|Bid||35.13 x 4000|
|Ask||35.14 x 1300|
|Day's Range||34.97 - 35.25|
|52 Week Range||26.80 - 35.44|
|Beta (3Y Monthly)||0.82|
|PE Ratio (TTM)||14.84|
|Forward Dividend & Yield||2.04 (5.77%)|
|1y Target Est||N/A|
Earlier this month, the yield curve inverted. That is, the 10-year treasury bond yield slipped lower than the 2-year bond yield. It’s a switch that spooked the markets, signaling as it does that investors are losing confidence in short term gains and require higher yields to buy shorter term bonds. It’s also a switch that has preceded, sometimes by even a year or more, every recession for the last half-century, and so it brought the dreaded R-word back into investors’ discourse. That’s an article for another day, however.Instead, we’ll focus on a recent comment from Goldman Sachs analyst David Kostin, who in a succinct observation pointed out a more immediate problem and a possible solution for return-minded investors: “With the 10-year Treasury yield at just 1.5% and the Fed likely to cut two more times this year, investors should look for opportunities in dividend stocks.” A move toward high-paying dividend stocks would give investors an alternative to lower bond yields, as well as a cushion against lower share price gains. Goldman has a basket of such stocks.So, for investors interested in faster returns, here are three buy-rated stocks that reliably pay out a high dividend. AT&T, Inc. (T)AT&T has been persistently cheap since the Great Recession of 2008. The stock dropped below $30 per share then, and has been unable to break above $40 ever since. Shares are trading now at $34, with a 2018 PE ratio of 9.07 and an estimated 2020 PE of just 8.72. So not only is it cheap, it’s expected to stay cheap. But is that a realistic forecast?After all, we’re talking about the world’s largest telecom company. It’s the largest landline phone company and largest mobile service provider in the US, and last year purchased WarnerMedia as the foundation for a content-based streaming service scheduled to go online later this year. The stock may be cheap, but the company has enormous assets and plenty of future profit potential.And it is consistently one of the S&P 500’s top dividend payers, with a yield of 5.83% and a current annualized payout of $2.04 per share. The company’s cash flow is net positive, and management has been able to maintain that dividend payout while incurring the debt necessary to acquire WarnerMedia and its content, and cover the interest. It’s an impressive performance.Looking ahead, AT&T appears ready to cash in on its profit potential. 5G is coming, and wireless providers are going to benefit – as the largest such provider in the American market, T is likely to gain proportionately, at least. The same is likely to happen as the streaming sector opens up. With its large body of mobile customers, AT&T has a built-in audience for entertainment streaming via smartphone.The gains may have already begun. 5-star analyst Colby Synesael, from Cowen, looked at T after its recent quarterly earnings release and wrote, “The company is meeting and/or beating revenue and earnings for each segment except International. AT&T is on pace to meet and/or exceed its 2019 guidance.” He raised his price target by 17.6%, to $40. His new PT suggests an upside of 14%, in line with his upbeat outlook.AT&T gets a Strong Buy rating from the analyst consensus, with 7 buys and 2 hold given in recent months. As noted, shares are selling for $34.98. The average price target, $36.14, implies a modest upside potential of 3.3%, but don’t be surprised to see that increase in the near future. This stock is resting on fundamental strengths. Citigroup, Inc. (C) Unlike AT&T above, Citigroup hasn’t been dealing with headwinds lately. In fact, the banking giant has shown consistent growth in revenue and earnings for the last 5 years, while streamlining for efficiency. In 1H19, revenues gained a respectable 4% while net income rose even faster, 13%.At the same time, Citi’s forward PE ratio is only 8.8, and is expected to drop as low as 6.9 by the end of 2021. These numbers, for a globe-spanning banking conglomerate, indicate a stock that is a serious bargain by any standard.With a relatively cheap share price, Citi has been making itself more attractive to investors by a combination of consistent dividend payouts and recent dividend increases. Over the past two years, Citi has boosted its dividend by almost 60%. For investors, that’s a gift, even if it’s not part of Goldman’s dividend basket. Citi shares are now yielding 3.22%, and give an annualized payout of $2.04. This easily beats money market accounts, and if the Fed lowers rates again as expected, the disparity will only make the dividend more attractive.Even better, Citi is well positioned to continue increasing the yield. Despite the recent rate cut and falling bond yields, Citi has seen growth in the core business of deposits and loans, generating cash and float for investment – and dividend payments.Wall Street’s analysts agree that C shares are investment-grade. Last month, Brian Kleinhanzl of KBW upgraded his call on the stock, bumping it to Buy, and raised his price target 16% to $86. More recently, Betsy Graseck from Morgan Stanley and Mike Mayo from Wells Fargo also gave Buy ratings to C, with price targets of $78 and $85.Overall, C has a Strong Buy on the analyst consensus, with 9 recent buy ratings and 1 sell. Shares are trading for $63.91, the average price target is $79.20, and the upside potential is 24%. Kohl’s Corporation (KSS)Kohl’s, the department store chain, reported earnings on Aug 20, and the results showed a somewhat mixed bag. On the negative side, EPS dropped nearly 20 cents from the year-ago quarter and revenues slipped $140 million, to $4.43 billion, over the same period. These were not results to inspire confidence.On the positive side, however, the $1.55 EPS easily beat the $1.52 forecast. So, while earnings were down, they weren’t down as far as feared. Even better, the 2% positive surprise was a welcome reversal from the previous quarter’s 9% EPS miss.The dividend, however, makes this a stock worth paying attention to. Kohl’s is the second-highest yielding stock in Goldman’s dividend growth basket, at 5.82%, and pays out $2.68 per share annually. Again, the story is slightly clouded; while Kohl’s pays out generously, it does not do so consistently, having made just 10 payouts since 2012. Again to the positive side, Kohl’s has been careful to continuously adjust the rate for an increasing payment.KSS is an inconsistent stock, but its earnings are moving in the right direction and the company is confident enough now to restart dividend payments at nearly 6%. In a climate of falling interest rates and bond yields, and an economy that runs on consumer spending, this alone recommends KSS for return-minded investors.Randal Konik, writing from Jefferies, agrees that KSS is worth buying. He cites the company’s strong name recognition, and notes that shares are trading at a discount; the PE ratio is 8.01 now, and only expected to reach 8.65 by 2022. With the low valuation and the current high dividend, Konik sees KSS as a stock with a positive risk/reward balance. He gives it a price target of $75, suggesting an upside potential of 62%.Kohl’s has a Moderate Buy rating from the analyst consensus, with an even split of 5 buys and 5 holds, along with 2 sells. Shares are attractively priced at $46, and the $56 average price target gives the stock a 21% upside.
(Bloomberg Opinion) -- Get ready, TV fans, because the next few months are going to be wild. Apple Inc., AT&T Inc., Netflix Inc. and Walt Disney Co. are spending billions of dollars on so much new streaming content that there will be little reason to leave your couch this winter – or to keep your cable subscription.Apple gave a taste yesterday of what it’s been working on by releasing a trailer for “The Morning Show,” an original series that looks so good it could easily be mistaken for an HBO production. With an all-star cast led by Jennifer Aniston, Reese Witherspoon and Steve Carell, Apple is said to be spending $300 million alone for the first two seasons. The company has committed a whopping $6 billion overall to produce original shows and movies, according to the Financial Times, which would match what Netflix spent in 2017 and would also be in the same ballpark as Amazon.com Inc.’s expected content investment for this year. Other outlets have disputed that Apple’s budget is quite so large. Either way, it’s clear the iPhone maker is serious about streaming. The Apple TV+ and Disney+ video-on-demand apps will both be available by mid-November, followed by AT&T’s HBO Max product. They are game-changers for the pay-TV industry, already littered with live-TV streaming products from Sling TV to YouTube TV.Disney has spent about $15 million per episode to make “The Mandalorian,” a live-action “Star Wars” series that will serve as the flagship of Disney+, according to the Wall Street Journal. That’s about $120 million for the first season, which isn’t far from what Disney shelled out for “Captain Marvel,” the third-biggest movie of the year in terms of U.S. box-office ticket sales. The company expects to invest more than $1 billion in original content for the app next year and another roughly $1 billion for licensed content. These streaming wars are risky. Studio owners generally have a sense of what a TV program could deliver in advertising revenue and how large of a theater audience a film might draw. But Disney+ will charge just $7 a month and contain no ads. The company is betting it can build a large enough customer base so that all these pricey investments that have shareholders wincing right now will pay off some day.In the Apple TV trailer above, Aniston’s character at one point says, “I just need to be able to control the narrative so that I am not written out of it.” It struck me as funny because that’s exactly what Disney and its peers are trying to do as they flood the market with content and turn a blind eye to the cost. Disney predicts it will have 60 million to 90 million Disney+ subscribers globally by the end of fiscal 2024, when the app finally begins making money. Analysts see Apple TV+ topping 100 million in the next five years, according to Bloomberg News. While both are starting from zero, they do have the advantage of strong, far-reaching customer relationships – Disney through its movies and theme parks, and Apple by physically being in most of our pockets already. Netflix is protecting its turf by lighting it on fire. It’s projected to spend about $15 billion for in-house and licensed content this year while burning $3 billion of free cash flow. The company paid $100 million just to keep “Friends” on its platform through 2019. Even though the sitcom hasn’t aired new episodes in more than 15 years, it’s the second-most-watched program on Netflix. After this year, AT&T is reclaiming the rights to the show for its HBO Max product.A little over a year ago, Casey Bloys, HBO’s programming chief, referred to such spending