U.S. Markets closed

Stock Market Power Rankings: Dreaming of an Amazon Christmas

Rick Munarriz, The Motley Fool

Each week, I'm ranking the biggest companies that trade on U.S. exchanges based on their size (market capitalization), momentum (total return over the past year), and recent news. Before we get to the rankings, a quick word on a major player.

Christmas has come and gone, and once again we saw Amazon.com (NASDAQ: AMZN) dominating the shopping channels. The leading online retailer issued a press release the day after Christmas, singing its own praises during the busy holiday season. 

Amazon's post-Christmas press releases rarely offer quantifiable nuggets of growth. Investors will have to wait until late January to find out the actual percentage growth the dot-com darling mustered during the seasonally potent fourth quarter. However, Amazon did tell us it sold millions more Amazon devices than it did a year earlier. 

It was also apparently a big season for the Alexa digital assistant platform. Amazon points out that Alexa delivered eight times as many reminders this holiday season as last year, a testament to both the growing audience of customers with Alexa-fueled devices and developers who are making the platform more sticky.   

With that in mind, let's review this week's updated list of 50 top large-cap stocks, kicking things off with the top 10.

Bull and bear in marble squaring off against one another.

Image source: Getty Images.

This week's top 10 stocks

10. Facebook (NASDAQ: FB): $382.8 billion market cap, down 25.1% over the past year.

There's a surprising bull for the out-of-favor social networking giant. Andrew Left at Citron Research is calling Facebook his S&P 500 stock of the year for 2019, high praise coming from someone who usually makes waves when he's bashing a company. Left argues that the scandal-riddled dot-com is still growing. His price target of $160 suggests 20% of upside for a stock that's shed a lot more than that over the past year. 

9. JPMorgan Chase (NYSE: JPM) (down from 8): $322 billion, down 10.2%.

JPMorgan Chase has had to make a lot of withdrawals this past week. It announced on Wednesday that it will pay $135 million to settle charges of improper handling of pre-released American depositary receipts (ADRs). Turns out the company was issuing shares before it had the foreign shares required to support the new ADRs. Later in the week, Bloomberg reported that Hong Kong regulators were fining JPMorgan Chase $1.6 million for failing to keep up with anti-money laundering and counter-terrorist financing laws. 

8. Johnson & Johnson (NYSE: JNJ): $341.3 billion, down 9.5%.

The pharmaceuticals and consumer-goods giant has fallen lately on claims that its baby powder contained unacceptable levels of asbestos, and at least one financial publication thinks the stock is due to bounce back. Barron's argued last weekend that the sell-off was overdone, even if the conclusion is that there are more deeply discounted healthcare stocks for investors to go after at this point. The stock declined slightly over the past week, so it seems the market disagrees about an overdone sell-off.

7. Pfizer (NYSE: PFE) (up from 9): $248.3 billion, up 18.1%.

Bucking the trend at Johnson & Johnson, Pfizer shares inched higher for the week. There continues to be a flight to quality when it comes to pharmaceutical giants, and Pfizer is one of the beneficiaries of that trend. There are a dozen stocks commanding greater market caps than Pfizer, but it continues to make the cut in the top 10 with its double-digit percentage return over the past year.

6. Visa (NYSE: V): $288.6 billion, up 14.5%.

The leading credit card company is doing some year-end shopping. A Visa subsidiary has agreed to pay roughly $250 million for Earthport, a Europe-based provider of cross-border payment services to banks and businesses. 

5. Berkshire Hathaway (NYSE: BRK-A): $497.2 billion, up 1.1%.

Berkshire Hathaway's market cap continues to clock in below $500 billion, and with nearly $100 billion in cash on its balance sheet, one has to wonder if Warren Buffett will be a buyer in early 2019. The opportunities are there, particularly for the financial services companies that have become a staple of Berkshire Hathaway's stock portfolio.    

4. Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL): $724.6 billion, down 0.9%.

Google parent Alphabet has never found its way into the top three in this weekly list. The same three names have been jockeying around for position, with Alphabet settling for fourth or fifth place. But that may be starting to change. Alphabet's market cap passed Amazon's this past week, and its performance has held up better than Apple. The gap is closing between Alphabet and the Big Three. 

