Tag Archives: AUY

Hot Oil Stocks To Invest In 2019

Cryptocurrencies are still a hot ticket. Though they’ve fallen a long way from December’s peaks, bitcoin prices are still up 588% over the last year and Ethereum has gained 1,108% over the same period.

That high-adrenaline thrill ride appeals to some investors, while others see doom in unstable cryptocurrency prices and uncertainty about which coins to follow and which should be ignored. So we asked a few of your fellow investors here at The Motley Fool for some calmer investment ideas that still pack a tremendous growth punch.

Read on to see why you should forget about bitcoin and Ethereum in favor of following stocks, at least when it comes to serious investments for the long term.

Hot Oil Stocks To Invest In 2019: NutriSystem Inc(NTRI)

Weight management services provider NutriSystem Inc. (NASDAQ:NTRI) used to be a big growth company with 20%-plus revenue growth and healthy long-term margin drivers.

But NTRI botched the start of the 2018 Diet Season, largely due to complacency in the video ad campaign and lack of innovation in the product pipeline. Consequently, revenue and margin growth to the start the year slipped into negative territory, and NTRI stock dropped.

But the company’s first quarter numbers were actually much better than expected, and illustrated that early 2018 headwinds are now largely in the rear-view mirror. Consequently, the longer-term growth narrative in now coming back into focus, and that narrative is largely positive considering secular tailwinds in healthy eating and active lifestyles remain as strong as ever.

With that longer-term narrative back in focus, NTRI stock looks dirt cheap here and now. This is a double-digit revenue growth company with healthy margin drivers, the sum of which should drive nearly 20% earnings growth over the next 5 years. NTRI stock trades at just 16-times forward earnings, which is dirt cheap for 20% earnings growth.

Also, NTRI stock usually trades at 23.5-times forward earnings. Thus, today’s 16-times multiple is a pretty steep 30% discount to “normal”.

NTRI stock did bounce back above $30 following the company’s strong Q1 report. But there is a strong argument for why this stock should head to $40 and up in a hurry, considering the strong growth prospects and still discounted valuation. As such, this is one of the best cheap stocks to buy.

Hot Oil Stocks To Invest In 2019: Lennar Corp.(LEN)

 This Miami-based homebuilder is off nearly 7% this year, creating an ideal buying opportunity for long-term investors.

Boasting a market cap of over $14 billion, the company suffered a pre-tax litigation loss of $140 million, and earnings were about $0.50 lower per share year-over-year in fiscal 2017.

However, growth metrics remained very bullish with deliveries up 11%, new orders up 11%, and revenues jumping 15% in the same time frame.

I am also very excited about the CalAtlantic strategic move.

Lennar CEO Stuart Miller bullishly proclaimed, "Our company is very well positioned for future growth, and we look forward to another strong year in 2018. Our pending strategic combination with CalAtlantic, which is scheduled to close on February 12, 2018, will add to the future growth of our company as we strategically combine two great companies in markets that we know well with products that we know well, to create the leading homebuilder in the country."

Hot Oil Stocks To Invest In 2019: Paychex Inc.(PAYX)

Fundamentals aside, Paychex, Inc. (NASDAQ:PAYX) simply seems like a good stock. The second-largest payroll processing company in the U.S. has a solid moat – and its business model creates high switching costs. Paychex is simply embedded in its customers’ businesses — and given the growth in small and medium businesses of late, that seems like a good thing long-term.

There is a risk of disruption here. Software provider Workday Inc (NASDAQ:WDAY) represents a potential threat, though Paychex is developing its own products to fight back. A macro downturn could hit the stock, though the company managed through the 2008-09 financial crisis reasonably well.

PAYX isn’t necessarily cheap, either, at 23x forward earnings. But this is a case of paying for quality, as Will Healy argued last month. And a 3.1% dividend yield makes the stock attractive to income investors as well.

PAYX probably isn’t going to bring in huge rewards, but for patient long-term investors, it looks like an intriguing choice.

Hot Oil Stocks To Invest In 2019: Yamana Gold Inc.(AUY)

No gold stocks to buy list is complete without mentioning at least one speculative name: just the fact that you’re interested in gold means you’re probably willing to stomach some risk. My best gamble in this sector? I’m going to go with Yamana Gold Inc. (NYSE:AUY).

A few years back, AUY was one of the top gold stocks by market capitalization. It’s still a highly respected name, but the company lost a significant amount of its luster. On a YTD basis, AUY shed more than 11%. Over the last five years, the company hemorrhaged a devastating 78.5%.

Looking at its financials, you can see why investors have run for the exits. Revenues have been stagnant in a deflating sector, leading to sharp earnings losses. Unlike other companies, AUY hasn’t improved its balance sheet, and its free cash flow is a mess.

On the flipside, management has expended significant effort curbing operating expenses. Subsequently, its earnings, while negative, are substantially paring losses. With enough time, AUY could potentially turn the ship around.

How likely is this scenario? I’m not sure, which is the gamble. However, gold sentiment overall is positive, and will probably continue improving. Also, for what it’s worth, seasonality trends are favorable.

It’s a long shot, but AUY has the right stuff to surprise!

Hot Oil Stocks To Invest In 2019: 3M Company(MMM)

3M MMM stock

Source: Dean Hochman via Flickr (Modified)

 

IN April, I included 3M Co (NYSE:MMM) in my list of seven stocks that are great stocks and great businesses.

Over the past decade, 3M stock has delivered an annualized total return for shareholders of 11.7%. For comparison, General Electric Company (NYSE:GE) delivered -4.1% for its shareholders over the same period — a record I’m sure leaves it at the bottom of S&P 500stocks.

So, why did MMM lose more than 10% in April? InvestorPlace’s Bret Kenwell can explain. Kenwell wrote on April 25:

“When the stock market’s not in a good mood, missing earnings and coming up short on guidance — no matter how much the stock has already suffered — is a recipe for disaster. From the midpoint of management’s outlook, 3M now expects earnings per share of $10.37 vs. $10.45 in the prior outlook and organic sales growth of 3.5% rather than 4%.”

With most companies hitting earnings out of the park in a trading environment in which investors don’t seem to care about earnings beats, to miss earnings is inexcusable.

As Kenwell suggests, 3M is in a funk, which makes it a great time to buy its stock in my opinion.