as “irrational exuberance.” But then earlier this year, his boss, HBO Chairman Richard Plepler, left the company in a shake-up by its new parent AT&T. HBO is now ramping up its production slate to reduce churn, or the rate at which bored subscribers are canceling, and HBO Max is reportedly paying $425 million to carry “Friends” for five years starting in 2020. Likewise, the Wall Street Journal reported that Comcast Corp.’s NBCUniversal has its own $500 million five-year exclusive rights deal for “The Office,” the No. 1 show on Netflix. There is a potential fallacy in the companies’ thinking around these lavish deals: What if Netflix subscribers were streaming “Friends” and “The Office” for hours on end simply for background noise, something to mindlessly tune in and out of as they scrolled Instagram or did chores? In that case, perhaps users won’t necessarily miss those specific shows and won’t switch to other services at a rate that would come close to justifying nearly $1 billion for two old sitcoms. In any case, I keep writing about the frustration of needing to pay for and toggle between numerous apps just to access all your favorite content and the confusion that comes with doing so. It’s only going to get worse once Apple TV+, Disney+ and HBO Max launch. But at least there will be no shortage of stuff to watch, and with all this money being thrown around, you know it’ll be good. To contact the author of this story: Tara Lachapelle at email@example.comTo contact the editor responsible for this story: Beth Williams at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Tara Lachapelle is a Bloomberg Opinion columnist covering deals, Berkshire Hathaway Inc., media and telecommunications. She previously wrote an M&A column for Bloomberg News.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
Logistics real estate company Prologis, Inc. (NYSE: PLD) continues to add to its real estate portfolio, this time with a rare find in the Los Angeles market. As reported by the Los Angeles Business Journal, the nation's largest logistics warehouse owner, operator and developer has purchased an 11-acre, 85,000 square foot facility in southeast Los Angeles. The property, located in the city of Commerce at 2420 Yates Avenue, was purchased from AT&T Inc (NYSE: T) for $41.1 million.
Chris' note: What do self-driving cars, artificial intelligence, and augmented reality have in common? There's one piece of bleeding-edge technology that unites them all…Source: Shutterstock Regular readers know I'm talking about 5G. It's one of the biggest trends on Jeff Brown's radar.Jeff is our go-to tech expert here at The Daily Cut. And this Thursday, August 22 at 8 p.m. ET, he's hosting a free 5G investment summit.InvestorPlace - Stock Market News, Stock Advice & Trading TipsAs you'll see, we're about to enter what Jeff calls the "Final Phase of the 5G Boom." If he's right, folks have a real shot at watching a series of small investments return 500%… 1,000%… and more. If you're serious about profiting from the 5G boom, you'll want to reserve your spot right here.But you don't have to wait until Thursday to learn more about 5G… and why Jeff believes it will be the most important tech trend over the next decade. Below, he shows why 5G is central to a global battle America must win. And the economic impact will be huge…The United States and China are locked in a winner-take-all economic struggle.And no, I'm not talking about the ongoing trade negotiations. It's something else.Whoever wins will be the economic powerhouse of the next decade. The stakes are that high.Let me show you what I mean…Hostile TakeoverLast year, we almost saw a merger between technology firms Broadcom (NASDAQ:AVGO) and Qualcomm (NASDAQ:QCOM). Had it gone through, it would have been the largest tech deal to date.Broadcom had been pursuing Qualcomm since November 2017. It initially offered an unsolicited bid of $103 billion to acquire controlling interest of Qualcomm.Qualcomm resisted. So Broadcom took another route.It initiated a hostile takeover of Qualcomm. That's when an acquiring company attempts to bypass its target's board and purchases a controlling interest in the company directly from shareholders. Very often, this means offering to buy shares at a premium.At $117 billion, the new bid for Qualcomm would have represented the largest technology merger in history.But then the White House stepped in… President Trump blocked the merger. The president said that "credible evidence" suggested that the takeover would pose a risk to U.S. national security.The official details are classified. But I believe I know why the White House took this unprecedented step.At the heart of the president's decision to block the merger is fifth-generation (5G) wireless technology.And here's why that's important…The Coming Wave of 5GWhen you connect to the internet on your computer, smartphone, or smart TV, a vast physical communications infrastructure makes that connection possible.And over the years, our wireless networks - and the infrastructure that supports them - have evolved.It all started in the 1980s with first-generation (1G) networks. Compared to what's possible today, 1G didn't allow much. You could only place voice calls - there was no layer for carrying other types of data. And you had to use one of those brick-sized cell phones Gordon Gekko yaps into in the movie Wall Street.But from then on, a new network generation went live roughly every 10 years. Each provided faster download speeds and more applications. The most recent one, 