Market value: $27.5 billion
EA, $92.73) shares tried to snap out of Q4 2018's steep diver earlier this year, but the effort failed by mid-February. Worse, EA has lost a third of its value over the past 12 months." data-reactid="213">Electronic Arts (
EA, $92.73) shares tried to snap out of Q4 2018's steep diver earlier this year, but the effort failed by mid-February. Worse, EA has lost a third of its value over the past 12 months.
The punishment is understandable but overdone. Between a couple of disappointing quarterly reports, the surprising rise of hit indie game Fortnite and delays of the release of its own Battlefield V, investors simply didn't find enough to like.
However, EA might be one of the best stocks to buy for the rest of 2019 ... and potentially much further down the road.
Jeff Bilsky, portfolio manager and senior analyst for the large-cap equity investment team at Chartwell Investment Partners, doesn't think the foreseeable future is going to look like the recent past, however.
The key is EA's updated portfolio of games, and how they're sold. "The majority of EA's revenue is derived from its FIFA and Madden franchises, but it has significant upside with the recent release of Fortnite competitor Apex Legends," he says. "Long-term, EA should also benefit from a greater shift to digital downloads (which comes with much higher margins) after the console upgrade cycle next year, increasing in-game purchases, and the growing popularity of eSports."
Bilsky thinks the upshot of the company's recent development work is already materializing, saying, "The company gave revenue guidance for the game of $300 million to $400 million for the fiscal year, but this could be conservative given its already generated around $200 million in the first quarter and Fortnite earned an estimated $2.4 billion in revenue last year."
Market value: $12.7 billion
isn't a household name, but the logistics outfit would be a nice addition for many households' portfolios." data-reactid="223">Expeditors International ( EXPD, $73.97) isn't a household name, but the logistics outfit would be a nice addition for many households' portfolios.
FDX) and United Parcel Service (
UPS). The classification doesn't exactly describe all that Expeditors International is, however. In fact, unlike UPS and FedEx, Expeditors International doesn't own any airplanes, ships or trucks. Rather, it has mastered the art of supply chain management through the use of technology. It can find the best routing solutions and most cost-effective pricing options for its customers available via third-party service providers." data-reactid="224">It's categorized as a logistics company, with peers such as FedEx ( FDX) and United Parcel Service ( UPS). The classification doesn't exactly describe all that Expeditors International is, however. In fact, unlike UPS and FedEx, Expeditors International doesn't own any airplanes, ships or trucks. Rather, it has mastered the art of supply chain management through the use of technology. It can find the best routing solutions and most cost-effective pricing options for its customers available via third-party service providers.
The business model works. Although the company's earnings growth hasn't progressed in a perfectly straight trajectory, it has progressed. Trailing-12-month earnings of $3.52 per share were only $2.34 two years ago, and $2.05 per share two years before that. More of the same kind of sales and earnings growth is projected this year and next as well, with analysts modeling a 2020 profit of $3.76 per share.
Illinois Tool Works View photos
Market value: $48.6 billion
ITW, $149.05). The consensus rating on ITW shares is a "Hold" - a glaring lack of confidence from a generally bullish crowd - and the consensus target of $147 is below the stock's present price. This is not a pleasant scenario for current shareholders." data-reactid="247">Wall Street is hardly a huge fan of Illinois Tool Works (
ITW, $149.05). The consensus rating on ITW shares is a "Hold" - a glaring lack of confidence from a generally bullish crowd - and the consensus target of $147 is below the stock's present price. This is not a pleasant scenario for current shareholders.
But analysts' doubt has proven misguided lately. Indeed, beginning in February, shares of Illinois Tool Works not only hit the then-target price of $136, but blew past it en route to a 26% romp.
The rally cooled off, but since appears to have been rekindled, once again defying the doubters. Indeed, analysts' reservations could, for contrarian reasons, fuel a sustained bull run. Because if ITW shares continue to rally as they have of late, the analyst community might be compelled to upgrade their ratings, sending even more buyers into the stock.
