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Top Penny Stocks To Own For 2019

Buying and holding growth stocks is a great way to predictably generate wealth over the long term. But not all growth stocks are created equal; the very best have unique characteristics that set them apart — and set up investors for years of success.

So we asked three top Motley Fool investors to each discuss a growth stock that successful investors can appreciate. Read on to learn why they like these stocks.

Top Penny Stocks To Own For 2019: Marathon Oil Corporation(MRO)

Marathon Oil has spent most of 2018 finishing its portfolio cleanup plan. Not only did the company receive the final payment from last year’s sale of its oil-sands position, but it also sold its Libya subsidiary. Those deals brought in $1.2 billion in cash, boosting the company’s balance to a healthy $1.6 billion. That level should continue rising this year since the company can balance its budget at $50 oil, putting it on pace to generate $500 million in excess cash if crude averages $60 a barrel — and even more at current prices. Marathon hasn’t yet decided what it plans to do with the money, other than investing some of it in buying land in an emerging shale play in Louisiana, though the company said that it could start returning some of it to shareholders later this year via a stock repurchase program.

Top Penny Stocks To Own For 2019: Zillow Group, Inc.(ZG)

Shares of Zillow Group have climbed nearly 50% so far in 2018 as of this writing. After all, with Premier Agent revenue expected to arrive at just above $900 million this year — still a small fraction of the roughly $12 billion that real estate agents spend each year advertising their listings — Zillow enjoys a long runway for growth from its core business. And that’s not to mention the supplemental growth of its smaller rentals, mortgages, and other real estate services segments.

But two developments have actually tempered the stock’s growth in recent months, giving investors a much better chance to step in and participate in its longer-term gains.

First, in April Zillow pulled back hard after the company announced it would accelerate its home-flipping initiatives with the the expansion of Zillow Instant Offers. As part of that effort, Zillow expects to hold around 300 to 1,000 homes for resale by the end of 2018 — a capital-intensive effort that some investors worried would come at the expense of its current core Premier Agent business. Sure enough, though Zillow has assured agents the program actually encourages sellers to use an agent regardless of whether they accept Zillow’s offer for their home, Instant Offers has certainly ruffled some feathers in its early stages. Once real estate industry professionals realize Zillow still has their best interests at heart, however, I think the program should prove to be an astute move to drive incremental revenue and profits for the company.

Second, late last month, Zillow stock pulled back again when it announced plans to raise as much as $725 million in net proceeds from a combination of offering new stock and debt. As I subsequently pointed out, however, I think Zillow could use the cash to potentially acquire one of its largest competitors, further solidifying its industry leadership as more people inevitably flock to online real estate platforms.

Top Penny Stocks To Own For 2019: Markel Corporation(MKL)

In order to be a truly successful investor, you need to have the patience to buy and hold shares of great companies for the long term. And it’s hard to think of a business that fills that mold better than Markel.

There’s a reason they call this specialty insurance and financial holding company a "mini-Berkshire Hathaway." Markel follows the formula that Warren Buffett used to make Berkshire a household name — that is, with its core insurance operations, its long-term-oriented investment portfolio, and its diversified group of noninsurance, noninvesting businesses acquired and held under the Markel Ventures segment.

As per usual, last quarter demonstrated the effectiveness of this three-tiered approach for generating shareholder value. Even as Markel’s investments endured stock market volatility at the start of this year, Markel was able to lean on its profitable insurance business and growth (both organic and acquisitive) at Ventures to offset that temporary weakness. Thus, Markel’s book value per share still climbed more than 8% year over year to roughly $671. So even with Markel stock having more than doubled over the past five years, shares still trade at around 1.6 times book value — a reasonable premium for this high-quality company. And I think long-term investors who buy now can still enjoy market-beating returns for decades to come.

Top Penny Stocks To Own For 2019: Noble Energy Inc.(NBL)

Like most of the other oil producers on this list, Noble Energy put the finishing touches on its portfolio cleanup by selling several assets, including its position in the Gulf of Mexico. That gave the company the money to pay down some debt as well as repurchase shares, as it announced a $750 million buyback program. That authorization is part of a plan to return $1.3 billion in cash to investors by the end of 2020, which also includes the company’s dividend. However, with Noble Energy basing that plan on $50 oil, it will likely be able to return even more cash to investors in the coming years, given where crude prices are these days.