4G, went live around 2011.Now we're shifting to the fifth generation of wireless networks - 5G. And it represents the largest leap in wireless technology to date.A Leap ForwardThe current 4G networks are a disappointment. They're much slower than what the original developers thought the networks would deliver.Worst of all, the U.S. is in 62nd place when it comes to download speeds. That's going by a 2018 OpenSignal report.But with 5G, it's a different story. At peak speed, 5G will be almost 1,000 times faster than the average 4G connection we have today.We'll be going from an average of 16 megabits per second with current LTE connections… to 10 gigabits per second. (One gigabit is 1,000 megabits.)Even if we assume average 5G speeds will be 10% of their potential, we'd be looking at 1,000 megabits per second. That's almost 100 times faster than what we have today.With that kind of speed, you'll be able to download a two-hour movie in 10 seconds. Dropped phone calls and slow-loading web pages will be a thing of the past.Plus, some previously "sci-fi" tech will finally become a reality. Technologies like self-driving cars, virtual reality, and holographic projection will all operate over high-speed 5G connections. The applications are endless.5G is a game-changer because of all the technological innovation it will bring about. It'll be responsible for $12 trillion worth of new goods and services by 2035. That's about 70% of America's total GDP in 2018.And here's why the government considers the completion of 5G a matter of national security…Matter of National SecurityCountries that lead the way in deploying these networks will have a competitive economic advantage over other countries. And the technology companies in these "first-mover" countries will be the first to develop the hardware and software enabling these 5G wireless services.Right now, our government's fear is that China will set the 5G precedent.For context, Chinese company Huawei supplies the infrastructure and support for more than half of the 537 4G networks around the world. Suspicions have abounded for years about the company using its technology to spy on U.S. network traffic. And since 2018, tensions are reaching new highs.This led to Huawei being banned for a time from the U.S. and several other Western markets over spying concerns.The U.S. government sees it as an imperative that U.S. wireless networks are built out quickly - with U.S. and European technology - to ensure that the country's networks are less likely to fall victim to foreign espionage.That's why the Trump administration blocked the Broadcom/Qualcomm merger.While Broadcom recently stated its intention to bring most of its business back to the U.S., the bulk of its business is still based in Singapore. And while Singapore is its own country, it's heavily controlled by Chinese Singaporeans.The concern was that Broadcom would force Qualcomm to cut back on its 5G research and development, letting Huawei fill the void and making U.S. wireless networks vulnerable to cyberspying.This isn't wild speculation, either.The Committee on Foreign Investment in the United States is a government agency that oversees foreign investment in American companies. It officially recommended blocking the Broadcom/Qualcomm merger. And it specifically mentioned the threat Huawei posed in the 5G space.The Trump administration even threatened to take things one step further…Nationalized InfrastructureIn January 2018, leaked White House documents showed that the U.S. government was considering nationalizing the 5G network build-out.In other words, it wanted to seize control of wireless networks from AT&T (NYSE:T), Verizon (NYSE:VZ), and other service providers… and put them in the hands of the government.I had a hunch at the time that this was just a warning… a way to light a fire under the U.S. companies involved in the 5G build-out.The Trump administration was saying, "Get out there and build these 5G networks quickly, or we'll do it for you."And I was right. Trump has since said he opposes nationalizing the U.S. 5G network.But sending a warning was a very smart move by the administration. And it worked.Verizon and AT&T are already building out 5G networks in dozens of cities around the country. So are T-Mobile and Sprint, which are in the process of merging.The hope is for the U.S. to regain leadership in wireless network deployments. This will stimulate even stronger leadership in wireless network technology.If the U.S. fails, the government fears that America would depend on Chinese 5G technology. That would give China an enormous amount of leverage over the U.S.And remember, 5G is expected to create more than $12 trillion in wealth. Whoever sets the 5G precedent will be the economic powerhouse for the foreseeable future.This is a race the United States must win at all costs.Regards,Jeff Brown Editor, Exponential Tech InvestorP.S. The 5G race isn't over yet… That's why this Thursday I'm hosting a free 5G investment summit, The Final Phase of the 5G Boom.Key 5G stocks will soar 10X at least. And on August 22 at 8 p.m. ET, I'll show you how I spot these winners. I'll even give you the name of the top 5G company on my watchlist. If you're serious about investing in the 5G boom, you'll want to reserve your spot here. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Cheap Dividend Stocks to Load Up On * The 10 Biggest Losers from Q2 Earnings * 5 Dependable Dividend Stocks to Buy The post Trump Blocks Tech Merger to Stimulate 5G Leadership appeared first on InvestorPlace.