Dividend Aristocrat that has been growing its payout for 55 years and running - certainly doing its part. While far from explosive, last year's bottom line of $7.60 per share is projected to reach $7.92 per share this year, and then to $8.44 in 2020." data-reactid="250">Illinois Tool Works - a
Dividend Aristocrat that has been growing its payout for 55 years and running - certainly doing its part. While far from explosive, last year's bottom line of $7.60 per share is projected to reach $7.92 per share this year, and then to $8.44 in 2020. Intuitive Surgical
Market value: $57.3 billion
Intuitive Surgical (
ISRG, $496.54) has been an erratic performer since last fall, and understandably so. ISRG missed its first-quarter earnings estimates, and analyst responses were mixed following the post-report plunge.
Raymond James analyst Lawrence Keusch remained steadfast in his bullishness however, calling the pullback a buying opportunity put in place by a misunderstanding of how the company's business model is changing.
Taking a cue from several software and cloud computing outfits, Intuitive Surgical has entered the subscription business. Rather than selling its da Vinci robotic surgical equipment outright, it has begun to lease - the companies uses the term 'place' - some of its products rather than selling them.
The response has been positive. Intuitive Surgical placed 235 systems during the first quarter of the year using this new, alternative financing approach - up 27% from the year-ago period's deliveries. The new business model sacrifices one-time revenue now in exchange for recurring revenue in perpetuity.
Keusch suspects the new model is gaining even more traction than initially suspected, saying about the company's Q1 results, "The net impact of the greater number of leases vs. our assumption was $30M less revenue, or 3.5% y/y growth, implying the top-line would have handily exceeded Street estimates." The Raymond James analyst goes on to tout "ease of upgrade, smoother revenue cadence and standardization on Gen 4-systems/higher instrument mix" as reasons to anticipate more long-term growth than other analysts expect.
still may live up to its billing as one of the best health-care stocks to buy for 2019. John Bean Technologies View photos
Market value: $3.6 billion
Not too unlike the nation's bridges, schools and potable water systems, the United States' airports and related airport-management equipment are aging, in need of repair or outright replacement.
The numbers are big, too. In 2017, $10 billion was earmarked to overhaul JFK International. Chicago's O'Hare secured approval for $8.5 billion worth of upgrades last year. Most airports in the U.S. need at least some degree of improvements and modernization.
JBT, $114.41), which makes everything from airport cargo loaders to boarding gates to airport air-handling hardware." data-reactid="283">It's an opportunity that Richard Mathes, President of New York-based investment advisor The Mathes Company, hasn't overlooked. His pick to plug into the airport spending trend is a rarely considered outfit called John Bean Technologies (
JBT, $114.41), which makes everything from airport cargo loaders to boarding gates to airport air-handling hardware.
The results back up the promise. Rounded out with its food and automated systems business lines, John Bean's revenue has grown every quarter since the beginning of 2014. Five acquisitions have helped muster that growth, but John Bean Technologies picks and integrates its acquisition targets well. Operating income has grown just as impressively, even if not as consistently.
Analysts on average expect revenue growth of roughly 5% next year and per-share profit growth of 12%, extending well-established trends for both measures.
JPMorgan Chase View photos
Market value: $356.2 billion
it doesn't portend a recession, it's a dynamic that makes the business of money-lending a less profitable venture." data-reactid="307">The handful of times we've seen the yield curve invert since March is cause for concern, particularly for banks. Even if
it doesn't portend a recession, it's a dynamic that makes the business of money-lending a less profitable venture.
But this prospect may be more than unnecessarily priced into the value of most banking names. JPMorgan Chase (
JPM, $109.82) is no exception.
explained his bank's resilience in an interview with Barron's: "We have a lot of subscription-like businesses. The volatility of our results is very low over time - surprisingly in businesses like fixed-income trading, where a large chunk of the revenues are consistent year to year ... The macro environment doesn't change anything we do. We invest through the cycle." Wealth management and consumer banking are two particularly consistent business lines." data-reactid="309">JPMorgan CEO Jamie Dimon
explained his bank's resilience in an interview with Barron's: "We have a lot of subscription-like businesses. The volatility of our results is very low over time - surprisingly in businesses like fixed-income trading, where a large chunk of the revenues are consistent year to year ... The macro environment doesn't change anything we do. We invest through the cycle." Wealth management and consumer banking are two particularly consistent business lines.
That resilience hasn't prevented investors from looking at the big bank through bearish-colored lenses. But JPMorgan may end up being one of the best stocks to buy for the rest of 2019 for its contrarian potential.