3. Apple (NASDAQ: AAPL): $741.4 billion, down 8.7%.

There's an iPhone problem at Apple, which is a big deal since the iconic smartphone accounts for the lion's share of its business. Apple has responded to sluggish sales for its new iPhone XS and XR models by rolling out a promotional upgrade program for stateside customers, and now it's apparently expanding the offer overseas. Wall Street is paying attention. Citi is the latest to hose down its forecast for Apple's iPhone production, slashing its target for the current quarter by 5 million devices. 

2. Amazon.com: 722.7 billion, up 24.6%.

We already know Amazon did a lot of selling this season, but it also seems the leading online retailer may be working on a buying spree of its own. The Wall Street Journal reports that Amazon may be bidding on YES, the Yankee Entertainment Sports Network that serves as the regional sports broadcaster for New York Yankees and Brooklyn Nets games. Another report argues that Amazon could make a play for Henry Schein (NASDAQ: HSIC), now that the dental-products distributor has unloaded its animal-health business. Either play may seem outlandish at first glance, but Amazon has a history of making unexpected moves. 

1. Microsoft (NASDAQ: MSFT): $770.7 billion, up 17.1%.

The final ranking of 2018 finds Microsoft still on top. It commands a much larger market cap than Apple, and unlike Apple it has also beaten the market over the past year. The software giant is positioned nicely as we head into 2019, but no company can stay on top forever. So far over the past two months, we saw Apple and Amazon on top before Microsoft claimed the pole position.  

The rank and file

We'll get to No. 11 through No. 50 in a moment, but first, let's look at some other Top 50 stocks that are making waves, for better or worse.

Wells Fargo (NYSE: WFC) is hoping to put an ugly chapter to rest. The banking giant announced on Friday that it will pay $575 million to settle civil cases with all 50 state attorneys general. Wells Fargo was cited for aggressive sales practices in which employees were encouraged to open new accounts that existing clients never requested. Wells Fargo's reputation has taken a hit in the past couple of years, but it's hoping to get back on track. As part of the settlement, Wells Fargo will maintain designated teams to review customer inquiries and offer existing remediation efforts online. 

