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Hot Stocks To Watch For 2019

We are halfway through the calendar year and stock markets are sitting right about where they began 2018. Optimism about economic growth and lower corporate taxes has roughly balanced with worries about trade disruptions to leave the S&P 500 up by just 1% through the six months ending on June 30.

A few companies have dramatically outperformed that result by logging gains of as much as 245% so far this year. Below, we’ll take a closer look at a few of these standout stocks.

Hot Stocks To Watch For 2019: Roku, Inc.(ROKU)

When people think about cutting the cord from their cable TV operator, names that usually spring to mind include Amazon.com, Netflix, and maybe Hulu, but the one they should be thinking about is Roku.

The streaming device maker is actually in the midst of a major transformation to move away from hardware sales to one where its advertising platform is central to its business thesis. Last quarter Roku was finally able to make the pivot so that revenues from ads and fees exceeded those of its devices. Platform revenues more than doubled to $75.1 million, significantly ahead of the $61.5 million it made on its players.

It’s not abandoning the device market — a branded sound bar for controlling a home entertainment system will be coming to market soon — but advertising revenue will be the focus from here on out. It just launched its own ad marketplace and has lined up some heavy hitters, including Turner Broadcasting, Fox, and Viacom. According to Cord Cutter News, 70% of those who have cut the cord own a Roku device, while the maker of OTA DVRs, TabloTV, says 70% of its users also use a Roku device.

As the viewing public increasingly moves to streaming, they’ll turn to Roku in one form or another, and those advertisers trying to reach them, will do so as well.

Hot Stocks To Watch For 2019: Netflix, Inc.(NFLX)

Shares of streaming video giant Netflix (NASDAQ:NFLX) have doubled this year following a few quarterly reports that have investors feeling giddy about its growth potential. Its most recent outing was highlighted by a record 43% sales spike that came as subscriber gains blew past management’s forecasts despite a 14% increase in average membership fees.

A family watching TV.


Those two trends imply that the streamer has a long runway for growth ahead both in its global subscriber base and in monthly prices that currently hover around $11. Netflix will post its next earnings report in mid-July, when it is expected to reveal it added another 6 million members worldwide.

Best Heal Care Stocks To Invest In 2019

Anyone who was smart enough to buy Netflix (NASDAQ:NFLX) at its IPO in 2002 and hold until today is sitting on a gain of 27,430%. That’s a high enough return to turn a small amount of money into life-changing wealth.

So, which stocks do we think are capable of delivering gains like that for shareholders who buy today? We asked a team of investors to weigh in, and they picked following stocks.

Best Heal Care Stocks To Invest In 2019: Intuitive Surgical Inc.(ISRG)

I own  Intuitive Surgical (NASDAQ:ISRG), and in front of my gathered fellow Heels last week, I put Intuitive Surgical on this list, as well, so I present it for you again today. It reminds us to continue to add to our winners. It was a winner a year ago. It had a three for one stock split, something that I don’t personally care about. I don’t think we should spend a lot of time talking about stock splits. I realize some people think they’re exciting or are confused by them.

I’ll just point out that Intuitive Surgical, which has split a few times over our nearly 15 years of acquaintance. I like that stock just as much today, over the next 15 years, as I did 15 years ago. In fact, Intuitive Surgical is more clearly in the lead with more resources today than it was 15 years ago.

This is a company that spends about $250 million a year just on R&D inventing the future. A lot of upstart competitors would dream of having that as their revenues or, even more, their profits. Well, Intuitive Surgical is spending that much just on R&D. Love the company and I look forward to an increasingly minimally invasive future.

Best Heal Care Stocks To Invest In 2019: Proto Labs, Inc.(PRLB)

Finding the next Netflix isn’t going to be easy, but patient investors who are willing to stick around for a decade or longer could find that 3D-printing service provider Proto Labs is actually Netflix version 2.0.

