of the top-performing gold-mining stocks in 2017, but the market hasn’t found a reason to pump more money into the stock so far this year.

Kinross shares took a deep dive earlier in the year after the miner reported fiscal 2017 numbers. Here’s how it fared.

Metric FY 2016 FY 2017
Gold production (in ounces) 2.67 million 2.79 million
Revenue $3.3 billion $3.47 billion
Net profit/loss $445.4 million ($104 million)
Adjusted net profit $178.7 million $93 million
All-in sustaining cost (AISC) per gold equivalent ounce $954 $984

DATA SOURCE: KINROSS GOLD.

For fiscal 2018, Kinross expects:

  • Gold production of 2.5 million ounces
  • AISC of $975 per ounce
  • Capital expenditure of $1.1 billion compared with $897 million in 2017

While asset impairments reversal and sale proceeds helped Kinross earn a big profit last year, lower production and higher cost estimates for 2018 didn’t go down well with the market. Higher capital expenditures could also mean lower free cash flow (FCF) — Kinross generated $54 million in FCF last year.

A businessman looking at buy and sell graphs.

NOT EVERY GOLD STOCK THAT’S ON SALE IS A BUY. IMAGE SOURCE: GETTY IMAGES.

In May, the market pummeled Kinross again for lower first-quarter profit. In reality, Q1 was a strong quarter, with revenue climbing 13% and AISC dipping to a record low of $846 per gold-equivalent ounce. Kinross’ key phase one expansion at Tasiast is near completion and expected to boost throughput capacity to 12,000 tons per day during the latter half of the year. Other projects, including Round Mountain and Bald Mountain in Nevada and Fort Know Gilmore in Alaska, are also on schedule and budget. 

I don’t see anything wrong with Kinross: It has a strong pipeline of projects that should boost production and lower costs over time, has ample liquidity at hand, strong cash flows, and no debt maturing until 2021. Gold investors might want to put Kinross’ ill-timed investments in the rearview mirror and put the stock on their radar.