Welcome to the midway point for the 2018 Best Stocks contest!
While there has been some jostling in the ranks, the leader at the end of the first quarter has held onto its lead, putting together an incredible gain so far in 2018. Meanwhile, all but two of the contestants are outpacing the SPDR S&P 500 ETF (NYSEARCA:SPY) so far, many by a significant margin.
With tariffs going into effect, it’s hard to know exactly what’s going to happen going forward. But so far, investors would have been happy with most of these stocks in their portfolios this year.
So without further ado, here are the 10 Best Stocks for 2018 entries, in ascending order by their year-to-date returns through the end of the second quarter
Best Stocks for 2018 No.10: Market Vectors Rare Earth ETF (REMX)
Source: fdecomite via Flickr
Year-to-Date Change Through Q2: -23%
Investors: John Jagerson and Wade Hansen
Sometimes all the solid fundamentals in the world just can’t help a company when sentiment on Wall Street turns against it. And that has been the case for Vaneck Vectors Rare Earth Strategic Metals ETF (NYSEARCA:REMX) so far in 2018.
It’s not like REMX’s products are not in demand, and the business hasn’t suddenly started spending wildly or anything. The markets just aren’t willing to put their money in the companies that make up REMX right now. As John Jagerson and Wade Hansen said in their article, “Traders don’t feel like they can accurately forecast growth rates in this uncertain global economic environment, so many are simply taking profits off the table and reducing their exposure to the market.”
That could always change, but so far, 2018 just hasn’t been kind to REMX.
Best Stocks for 2018 No.9: Smucker (SJM)
YTD Change: -12%
Investor: Hilary Kramer
Poor J M Smucker (NYSE:SJM). It just can’t seem to get things going in the right direction this year. The stock took a hit on an earnings miss on June 7, and while it has actually climbed back above where it was before that bomb, the stock remains firmly in negative territory for the year.
James Brumley also posits that part of its problem is that it has been left out of a spate of recent M&A activity in its space.
Can Smucker turn things around for the contest? It just doesn’t seem to have any particular tailwinds that can give it the boost it needs. It’s not over until the fat lady sings, but SJM stock has one heck of a mountain to climb right now.
Best Stocks for 2018 No.8: Enterprise Products Partners (EPD)
Source: Bilfinger via Flickr
YTD Change: 8%
Investor: Charles Sizemore
At the end of the first quarter, Enterprise Products Partners (NYSE:EPD) was in second-to-last place with a -6.2% drop. So while eighth place is still a fair way back from first place, it has had a considerably stronger second quarter.
Is the distance between first and eighth too large to bridge? It’s too early to say for sure, but even if it is, Sizemore writes, “regardless of what happens with the rest of the contestants for the remainder of 2018, I expect Enterprise Products to be one of the best performers in the second half. Total returns of well over 20% this year should be achievable.”
Best Stocks for 2018 No.7: Mosaic (MOS)
YTD Change: 10%
Investor: Charles Payne
Mosaic Co (NYSE:MOS) also picked up steam in the second quarter, slipping from a 5% drop in the first quarter to a 10% gain at the midway point.
This crop nutrition company is helping the world’s increasing population stay fed with its products, as the world’s leading producer of concentrated phosphate and potash.
Will the good times continue? As Payne wrote, “For the next quarter, analysts are calling for earnings of 39-cents-per-share on a 34.5% jump in revenue to $2.36 billion. Overall, the company has a good history of beating estimates, so I don’t expect the upcoming results to disappoint, especially since phosphate and potash prices are rebounding and continue to have significant upside driven by large demand.”
It sounds like another surge could be in the offing for MOS stock.
Best Stocks for 2018 No.6: Nvidia (NVDA)
YTD Change: 23%
Investor: Louis Navellier
Some people felt like Nvidia (NASDAQ:NVDA) may have used all of its upward momentum in 2017. Louis Navellier didn’t though, and so far he has been right on the money.