The reason Netflix is so successful is that it listened to its customers and fit their demand for streaming content. It didn’t reinvent the wheel. It merely offered a high-margin content service that few competitors have come close to matching. Proto Labs can do the exact same thing for the 3D-printing space.

The secret to Proto Labs’ success is that it’s not involved in the development and manufacture of 3D-printing machines. What we’ve seen from the likes of 3D Systems and Stratasys is that industrial demand for 3D-printers can ebb and flow. Wall Street and investors got their hopes way too high for 3D-printing demand between 2012 and 2014, and when consumer-based sales faltered and industrial demand waned, the industry was slammed.

However, Proto Labs is all about being an on-demand service provider for 3D-printing needs. It provides quick turnaround orders for prototypes or other 3D-printing needs for businesses and clients, making it something of a FedEx office for the 3D-printing space. Not having to spend as much as its peers on research and development, as well as not having to hang onto expensive inventory, is a big reason why Proto Labs’ profits and growth haven’t missed a beat.

Furthermore, Proto Labs isn’t reliant on a single type of technology when receiving orders from customers. This gives the company the flexibility to use whatever production method best fits the bill for a small or large volume order.

Lastly, Proto Labs brings ease of use to the table, just like Netflix does for its members. The CAD/CAM design process can be confusing for businesses. With Proto Labs, there are no concerns about how to work the equipment since the entire process is handed off. 

Looking ahead, Proto Labs is expected to nearly double its sales to an estimated $669 million by 2021, with earnings per share more than doubling to $4.39. This not only suggests rapid and consistent growth, but also margin expansion. Say hello to Netflix 2.0.

Best Heal Care Stocks To Invest In 2019: Netflix, Inc.(NFLX)

Netflix has built itself into a video-streaming powerhouse and now boasts more than 125 million members. The company is experiencing substantial user growth as it expands into international markets. Netflix’s non-U.S. streaming subscribers now account for 54% of the company’s paid subscribers, and in the first quarter of 2018 the company increased paid international subscribers by 42% year over year.

Investors have also been happy to see the company’s sales and earnings continue to spike. Revenue was up more than 40% in the most recent quarter to $3.7 billion, and diluted earnings per share of $0.64 were up 60% from the year-ago quarter, which far outpaced any of the company’s quarterly earnings in 2017. Net income also increased about 63% year over year to $290 million.

Netflix is facing an increase in competition on several fronts, most recently from Disney’s (NYSE:DIS) announcement that it will bring its own content streaming service to market sometime this year. Disney has a war chest of old movies and shows, along with owning massive content franchises like Star Wars and Marvel, which could make Disney’s service a strong contender for people’s money.

But Netflix will likely be able to fend off Disney, and other players including Amazon and Hulu, because of its treasure trove of user data. For years, Netflix has been collecting users’ viewing habits (everything from what we watch and when we watch it) so it can create original content and purchase programming it knows its members will love. Tapping into this data allows Netflix to create a network effect that keeps its users watching more Netflix content, and thus supplying it with more viewing data.

Netflix is spending a lot of money — between $7.5 billion and $8 billion in 2018 — on content, and that’s up from $6 billion last year. Some of this spending comes from Netflix shelling out cash to create shows that will appeal to viewers in local international markets. The company’s subscriber growth shows that spending all of this cash is paying off, but investors should keep an eye on these expenses to see if they continue to climb. At some point, the company should be able to curb spending a bit, or at least let it stabilize, once it’s built up enough original content. But Netflix’s current collection of original content, and its ability to know what its users want to watch, should help it continue dominating the content streaming space for years to come.

Top 5 Undervalued Stocks To Watch Right Now

Cryptocurrency mining describes the process by which persons and/or businesses with high-powered computers and servers compete against one another to solve highly complex mathematical equations that are the result of the encryption designed to protect transactions on a blockchain network. The first to solve a group of equations and verify that those transactions (known as a block) are true — i.e., that the same virtual token wasn’t spent twice — receives what’s known as a "block reward." This reward is paid out in tokens of the virtual currency that’s being proofed.

