We’re in the home stretch. There are less than three trading weeks left in 2018, and while this has historically been a bullish time of year, a turbulent and mostly bearish November has prompted even the most confident of investors to question whether this is a time to find stocks to buy or a time to steer clear of the market.
Good news if you’re still not clear on what plausibly lies ahead — there are some names that look too juicy to pass up right now no matter what the broad market’s got in store.
To that end, here’s a rundown of some of the best stocks to buy sooner rather than later. Some are far more oversold than is merited, and others somehow resisted most of the marketwide weakness. In all cases though, these are stocks that could end the year strong, and maybe even get 2019 started on the tight foot.
At a time when other social networking sites like Facebook (NASDAQ:FB) are struggling to figure out their place in the foreseeable future, Twitter (NYSE:TWTR) is enjoying the fact that it has just recently figured out what it is and how to sell itself. Revenue is on pace to improve nearly 23% this year, driving per-share profits from last year’s 44 cents to 80 cents. The pros are calling for sales growth of nearly 14% next year, though, which should drive the bottom line up to 89 cents per share of TWTR stock.
The trading crowd hasn’t exactly priced Twitter shares like the growth machine it is. However, with Tuesday’s cross back above a 200-day moving average line (green) that had been acting as a ceiling, Twitter’s long-term uptrend appears rekindled.
Aqua America (WTR)
What could be more boring than a water utility stock? Not much. But, there are few stocks that are as consistent in terms of forward progress as Aqua America (NYSE:WTR), which is pretty exciting in its own right.
The chart speaks for itself. WTR stock has been in a well-defined uptrend since 2010, guided by a support line (dashed) that tags all the major lows for the eight-year stretch. Aqua America just pushed up and off of that line too, so there’s some life left in this upturn.
Fun fact: The average price of a gallon of water supplied by water utility companies in the United States has risen by more than the prevailing inflation rate every year going all the way back to 2010. These companies are in effect legal monopolies.
Verint Systems (VRNT)
Software company Verint Systems (NASDAQ:VRNT) isn’t exactly a household name. With a market cap of around $3 billion, the company just doesn’t turn many heads.
Nevertheless, it’s a stock with some upside, much of which looks like it could be tapped into in the very near future. Though it ebbs and flows like any other equity, the bigger-picture trend is a bullish one, ultimately driven by steady sales and earnings growth.
Morningstar analyst Brian Colello made a convincing case for VRNT stock earlier in the month, noting “The complexity of Verint’s products … offers value-add services for the firm’s client base. Quantitatively, this manifests itself in over 90% retention, a figure we believe is impressive amid customers converting away from legacy license/maintenance agreements and toward subscription-oriented solutions.”
Intercept Pharmaceuticals (ICPT)
Intercept Pharmaceuticals (NASDAQ:ICPT) is another off-the-radar small name, but again, don’t let its modest $3.4 billion market cap fool you. Also don’t let the string of operating losses — past and projected — fool you. The biopharma is making fast progress with its top and bottom lines, with this year’s projected per-share loss of $10.40 expected to shrink to a loss of only $8.42 per share next year on the heels of 44% sales growth.
For biotech stocks, the right trajectory can be just as powerful as profitability.
Intercept Pharmaceuticals’ claim to fame is a drug called Ocaliva, for the treatment of a rare liver condition called primary biliary cholangitis, or PBC. That indication alone is driving solid growth, but Ocaliva’s underlying Farnesoid X receptor (FXR) biotechnology has potential as a therapy for several other conditions Intercept is currently targeting in clinical trials.
Dominion Energy (D)
In retrospect, it’s not entirely clear why shares of utility company Dominion Energy (NYSE:D) were hit so hard earlier in the year. Yes, the palpable threat of rising interest rates posed a problem for the dividend-driving stock. But, the 25% drubbing was excessive.