Kate Hopkins is the VP of Data Platform for the AT&T; Chief Data Office, which was created less than two years ago at the Dallas giant.
While Verizon (VZ) is drawing curtains to its local news channel Fios1 News, AT&T (T) is launching a new television service with AT&T TV.
AT&T, Verizon, T-Mobile, and Sprint are not the only choices when picking a wireless plan. Is making the switch to prepaid the right option for you?
U.S. high-dividend stocks are trading at their biggest discount in four decades as investors flock to bonds, pushing down their yields.
(Bloomberg) -- Apple Inc. plans to roll out the Apple TV+ movie and TV subscription service by November, part of a drive to reach $50 billion in service sales by 2020. The company will introduce a small selection of shows and then expand its catalog more frequently over several months, people familiar with the matter said. A free trial is likely as Apple builds up its library, said the people, who asked not to be identified because the plans aren’t public.The iPhone maker is entering an increasingly crowded field, led by streaming pioneer Netflix Inc. and Amazon.com Inc. In the coming months, Walt Disney Co., AT&T Inc. and Comcast Corp.’s NBCUniversal will debut new offerings -- all targeted at the growing ranks of viewers who are canceling cable-TV subscriptions or watching on mobile devices.With its first foray into video subscriptions, Apple is weighing different release strategies for shows. The company is considering offering the first three episodes of some programs, followed by weekly installments, the people said. Netflix tends to release whole seasons at once for bingeing, while AT&T’s HBO and Disney’s Hulu often release episodes weekly. The service will launch globally in over 150 countries. Apple TV+ will be one of five major digital subscription services in Apple’s portfolio, along with Apple Music, the upcoming Apple Arcade gaming service, Apple News+ and iCloud storage subscriptions. The company also generates recurring revenue from products like AppleCare extended customer service and its bank-operated iPhone upgrade program. It will also likely start pulling in revenue from the Apple Card, which began rolling out earlier this month. An Apple spokesman declined to comment.Apple hasn’t announced pricing for Apple TV+, but is weighing $9.99 a month, the people said, which would match Apple Music and Apple News+. Netflix and Amazon Prime charge as little as $8.99, while Disney+ plans to seek $6.99 when its service debuts in November.The Financial Times reported on Tuesday that Apple has set aside $6 billion for original shows and movies, without saying where it got the information. The budget for the first year of content was $1 billion, but has since expanded, it said. That’s far less than what Netflix is expected to spend this year. Analysts forecast it will lay out more than $14 billion on films and TV shows.Revenue DriveApple is pushing into services to generate added revenue from its large base of iPhone, iPad, Mac and Apple Watch users. Consumers have been slower to replace hardware recently due to higher prices, market saturation, economic headwinds and a lack of new, breakthrough features. Read More: Apple Faces Life After IPhone But Still Banks on the IPhoneThe company could head off a revenue slowdown by coaxing users to subscribe to the new services. Cupertino, California-based Apple could also potentially boost revenue by tying services to the iPhone upgrade program, which lets customers update to new models annually via monthly payment plans.Apple’s initial slate of shows will include “The Morning Show,” Steven Spielberg’s “Amazing Stories,” “See” with Jason Momoa, “Truth Be Told” with Octavia Spencer, and a documentary series about extravagant houses called “Home.” On Monday, the company released the second trailer for “The Morning Show,” starring Jennifer Aniston, Reese Witherspoon and Steve Carell. The TV service will be part of Apple’s TV app, which comes installed on the company’s devices, and will also be accessible from third-party products, like Roku and Amazon Fire TV boxes, and Samsung televisions.In the fiscal third quarter, services represented a record 21% of Apple’s sales, while the iPhone continued to dip below 50% of the total.Analysts have suggested Apple TV+ could top 100 million subscribers in the next half-decade, which would make it a major challenger to Netflix and Amazon.The company is making a big commitment to video, including around $300 million alone to two seasons of “The Morning Show,” according to people familiar with the matter.(Updates with budget details in 8th paragraph.)\--With assistance from Nate Lanxon.To contact the reporters on this story: Mark Gurman in San Francisco at email@example.com;Anousha Sakoui in Los Angeles at firstname.lastname@example.org;Lucas Shaw in Los Angeles at email@example.comTo contact the editors responsible for this story: Nick Turner at firstname.lastname@example.org, Thomas PfeifferFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
As Walt Disney, AT&T; and others launch new internet TV services, investors should eye plays on 'derivatives' such as Roku stock, Akamai and Trade Desk, says RBC Capital.