For example, bitcoin currently has a block reward of 12.5 tokens. This means that the first person, group of individuals, or business to validate a block of transactions will receive 12.5 bitcoin tokens. With the world’s most valuable cryptocurrency currently hovering just above $8,000 per coin, we’re talking about a more than $100,000 haul for cryptocurrency miners who are successful in beating others to the proverbial punch.

Though cryptocurrency mining has been profitable, it’s clearly not feasible for everyone. Nevertheless, there are ways investors can gain exposure to crypto mining, should they choose, through the stock market. Here are four top cryptocurrency mining stocks that have either direct or partial exposure, based on sales, to the industry.

Top 5 Undervalued Stocks To Watch Right Now: Amazon.com, Inc.(AMZN)

E-commerce behemoth Amazon helped round out another strong quarter for the FANG stocks last Thursday. The company reported adjusted earnings of $3.27 per share, crushing the Zacks Consensus Estimate of $1.22 per share. Meanwhile, total revenue was up 43% year over year and forecasted Q2 revenue was on the high end of our prior consensus estimate.

Amazon also notched net sales of $5.44 billion in its Web Services unit, marking growth of 49% from the prior-year period and coming in ahead of our consensus estimate. Further, the company reported first quarter physical stores sales of $4.26 billion, underscoring the scope of the Whole Foods acquisition.

Amazon is currently sporting a Zacks Rank #1 (Strong Buy).

Top 5 Undervalued Stocks To Watch Right Now: iRobot Corporation(IRBT)

Shares of iRobot are still reeling from a more than 34% single-day drop in early February, as the market reacted to seemingly disappointing forward earnings guidance from the Roomba maker.

During the subsequent conference call, however, CEO Colin Angle elaborated that the company is purposefully opting to foresake some near-term profits in order to invest in driving top-line growth and maintaining market share in these crucial early stages of its long-term story.

"This is a movement in time where over the next three years the true winners in the consumer robot industry are going to be determined for the next decade," Angle added. He also noted that household penetration in the robotic vacuum market — which comprises the vast majority of iRobot’s current sales — is still "extremely low," in the single-digit percent range, while strong economic conditions are driving healthy global growth for the category.

Even more important, iRobot knows that the consumer robotics industry will grow to represent much more than "just" robotic vacuums. In floorcare, the company is enjoying steady growth for its supplementary Braava jet floor mopping robots. With the help of their fortress-like patent portfolio and sophisticated mapping and navigation technology, management has also spoken at length of their plans to make iRobot’s products the central hubs for enabling smart homes to behave more intelligently in the future.

It’s also developing a robotic lawnmower, which would propel it into a new multibillion-dollar market in the coming years. And Angle has previously revealed that iRobot is further exploring consumer robotic solutions for laundry folding, bathroom cleaning, and loading and emptying dishwashers.

As it stands, iRobot is still a relatively small company with a market capitalization of under $2 billion. But if even a fraction of its ambitious plans come to fruition when our kids are grown, I think it will prove to be a stock that early investors will be more than happy to brag about.

Top 5 Undervalued Stocks To Watch Right Now: Advanced Micro Devices, Inc.(AMD)

Perhaps the most prominent names of the bunch are NVIDIA (NASDAQ:NVDA) and Advanced Micro Devices (NASDAQ:AMD), which are best known for their graphics card and PC-based microprocessors, respectively. Neither company has exactly been forthcoming with regard to how much of their sales are tied to cryptocurrency mining, but each company has clearly benefited in recent quarters from the sale of graphics processing units (GPU). NVIDIA’s full-year results pointed to 41% year-over-year sales growth, with Advanced Micro’s sales up 25% on an annual basis. 