Whatever the case, the market now seems to recognize it overreacted. D stock has bounced back from a June low near $60 to its current price near $76. Perhaps more important as we head into the heart of December, has hurdled a resistance level developing around $73.80.
Newcomers will step into Dominion shares at a still-healthy dividend yield of 4.4% … a dividend, by the way, that has grown every year for nearly three decades.
Charter Communications (CHTR)
Charter Communications (NASDAQ:CHTR) shares were rocked beginning late last year, and for understandable reason. That’s when the so-called cord-cutting movement reached a critical mass and the cable television provider came face-to-face with the reality that it wasn’t as well-equipped as it needed to be to fight that fight.
Charter isn’t as dead in the water as the market is making it out to be, however.
Unlike most of its peers, Charter isn’t aiming to become the messenger and the media. If anything, it’s tightening its focus on building the best connection-making company it can be, and is letting its rivals fight for dominance of a content market that could eventually be a commodity. Investors are slowly but surely starting to see the value of Charter’s focus, but only after the sellers overshot their target.
Keysight Technologies (KEYS)
When investors look for good ways to tap into the coming 5G evolution, Keysight Technologies (NYSE:KEYS) usually isn’t one of them. But, maybe it should be. The company’s scientific and measurement equipment is crucial to the advancement of many types of technologies, especially 5G connection tech. Indeed, its 5G Conformance Toolset is the first test solution is the first to be certified by the PTCRB, which is a consortium of North American cellular service providers.
There’s an even bigger, better reason KEYS stock has earned a spot on a list of the best stocks to buy before 2018 winds down, however. That is, its fiscal-fourth-quarter earnings beat may well mark the beginning of the 17% improvement in earnings projected for the current year, followed by next year’s expected 12% increase.
The stock’s lull since September shouldn’t last much longer, with KEYS stock now finding support at its 200-day moving average line (green).
Yes, Apple (NASDAQ:AAPL) is finally seeing sales of its flagship iPhone slow down. But, even on its worst day, Apple is still a more potent investment than most other stocks on their best days.
It’s a detail too many traders have forgotten since early October. AAPL stock is, in fact, technically in its own bear market, having falling 27% in just the past couple of months after shareholders were hit with the unexpected news that it would no longer be divulging unit sales of its hardware.
It simply doesn’t matter as much as the market has priced it in. The company has been planning on this day for a while, transitioning from a hardware outfit to an apps and services-focused entity for the past couple of years. It’s a shift that’s working, even if few can see it yet.
Shares of Broadcom (NASDAQ:AVGO) has been drifting lower since late last year, with most of that weakness resulting from thwarted plans to acquire Qualcomm (NASDAQ:QCOM), and a relatively strange decision to buy software name CA. More software dealmaking is supposed to be in the cards for the hardware and component company.
What has largely been lost in the recent M&A tussling is that, with or without all the dealmaking, Broadcom is still growing its top and bottom lines quite nicely.
The kicker: Though 2018 has been a tough year for the stock, AVGO shares have bolted higher this week after logging a higher low following July’s bottom. The tide appears to have already turned for the better.
Last but not least, add CSX (NASDAQ:CSX) to your list of the best stocks to buy if you want a shot at finishing 2018 on a high note.
Yes, this is the same CSX that operates a network of railroad lines. It’s a business that had been struggling with the implosion of oil and coal prices, as well as general economic malaise. This year has been a solid one for the industry though, with economic activity and commodity prices both perking up. In fact, this year’s rail traffic in Canada and the United States is heavier than it’s been in the past four.
CSX has been enjoying its fair share of that prosperity, and then some. A relatively modest improvement in this year’s revenue is leading to a 66% increase in per-share earnings, and analysts are calling for bottom-line growth of 11% next year. Thing is, CSX is in the habit of handily topping estimates … something investors appear to have forgotten since October.
As of this writing, James Brumley held long positions in Broadcom, Intercept Pharmaceuticals and Aqua America. You can follow him on Twitter, at @jbrumley.
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