The thing is, NVDA has its fingers in a whole bunch of pies. AI, self-driving cars, the internet of things … it has kept pushing into new trends, setting itself up for even more growth.
“And NVDA has not only kept up with all these advancements, but it has found a way to be a dominant player in all of them,” Navellier wrote. “It has positioned itself so that it is leveraged to growth in every major tech growth megatrend around.”
The front-runners may need to keep an eye on NVDA in the second half.
Best Stocks for 2018 No.5: Broadridge (BR)
YTD Change: 29%
Investor: Matt McCall
In fifth place is financial services company Broadridge Financial Solutions (NYSE:BR). And this isn’t your father’s finance stock. As McCall put it:
“Through its technology, Broadridge Financial Solutions (NYSE:BR) provides investor communications and other solutions to the financial sector. It’s actually one of the pioneers in its industry and stands to be a huge beneficiary as blockchain — the technology behind cryptocurrencies — changes the way financial business is conducted.”
Blockchain has the potential to make vast changes in the finance landscape, and Broadridge has positioned itself at the forefront.
Will that be enough to push it higher in the contest rankings by the end of the year?
Best Stocks for 2018 No.4: Amazon (AMZN)
YTD Change: 45%
Investor: Readers’ Choice
At this point, is anyone surprised to see Amazon (NASDAQ:AMZN) doing well in the Best Stocks contest? Even regular headline troubles can’t seem to put a serious dent in this juggernaut.
Meanwhile, Amazon just keeps trying new things. Most recently, Amazon announced its intent to buy Pillpack, an internet pharmacy startup, for about $1 billion. This move into the pharmacy space is turning heads yet again.
All in all, “It’s starting to feel like nothing can keep AMZN stock down, even as the S&P 500 falls back down to around breakeven on the year. ”
Best Stocks for 2018 No. 3: Chipotle (CMG)
YTD Change: 49%
Investor: Kyle Woodley
Chipotle (NYSE:CMG) may never get back to the rarefied air of its 2015 highs, but after hitting a low below $250, CMG stock has made a strong move back to the upside.
There was a small hiccup right at the end of June — well, a -9% hiccup, to be more precise. That came on the heels of a press release from the company outlining its growth plans going forward. News of the company closing up to 65 stores in coming quarters, including all of its Pizzeria Locale locations outside of Denver, apparently didn’t inspire confidence.
But even with that drop, CMG is outpacing most of the market. Unfortunately, two of those companies that are doing even better got picked for this contest.
Best Stocks for 2018 No.2: Twitter (TWTR)
YTD Change: 82%
Investor: Jason Moser
After investors began to doubt the staying power and growth potential of Twitter (NYSE:TWTR), the company made some changes — and it seems like those changes are paying off.
Revenue rose 21% from a year ago to $665 million. TWTR reported its second consecutive GAAP-profitable quarter, hitting 8-cents-per-share. But those aren’t the only numbers that matter.
“A metric that won’t garner as much attention — but should, given that it’s been (rightly) held against Twitter for so long — is that stock-based compensation as a percentage of revenue for the quarter of 11% was down from 21% a year ago,” wrote Moser. “This is management keeping their word, and it matters.”
But perhaps the biggest surprise is that an 82% gain over the first half of 2018 is only good for second in the Best Stocks contest.
Best Stocks for 2018 No. 1: Etsy (ETSY)
YTD Change: 106%
Investor: Tracey Ryniec
Etsy (NASDAQ:ETSY) took off strong in the first quarter, and has yet to look back. The online shop for handmade goods has a strong position as a leader in that particular niche. As Ryniec says, “Etsy continues to cash in on the power of its platform. It’s the oldest of the artist online marketplaces and despite the chaos of the last few years, it never lost favor with its sellers.”
Moreover, Etsy is enacting a strong turnaround plan. As a result of that (and helped by the platform raising its transaction fees and beginning to offer subscription services), expectations are for solid growth going forward. All in all, ETSY may be in a perfect position to hold onto its commanding lead.
As of this writing, Jessica Loder did not hold a position in any of the aforementioned securities.
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