In fact, demand for GPUs has been so strong that the price of graphics cards, new and old, has been shooting higher. This actually creates a bit of a conundrum for NVIDIA and AMD, as Advanced Micro Devices is more commonly known. The core customers for both companies are avid gaming enthusiasts and enterprise clients. If crypto mining demand continues to pluck supply from the market, the high price for graphics cards could cause a rebellion among NVIDIA’s and AMD’s core customers. Then again, if these companies create a product specifically for crypto mining, they’ll drive down prices by increasing supply and squash the sales and margin boost they’ve recently experienced.

While both companies certainly have a lot going on beyond the cryptocurrency mining industry, it’s possible that their share prices could reflect the ebbs and flows of virtual currency token prices, so it’s something to keep in mind.

Top 5 Undervalued Stocks To Watch Right Now: Apple Inc.(AAPL)

You might be surprised to see that Apple (NASDAQ:AAPL), the world’s largest publicly traded company and a stock that the Oracle of Omaha, Warren Buffett, has come to fancy, was among the leading household names shown the door in Q1. David Tepper’s Appaloosa Management, which initially bought its first stake in Apple back in the third quarter of 2016, sold its entire position of nearly 4.59 million shares. Meanwhile, Larry Robbins’ Glenview Capital Management sold the entirely of its 1.26 million-share stake in Apple during Q1, which it had also held since the third quarter of 2016. As a whole, according to data from Bloomberg, large institutional investors sold 153 million Apple shares in the first quarter.

A woman holding an Apple iPhone X on the beach.


Why no love for the king of all tech and consumer stocks? Investors’ angst primarily centers around the belief that Apple’s iPhone sales growth can’t possibly continue at the same torrid pace it’s been on for years. Though iPhone revenue jumped a healthy 14% on a year-over-year basis, to $38 billion in Q1 2018, total units sold rose by a mere 3%, to 52.2 million iPhones. The $1,000 price tag of the newly introduced iPhone X certainly helped push sales higher, but the slow crawl of physical-unit sales is a clear concern among Wall Street pundits. 

Apple’s saving grace has been its incredible shareholder-return policy, which includes the biggest dividend in the world (in terms of total annual payout), and mammoth share buybacks. In fact, the company repurchased $23.5 billion worth of its own stock last quarter, all on the open market, and its board authorized the repurchase of an additional $100 billion worth of stock. These repurchases reduce the company’s existing share count, aiding earnings-per-share (EPS) growth and (presumably) making the company look more attractive from a valuation basis. 

Given that Apple recently raised its dividend by 16% and is valued at only 14 times next year’s EPS, I believe pessimists will be proven wrong over the long run.

Top 5 Undervalued Stocks To Watch Right Now: Netflix, Inc.(NFLX)

Netflix, Inc. (NASDAQ:NFLX) has been on a mission, both in reality and in the stock market. The company’s goal is to become the leader in global streaming. With 125 million customers, it’s well on its way to fulfilling that leadership goal. Heck, its market cap is just $7 billion short of Walt Disney Co (NYSE:DIS).

That puts things in perspective a bit.

But NFLX stock has been even more impressive than the company. It’s up 132% over the past 12 months and 73% since the start of 2018. That’s paved a solid — if also explosive — uptrend for investors. Take note of the chart to see what I mean.

As you can see, Netflix stock has been a beast. Notice that when it started 2018, shares weren’t over $200 yet! Now we’re already over $300. The move has been intense, but so long as the trends stay in place it’s hard to bet against NFLX.

Over its previous highs and above $330, Netflix stock is basing nicely. Momentum is strong and the stock is not yet overbought (blue peaks on the chart). Should nearby support fail, investors would be lucky to gobble up the stock near $300. There should be support near this level, along with the 50-day moving average and a rising uptrend line of support.

Given that the company just beat earnings, revenue and subscriber estimates, as well as provided subscriber guidance that topped analyst estimates, I’d rather be a buyer on dips than a seller on rips.

Top Blue Chip Stocks For 2019

 Some might ask, why are you investing so prudently now? Most investors say they want to build the biggest nest egg they can to fund the best possible retirement when that time comes. Once that day arrives, then they’ll change their portfolio to focus less on growth and more on income.