Best China Stocks To Buy Right Now

Many conservative investors gravitate toward blue-chip dividend stocks with healthy yields well above what the overall market pays. Right now, the market average of about 2% isn’t all that much for income-hungry investors, especially as bond rates start to rise more sharply.

Fortunately, you can find a number of solid investment choices within the Dow Jones Industrials (DJINDICES:^DJI) that yield 3% or more. Among them are these stocks. Each of them faces challenges that could present difficulties in the short run, but they’ve demonstrated an ability to overcome adversity and produce long-term growth.

Best China Stocks To Buy Right Now: Apple Inc.(AAPL)

Apple Inc. (NASDAQ:AAPL) appeared to be the showstopper on Friday as it sprung to a record high of $184.25 during Friday on news that Warren Buffett’s Berkshire Hathaway Inc had beefed up its stake in the iPhone maker.  Apple shares jumped more than 3.9% on May 4, 2018, marking the largest weekly percentage gain since October 2011.

Apple’s ascent eradicates fears about subdued iPhone demand which clouded the tech and semiconductor market a few days back. The technology giant topped the earnings and revenue estimates in the most-recent earnings report. Apple beefed up its plan to return cash to its shareholders through dividend hikes and additional buybacks.

Best China Stocks To Buy Right Now: Quanta Services, Inc.(PWR)

Quanta Services Inc (NYSE:PWR) is a leading national provider of specialty contracting services and one of the largest contractors serving the transmission and distribution sector of the North American electric utility industry.  Quanta Services has operations in the United States., Canada, Australia and other selected international markets. This Zacks Rank #2 company has a Value Score of A. The 3-5 year EPS growth rate for the stock is estimated at 8%.

Best China Stocks To Buy Right Now: Ulta Salon, Cosmetics & Fragrance, Inc.(ULTA)

Ulta Beauty, which sells cosmetic products and uses in-store salons to generate foot traffic at its stores, opened 100 new stores in 2017 and finished the year with 1,074 locations. It plans to open another 100 stores this year.

Ulta Beauty is confidently expanding because it consistently grows its comparable-store sales, revenue, and earnings at impressive rates. The retailer’s comps rose 11% last year as its revenue and adjusted diluted EPS grew 21% and 25%, respectively. Those are solid growth rates for a stock that trades at 24 times this year’s earnings.

However, two factors caused Ulta’s shares to slide 14% over the past 12 months. First, Ulta expects just 6% to 8% comps growth this year, with revenue growth in the "low teens." This indicates that Ulta could rely more on new store openings than comps growth to fuel its revenue expansion.

Second, some investors fear that Sephora’s advance into J.C. Penney stores, Amazon’s partnerships with high-end beauty brands, and other headwinds could diminish Ulta’s leadership.

Those concerns are valid, but Ulta’s comps growth remains impressive for a 28-year-old retailer, and its unique combination of stores with salons should hold its rivals at bay. The company also has $397.4 million in cash, cash equivalents, and short-term investments to fall back on, as well as a clean balance sheet. With a strong track record and solid financials, I think Ulta still has room to run.

Best China Stocks To Buy Right Now: Markel Corporation(MKL)

Warren Buffett gave the world a great method of making money: Open a successful insurance operation and then invest the premiums that clients pay in investments that pay a lot more than the fixed-income securities that most insurance companies choose for their portfolios. Markel’s history as a publicly traded company dates back to 1986, and the company has an extremely good track record of generating positive underwriting profits, running about 70% with several years sporting very attractive returns.

Markel still has a much different emphasis than the Oracle of Omaha’s insurance operations. Rather than having brand-name car insurance that ranks among the nation’s most popular brands, Markel instead offers only specialty lines of insurance. There’s not as much volume for the types of insurance that you can get from Markel as there is for vanilla lines like auto, home, or life insurance. But because it’s tough to find other companies that are willing to take on the risks that Markel’s willing to assume, the specialty insurance company is able to get enough of a margin to protect it from adverse events. Moreover, because it writes a lot of different types of insurance, Markel’s different risks aren’t as correlated with each other, making a catastrophic year where everything goes wrong less likely.

With a sizable investment portfolio, Markel has generated strong returns the same way Buffett has. As long as its stock-picking prowess remains good, Markel should continue to find ways to deliver performance for its shareholders.