Tower operators could benefit from increased leasing driven by accelerated 5G activity and new entrants into the wireless arena, according to KeyBanc Capital Markets. The Analyst Brandon Nispel maintained ...
The key to investing is buying good stocks. Sounds simple enough, right? If it's so simple, why isn't everyone a great investor?Because what constitutes "good stocks" to buy is widely debated across the entire financial media landscape. Are the best stocks to buy cheap stocks, with price-to-earnings multiples below the market average multiple? Are they stocks with big yields, that pay you regardless of how the stock performs? Or are the best stocks momentum growth stocks, with 50%-plus revenue growth rates and huge trailing twelve month returns?Arguably, it's all of them. What makes a good stock isn't a particular characteristic, but rather a combination of favorable characteristics which, when mixed together, create a winning recipe for long-term success.InvestorPlace - Stock Market News, Stock Advice & Trading TipsWith that in mind, here's one favorable characteristic of a "good stock" in the internet era: lots of high margin recurring revenue.Why is that a favorable characteristic? Recurring revenue means high visibility revenue since -- barring some sea change of subscription cancellations -- that revenue will come back next year. By the same logic, high margin, recurring revenue means high visibility profits, and as we all know, as go profits, so goes a stock. * 10 Best High-Growth Stocks to Buy for Young Investors Because of this, stocks with a lot of high margin recurring revenue are often set up for long-term success. That's why I've put together a list of five growth stocks to buy with a lot of high margin, recurring revenue. Stocks to Buy With High-Margin Recurring Revenue: Netflix (NFLX)Source: Shutterstock How Much of Revenue Is Recurring: Essentially 100%At What Gross Margin: Over 35%, and climbing rapidlyArguably the most well-known growth stock with a ton of high-margin recurring revenue is Netflix (NASDAQ:NFLX), the streaming service giant which collects nearly 100% of its revenue from annually recurring subscription fees, at a 35%-plus and rapidly rising gross margin.Despite that attractive business model, there are two big concerns weighing on NFLX stock right now -- competition and profitability. Both concerns are overstated.On the competition front, linear TV packages are so expensive (upwards of $100 per month) and subscription TV packages so inexpensive ($10 to $15 per month) that consumers cutting the cord can afford to bundle together multiple streaming services. Indeed, at a $10 to $15 price point, most Americans would be willing to subscribe to two to three streaming services, according to a MorningConsult survey. Thus, Netflix doesn't need to beat Disney (NYSE:DIS) or AT&T (NYSE:T). It just needs to be No. 2 or No. 3, which it unequivocally is and will remain to be given its data and reach advantages.Competition concerns are also overstated. Yes, Netflix burns a ton of cash right now, and gross margins are just 35%. But, let's zoom out and look at the business model. Netflix has relatively fixed content costs. Regardless of how many subscribers Netflix has, if it costs $10 million to make an original movie today, it will cost the same in five years, net of inflation. But, revenues rise with subscribers, so while costs are fixed relative to sub growth, revenues are not. Thus, the model is built to benefit from tremendous leverage at scale.Net net, despite recent operational concerns, Netflix is still a winning growth company with a stable, high-margin recurring revenue base, that will one day produce huge profits at scale. Those huge profits will inevitably lead to big gains for NFLX stock in the long run. Chegg (CHGG)Source: Shutterstock How Much of Revenue Is Recurring: Roughly 85%At What Gross Margin: At least 75%, probably above 80%Another consumer-facing growth stock with a ton of high-margin recurring revenue is Chegg (NASDAQ:CHGG), the digital education platform which collects about 85% of its revenue from annually recurring subscriptions to its Chegg Services ecosystem, at a gross margin that is likely north of 80%.The secular bull thesis here is simple. Most of the consumer economy has become all-digital, all the time. The academic world has not. Chegg is changing that, building a connected learning platform that gives high school and college students across America the digital education companion they've needed for the past several years.Demand is huge -- Chegg has grown subscribers at a near-40% compounded annual growth rate since 2012. That demand is paying up -- Chegg Services revenue has grown at a 45% compounded annual growth rate since 2012. All that money is of the high margin quality -- total gross margins are north of 75%, meaning the Services gross margin is likely north of 80%. And, above all else, the opportunity is huge -- 3.1 million Chegg subscribers out of 36 million high school and college students … in the U.S. alone. * 15 Growth Stocks to Buy for the Long Haul Big picture, this is a high-quality company supported by secular growth drivers. The company has a long runway for growth ahead of it, and produces tons of high margin, annually recurring revenue. That's a winning recipe for long-term success. Shopify (SHOP)Source: Shopify via FlickrHow Much of Revenue Is Recurring: Around 40%At What Gross Margin: Above 80%Although subscriptions aren't the bulk of its business model, e-commerce solutions provider Shopify (NYSE:SHOP) nonetheless collects about 40% of its revenue from subscriptions, and collects those revenues at a gross margin north of 80%.Taking a step back here, Shopify is a Canadian-based company that provides e-commerce solutions to merchants of all shapes and sizes. In so doing, they've become the equivalent of a digital store front, or the commerce backbone for hundreds of thousands of merchants all across the world. The company makes money two ways -- those e-commerce solutions are sold in subscription packages, and Shopify takes a cut of the sales processed through its merchants' stores. Merchant sales make up the majority of revenue, but the subscription business is higher margin and, therefore, equally important to profits.The bull thesis here is as follows. Shopify presently accounts for less than 1.5% of global e-retail sales. That's a very small piece of this pie. But, Shopify's share is rapidly growing, because of underlying secular trends promoting entrepreneurship and do-it-yourself mentalities among consumers globally. Those secular trends will remain in play for the foreseeable future. So long as they do remain in play, Shopify's share of the global retail sales pie will rapidly expand. As it does, Shopify's revenues will continue to march higher, and because the business operates at such high gross margins, that big revenue growth will lead to even bigger profit growth.Long term, then, Shopify projects as a big-time profit growth company. All that profit growth should push SHOP stock higher in the long run. Adobe (ADBE)Source: Shutterstock How Much of Revenue Is Recurring: Almost 90%At What Gross Margin: Over 90%Perhaps the king of the subscription model, Adobe (NASDAQ:ADBE) collected 88% of its revenue in fiscal 2018 from annually recurring subscriptions, and those annually recurring subscriptions have yielded a gross margin north of 90% for the past several years.Adobe didn't earn the title of subscription model king for no reason. We all know the Adobe name -- they are the only relevant name in the creative solutions world for photo editing, video editing, so on and so forth. But, back in 2010, Adobe didn't really know how to maximize its monopoly in the creative solutions game. Then, a light bulb went off -- pivot everything to the cloud, make everything a subscription and collect high-margin, annually recurring revenue from now until forever.In 2012, they did just that. Consumers were upset at first. Their favorite creative solutions program went from being available forever for a one-time-fee, to being locked behind a subscription paywall. But, because Adobe has no competition in this space, those complaints eventually drowned out. Within a few years, everyone and their best friend had pivoted to the subscription model. Further, Adobe expanded its reach because -- perhaps by luck -- the world simultaneously became more visually obsessed, so more and more consumers and enterprises had a need for Adobe's creative solutions.These trends will remain in play for the foreseeable future. Adobe's revenues will continue to rise as the world becomes more and more visually-obsessed, meaning more consumers will tap Adobe to edit and amplify their photos. At the same time, more enterprises will tap Adobe to create visually pleasing marketing and product/service experiences that relate to their visually-obsessed consumers. All that revenue will come in at high gross margins, so profits will simultaneously rise by leaps and bounds. * 7 Great Small-Cap Stocks to Buy Net net, then, Adobe's profits will continue to roar higher over the next several years. That will power equally robust gains in ADBE stock long term. Okta (OKTA)Source: Shutterstock How Much of Revenue Is Recurring: Over 90%At What Gross Margin: Over 80%On the enterprise