The irony is, the stable stocks best suited to reliably fund a retirements are largely the same stocks you should arguably already own leading up to your retirement; consistency is crucial as you chip away at your financial goals.

To that end, here’s a run-down of retirement stocks you should probably already own even before you make working at a job a thing of the past. Separately or collectively, they provide a nice balance of growth and income, as well as a comfortable balance of risk and reward.

In most cases dividend — and dividend growth — is in the cards, yet not necessarily at the expense of capital appreciation as well. You’ll need that too, as inflation can and often does outpace market-wide dividend yields.

Top Blue Chip Stocks For 2019: Netflix, Inc.(NFLX)

Netflix, Inc. (NASDAQ:NFLX) was the star of the show after earnings, surging 9.6% to a new record high, eclipsing its early March levels, thanks to better-than-expected Q1 results, upside guidance and a slew of analyst upgrades. Revenues rose more than 40% from a year ago on the addition of 7.4 million new subscribers globally vs. the addition of just under 5 million last year.

When the company last reported on Jan. 22, earnings of 41-cents-per-share matched estimates on a 33% rise in revenues.

Top Blue Chip Stocks For 2019: Pepsico, Inc.(PEP)

Many investors sifting through the markets looking for perfect dividend stocks for retirees are probably after stable companies with track records of solid dividend growth. If that describes what you’re seeking, look no further than PepsiCo, which has a slew of incredibly powerful brands, and a long history of raising its payouts.

In addition to its namesake Pepsi line, the company has 22 brands that generate over $1 billion apiece in annual revenue, including Gatorade, Mountain Dew, Tropicana, Quaker, Lay’s, Doritos and Cheetos. Currently, PepsiCo dishes out $0.805 per share quarterly for a yield just under 3% — and, incredibly, 2017 marked the company’s 45th consecutive annual dividend increase.

Another factor that should appeal to retirees looking for income stocks is that PepsiCo has a wide competitive moat due to its intangible assets, cost advantages and brand power. Because it has so many billion-dollar brands, it has strong relationships with distributors and retailers. Those brands will continue to bear fruit for Pepsi as the company funnels significant resources into growth with new innovative products and creative advertising, such as its recent partnership with Yankees outfielder Aaron Judge.

There’s no question consumer tastes in the U.S. are trending toward healthier products, and Pepsi understands the challenges it faces on that score. Among its plans, it has set a target of reducing the amount of sodium in 75% of its global foods portfolio to 1.3 mg or less per calorie. But given its strong brands and long history of dividend growth, if Pepsi can adapt to healthier food trend, it should remain a great income stock for retirees.

Top Blue Chip Stocks For 2019: Texas Instruments Incorporated(TXN)

Although you might recognize the brand because of its calculators, Texas Instruments is actually one of the leading suppliers of advanced semiconductors in the world. Its Embedded Processors make it a budding Internet of Things play, while its Analog solutions ensure it remains a diversified chip leader. TXN is currently sporting a Zacks Rank #1 (Strong Buy).

The company just posted adjusted earnings of $1.21 per share, surpassing the Zacks Consensus Estimate of $1.11 per share. This has already inspired positive estimate revisions, and the firm’s outlook now looks stronger. EPS growth is now expected to reach 26.4% this fiscal year. Plus, the stock is trading at a reasonable 19x forward 12-month earnings.

Top Blue Chip Stocks For 2019: HubSpot, Inc.(HUBS)

Lewis: All these businesses that we’re going to be talking about today check all these boxes. Why don’t we first start talking about this company HubSpot?

Feroldi: Sure. I have a question for you. When is the last time, Dylan, that you answered a cold call, opened up a letter in the mail, or watched a TV commercial, and you actually changed your buying behavior?