Barron's contributor Andrew Bary is among a few observers who believe the current interest-rate worries may ultimately serve as an entry opportunity, recently penning "Just as the stock market was unduly optimistic about JPMorgan and the group before the financial crisis, it's inappropriately pessimistic now."
Newcomers to JPM will also enjoy a dividend yield of roughly 3%, if they step in now.
Lockheed Martin View photos
Market value: $98.9 billion
It remains to be seen if Raytheon (
RTN) and United Technologies ( UTX) will be allowed to merge. But if they are, the change could prove distracting and disruptive. It also opens the door to other defense companies becoming more superior stock picks in the space.
Daniel Milan and Matthew Essmann, managing partners of Michigan-based Cornerstone Financial Services, now see Lockheed Martin (
LMT, $350.14) as a top name in aerospace and defense.
Lockheed Martin is "taking a leadership position in future, next-gen aerial systems like hypersonic strike weapons, laser weapon systems, autonomy and artificial intelligence, which could lead to future revenue growth," Milan says. He continues, "Their largest program is the F-35 stealth fighter jet and LMT recently issued a bullish forecast for the F-35 sales."
"Lockheed Martin has shown much improved earnings growth over the last five quarters - at least 30% each quarter - and raised its full-year guidance in April," Milan says. Analysts are on board with the company's optimistic outlook, too. As a whole, they expect earnings of $20.56 per share this year, up 17% from last year's $17.59. Then in 2020, they see another 21% leap to $24.89 per share.
including a very underfunded pension plan. But that doesn't keep LMT from being among the best stocks to buy for the rest of this year." data-reactid="337">Lockheed has issues, sure,
including a very underfunded pension plan. But that doesn't keep LMT from being among the best stocks to buy for the rest of this year. Masimo View photos
Market value: $7.5 billion
MASI, $141.08). That's fine - just don't be fooled by its obscurity. Its shares are up more than 500% over the past five years." data-reactid="359">You probably haven't heard of $7.5 billion medical technology outfit Masimo (
MASI, $141.08). That's fine - just don't be fooled by its obscurity. Its shares are up more than 500% over the past five years.
Matt Litfin, Columbia Acorn Fund's lead portfolio manager, believes there's more upside in store.
"Smart R&D investments over the last several years are just beginning to drive very profitable growth," Litfin says. "Masimo has recently released a slate of new hospital automation solutions that directly address critical needs of the health care system such as the ballooning cost of care, the nursing shortage and the opioid crisis."
Masimo's claim to fame is its Signal Extraction Technology (SET) pulse oximetry, which serves as the basis for its cutting-edge blood oxygen saturation and pulse-rate monitoring equipment.
Litfin says about the hardware, "Masimo's far superior pulse oximetry, a test to monitor blood oxygen levels, and other proprietary non-invasive vital parameters are transforming the way patient vital signs are monitored in the hospital and the home."
Its pulse oximetry wares are, in fact, the preferred technology used in most of America's top hospitals. Analysts believe the hospital market will continue buying up this hardware, too, driving 7% sales growth this year and accelerating its top-line growth to the tune of 10% in 2020.
Nokia View photos
Market value: $27.5 billion
The promise of 5G connectivity is finally becoming a reality, with commercial use of the ultra-high wireless technology already beginning. We're just scratching the surface; it's only available in roughly a couple dozen American cities. The bulk of the market as well as its consumers have yet to tap into the game-changing wireless service.
This budding ramp-up in 5G adoption - which should lead to $700 billion worth of annual global spending by 2025 -leads Jack Murphy, CIO of New York-based asset management firm Levin Easterly, to Nokia (
"We believe Nokia will show continued improved execution in future earnings reports, especially with regard to the profile of the upcoming 5G cycle and improved cash flow from operations," Murphy says of the organization that offers an end-to-end lineup of solutions, including the software and services needed to keep 5G connections up and running.
Nokia has the fiscal wherewithal to holds its place as a 5G leader and deliver value to shareholders, too. "Nokia's balance sheet should continue to support a high degree of stock repurchase, supplemented by further restructuring," Murphy says.
Market value: $136.5 billion
The rise of Square (
SQ), the development of a payment app from Apple ( AAPL) and even an entry into the money-transfer business by Facebook ( FB) are just a small sampling of available options for digitally delivering cash. There are few barriers to entry in the business. A countless number of players are capitalizing on the chance to enter a payment market that Research and Markets expects to be worth $168 billion by 2026.