Stocks 11 through 50

11. Merck & Co. (NYSE: MRK): $196 billion, up 33.2%.

12. UnitedHealth Group (NYSE: UNH): $236.9 billion, up 10.5%.

12. Alibaba (NYSE: BABA): $357.7 billion market cap, down 19.3%.

13. Verizon (NYSE: VZ): $228.4 billion market cap, up 3.4%.

15. Mastercard (NYSE: MA): $192.3 billion, up 22.7%.

16. Cisco (NASDAQ: CSCO): $192.3 billion, up 10.8%.

17. ExxonMobil (NYSE: XOM): $288.6 billion, down 18.9%.

18. Walmart (NYSE: WMT): $267.7 billion, down 7.3%.

19. Procter & Gamble (NYSE: PG): $227.2 billion, down 1%.

20. Intel (NASDAQ: INTC): $213.4 billion, up 1.2%.

21. Coca-Cola (NYSE: KO): $200.9 billion, up 3.2%

22. Boeing (NYSE: BA): $179.7 billion, up 6.8%.

23. Netflix (NASDAQ: NFLX): $111.7 billion, up 32.9%.

24. Royal Dutch Shell (NYSE: RDS-A): $240.3 billion, down 8.2%.

25. Novartis (NYSE: NOV): $197.3 billion, up 1.6%.

26. Bank of America (NYSE: BAC): $239.4 billion, down 18.2%.

27. Walt Disney (NYSE: DIS): $159.7 billion, down 0.4%.

28. Chevron (NYSE: CVX): $207.6 billion, down 13.5%.

29. Home Depot (NYSE: HD): $192.3 billion, down 10.3%.

30. PetroChina (NYSE: PTR): $182.7 billion, down 12.2%.

31. Wells Fargo (NYSE: WFC): $215.5 billion, down 25.3%.

32. PepsiCo (NASDAQ: PEP): $155.8 billion, down 7.5%.

33. McDonald's (NYSE: MCD): $135.3 billion, up 1.4%.

34. Oracle (NYSE: ORCL): $160.9 billion, down 5.7%. 

35. Eli Lilly (NYSE: LLY): $112.2 billion, up 34.3%.

36. Adobe (NASDAQ: ADBE): $108.9 billion, up 27.1%.

37. Abbott Laboratories (NYSE: ABT): $124.9 billion, up 23.7%.

38. BHP Billiton (NYSE: BHP): $120.9 billion, up 15%.

39. China Mobile (NYSE: CHL): $193.2 billion, down 5.5%.

40. Nike (NYSE: NKE): $116.5 billion, up 16.5%.

41. Salesforce.com (NYSE: CRM): $103.0 billion, up 31%.

42. Medtronic (NYSE: MDT): $119.9 billion, up 9.7%.

43. Amgen (NASDAQ: AMGN): $121.5 billion, up 8.8%.

44. Union Pacific (NYSE: UNP): $105 billion, up 10.4%.

45. AstraZeneca (NYSE: AZN): $94.1 billion, up 17.1%

46. Taiwan Semiconductor (NYSE: TSM): $191.1 billion, down 0.2%.

47. AT&T (NYSE: T): $207.1 billion, down 27.4%.

48. Petrobras (NYSE: PBR): $81.4 billion, up 39.8%.

49. PayPal Holdings (NASDAQ: PYPL): $98.1 billion, up 12.3%.

50. Unilever (NYSE: UL): $136.8 billion, up 0%.

Who's in and who's out

Our on-again, off-again relationship with PayPal is on again. The tech-savvy transactions enabler jumps back on the list after a strong week that pushes its 52-week return back into the double digits.

Comcast (NASDAQ: CMCSA) is the stock bowing out to make room for PayPal's return. Comcast has been a fixture in our ranked list since its inception, but with the market cap slipping and its trailing-year return down 14.7%, it was going to be hard for Comcast and its $156 billion market cap to stay on the list. 

Comcast's flagship cable television business is actually holding up well in recent quarters relative to other cord-cutting casualties. Comcast also has a vibrant theme-parks business, and its NBC/Universal content is serving it well. The stock has just fallen out of favor with investors lately, and with that it bows out of our list, for now. 

One to watch

IBM (NYSE: IBM) is one of the largest companies not making the cut, largely because the stock has taken a nearly 27% hit over the past year. Years ago, IBM was the bluest of the blue chips, but these days Big Blue is earning its colorful moniker for a more solemn reason.

IBM isn't an investor favorite. The company became a market darling decades ago for its tech edge and then thrived through most of the past few years for its business services, but now it's hit a rough patch. Revenue has declined slightly for six consecutive years, and the stock has shed nearly half of its value since peaking in early 2013.

There are a few reasons to still believe in IBM. It's finally starting to get back on track, growing its revenue slightly this year. It's also topped Wall Street profit targets through the first three quarters of 2018. Income investors should also be tempted by IBM's juicy 5.5% yield.

There aren't a lot of catalysts pointing to a turnaround at IBM, but bottoming out is acceptable at this point. The stock can be had for just eight times the new year's projected earnings, and that makes it too cheap to ignore.  

More From The Motley Fool

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Rick Munarriz owns shares of Apple, AT&T, China Mobile, Netflix, and Walt Disney. The Motley Fool owns shares of and recommends Adobe Systems, Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Facebook, Mastercard, National Oilwell Varco, Netflix, PayPal Holdings, Salesforce.com, and Walt Disney. The Motley Fool owns shares of Johnson & Johnson, Medtronic, Oracle, and Visa and has the following options: long January 2020 $150 calls on Apple, short January 2020 $155 calls on Apple, short February 2019 $185 calls on Home Depot, long January 2020 $110 calls on Home Depot, short January 2019 $140 calls on Johnson & Johnson, long January 2020 $30 calls on Oracle, and short January 2019 $82 calls on PayPal Holdings. The Motley Fool recommends Amgen, Comcast, Home Depot, Nike, Union Pacific, UnitedHealth Group, and Verizon Communications. The Motley Fool has a disclosure policy.