Lewis: I will tell you that I get a cold call every single day. You get those phone calls that, it’s your area code, and some telemarketer or some automated telemarketer is sending you some garbage automated message, and I’ve learned to just block every single one of them. So, never, to answer your question. [laughs] 

Feroldi: And that’s the world that we’re living in today. For decades, the traditional way that companies founded new businesses is, they would advertise with spots on TV and spots on the radio. But consumers really hate to be interrupted. That’s why they use caller ID, to make sure they never pick up a phone call that they don’t recognize. Or, they use DVR to skip TV ads. Or, they put their phone number on Do Not Call lists. These realities are making it harder and harder for companies to shout out their message to their consumers that they want to reach.

In response to that, this company called HubSpot basically is taking the traditional marketing playbook and flipping it on its head. They’re pioneering a strategy that they call inbound marketing. And the idea there is, don’t spend all your time, money and energy shouting at people and interrupting people to get them to learn about your product. Instead, try to create easy-to-use content like blog posts, like videos, so that when people are searching for a product or service like the one you’re offering, that you are easy to find. The idea is to put out blog posts that are helpful, that people will actually want to read naturally when they have a problem, and to essentially get people to come to you when they have a need.

Lewis: So, instead of blasting a message, you’re creating these organic "outreach," because the people are actually coming to you, experiences with potential customers.

Feroldi: Exactly. And think about your own shopping. When you have a problem, and you’re interested in learning about a new product, what’s the first thing that you do?

Lewis: Search it on Google. 

Feroldi: Exactly. You type in the problem to Google, or maybe you go to YouTube and look at a video for how to solve it. That’s exactly what HubSpot does. They offer tools that help companies to grow their social media presence, or to rank highly in search engine optimization, and to really put out free-to-consume content that builds up their brand and helps them to build trust with customers, so that when they are actually ready to buy, they’re already familiar with the company. This has proven to be hugely impactful for getting new customers to come onto the brand.

Lewis: It sounds like a business that rides the tailwinds of e-commerce and digital marketing very well, too.

Feroldi: Absolutely. And HubSpot’s target market is, they’re going after businesses that have between 10 and 2,000 employees, so they’re going after the small companies that don’t traditionally have the huge budgets.

Lewis: So, they’re kind of a fix for resource-poor companies, basically. [laughs] It’s nice to be a one-stop-shop. And that’s actually something we’re going to see with a lot of these businesses we’re going to talk about, is, you have a provider that makes it really simple to do something that you would have an entire department do if you were a larger company.

Feroldi: Absolutely. HubSpot sells using a software-as-a-service or SAAS model. Customers come on and they subscribe, and they can use all kinds of tools to help manage, basically, that filter process that brings new customers into their business. 

And these guys are growing like crazy. They currently have over 41,000 customers that have signed on to their platform, and the average customer spends over $10,000 per year with HubSpot, so that translated into about $375 million in revenue last year. So, these guys are just growing like crazy, and companies everywhere are really signing onto their platform.

Lewis: And that growth comes at a price, and we’ll see that with all these companies we talk about. I think they’re a roughly $4.5 billion company right now. So, you think about that, that’s a little bit more than 10X sales.

Feroldi: Yes.

Lewis: And that’s what you’re going to pay for these very scalable businesses that are growing very quickly.

Feroldi: Absolutely. And these guys are growing like mad, and they’re absolutely in build-out mode. HubSpot only recently became profitable and cash flow positive because they were investing everything that they earned back into the business to scale out their platform. But, I’m personally interested in this business because they are free cash flow positive, so, they’re no longer consuming cash at the rate that they once were. Their co-founders are still highly involved in the business. In fact, they’re the CEO and CTO. Their company culture just gets rave reviews on review sites like glassdoor.com. 

And while they’ve already grown like mad, and investors have already done very well by buying into the company after the IPO, the company thinks that its total addressable market is about $45 billion annually. You compare that to the $375 million that they pulled in last year and the tailwinds that they’re riding, and I think this business can grow very, very quickly for years to come.