PYPL, $116.17)." data-reactid="411">But sometimes the best-established player in the business also is the top stock to buy. In this arena, that's PayPal (
"We believe PayPal is a structural winner in the payment processing sector," notes William O'Neil + Co. executive director and analyst Dean Kim, adding "PayPal has a strong hold in mobile and e-commerce with over 270 million active users and 22 million merchants."
The next big growth driver has already presented itself too, in Venmo. Kim explains, "PayPal has also successfully grown its reach to millennials via its Venmo platform, which processed $21 billion in transaction volume out of the total $161 billion in just the first quarter of this year."
Bottom line? "We believe PayPal will continue to maintain its outpaced growth for years to come on the back of continuing global shift to digital forms of payments from physical cash," Kim says.
Courtesy Prudential Financial
Market value: $40.3 billion
Prudential Financial (
PRU, $99.23) has been a subpar performer since early 2018, with fears of stagnant or even falling interest rates prompting traders to steer clear of rate-sensitive areas such as insurers. But those fears ultimately might serve as the basis of a buying opportunity, for three reasons.
Chief among those is that, despite all the dire speculations, the U.S. and global economies have remained robust enough to at least allow the Federal Reserve to stand pat with its benchmark rate. We've seen the yield curve invert - albeit in a shallow way - this year when the bond market drove long-term bond and mortgage rates down. But in retrospect, the inversions are suspect mostly because they were prompted by excessive demand for U.S.-issued paper with stronger rates than what's available in other parts of the world.
The second reason? Results, past and projected. Whatever headwinds might have taken shape and may take shape in the future, it has yet to meaningfully impact Prudential's results. While revenue is projected to fall a couple of percentage points this year, earnings are on pace to grow nearly 9%. Next year's expected 4% growth in sales should drive another 9% improvement in profits.
And third, Prudential is hardly just an insurer. It also offers investments, pension management, annuities, structured settlements and more. As such, the company isn't as much of an interest-rate liability as it's often assumed to be.
Market value: $50.5 billion
NOW, $272.25) shares may be up more than 50% year-to-date, but this might be the rare case where a rapid advance is poised to become even more impressive.
ServiceNow offers companies a way of automating computer processes that otherwise must be done manually, or not at all. It's more than just a set of scripts. There's a predictive and programmed, intuitive element to it. ServiceNow can address needs ranging from IT to human resources to customer service and more, even giving its customers a means of developing their own custom-built apps.
ServiceNow's products are clearly in demand too. Analysts see revenues expanding by more than 30% this year; those estimates temper only a bit to 28%, largely the result of a higher comparison bar. On an absolute basis, ServiceNow is still accelerating its top-line growth, which is driving comparably impressive operating-profit growth.
The clincher is reliable and recurring revenue. More than 90% of ServiceNow's sales are subscription-based, and well more than 90% of its customers renew their subscriptions when the time comes.
NOW won't win any value awards, but it's certainly one of the best stocks to buy for the rest of 2019.
Market value: $311.4 billion
Finally, Levin Easterly CIO Jack Murphy says investors should consider stepping into Walmart (
WMT, $109.07) as we move into the latter half of 2019.
"Walmart is the world's biggest retailer, and it's solidly in command of its markets, supply chains and industry trends," Murphy says. While even Walmart itself has lamented the present and future impact of Chinese tariffs, the retailer so far has handily pushed through the big-time trouble they were supposed to cause. Walmart's most recent quarter saw total revenues fall just shy of analyst estimates, but it still grew year-over-year by roughly a percentage point. Per-share profits dipped by about a percentage point but crushed expectations. Most impressively, same-store sales improved by 3.4% - its best comps growth in nine years.
Murphy also is impressed by what's happening outside the company's stores. "What's most significant is Walmart's pivot towards technology and e-commerce," he says, "which can enable it to compete effectively with Amazon."
The web still is a relatively small piece of the organization's total business, but that's changing. Walmart's Q1 e-commerce business ballooned another 37%, maintaining a multiyear streak of strong double-digit growth in its digital marketplace. If an economic headwind is starting to blow, Walmart doesn't look terribly bothered.
James Brumley was long GOOGL and T as of this writing.
Copyright 2019 The Kiplinger Washington Editors
Source : https://finance.yahoo.com/news/19-best-stocks-buy-rest-195955159.html