side of things, identity cloud pioneer Okta (NASDAQ:OKTA) generates over 90% of its annual revenues from subscriptions it sells to cloud security customers. Those subscription revenues generated gross margins north of 80% in fiscal 2018.Let's zoom out here. Okta has created something called the Identity Cloud. The idea behind the Identity Cloud is pretty revolutionary and genius. Essentially, instead of building a "castle" around a company's workflows and processes, Okta has outfitted each individual in a company's workflows and processes with "armor". That is, Okta focuses on protecting the individual, not the whole. But, if everyone in the ecosystem has "armor", then the whole ecosystem is safe. It also means that there is no "weak link". Because everyone is wearing this "armor", individuals can securely do almost anything without compromising the integrity or safety of the ecosystem.Enterprises have found this identity-based approach to cloud security compelling. At its core, it allows individuals to securely access any technology at any point. This seamless adoption curve is critical in a world where new technologies are being rapidly adopted and deployed every day.As such, Okta's growth trajectory has been very impressive. We are talking "50%-plus revenue growth" impressive. Over 90% of that revenue comes from annually recurring subscriptions. That subscription-based revenue has 80%-plus gross margins.In other words, this is a big growth business with high visibility and robust margins. Ultimately, that's a long-term winning recipe.As of this writing, Luke Lango was long NFLX, DIS, T, CHGG, SHOP, ADBE and OKTA. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Cheap Dividend Stocks to Load Up On * The 10 Biggest Losers from Q2 Earnings * 5 Dependable Dividend Stocks to Buy The post 5 Stocks to Buy With High-Margin Recurring Revenue appeared first on InvestorPlace.
AT&T;'s CEO says that the new service, which includes a lighter device, Google features and access to streaming rivals, could be a "workhorse" for the company.
The stock market has rushed to all-time highs in 2019 and -- despite recent trade-inspired turbulence -- is still on pace to have one of its best years in recent memory. But not all stocks have joined in on the rally. Instead, a handful of stocks have actually had a rough 2019, dropping big year-to-date into historically undervalued territory -- even while the market trades at a decade-high valuation.Some of these undervalued stocks are undervalued for a reason, and should be avoided for the foreseeable future. The fundamentals simply don't warrant a turnaround.But some of these undervalued stocks look primed for a breakout. That is, some of them appear unreasonably undervalued, with big catalysts on the horizon -- a combination which paves a tangible pathway for big upside.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 7 Great Small-Cap Stocks to Buy With that in mind, let's take a look at 10 undervalued stocks with breakout potential in the back-half of 2019. Foot Locker (FL)Source: Shutterstock The Valuation: Because the athletic apparel sector sources a lot of production from China, many athletic apparel stocks find themselves at the epicenter of the U.S.-China trade war. Foot Locker (NYSE:FL) is no exception. The company's margins have come under significant pressure thanks to tariffs, and in response, investors have sold off FL stock to an anemic 8-times forward earnings multiple, versus a five-year-average forward multiple north of 12, a consumer discretionary sector average multiple north of 20, and a footwear sector average multiple north of 28.The Breakout Catalyst: Foot Locker's demand trends are healthy. Last quarter, Foot Locker reported nearly 5% comparable sales growth. Thus, the whole problem here is the trade war. If the trade war cools, FL stock will presumably rally in a big way. It increasingly appears that this will happen. U.S. President Donald Trump has delayed the next round of tariffs, while China is coming under intense internal pressure with the Hong Kong riots. Consequently, it appears both sides want to de-escalate trade tensions. Such a de-escalation should couple with strong demand drivers at Foot Locker to propel a breakout rally in FL stock into the end of 2019. CVS (CVS)Source: Shutterstock The Valuation: Pharmacy giant CVS (NYSE:CVS) is in the midst of multi-year downtrend thanks to adverse consumption and legislation trends, the sum of which have weighed on revenues, profits, and investor sentiment. Net net, CVS stock today trades at a depressed 8.5-times forward earnings multiple, versus a five-year-average forward multiple of over 13. * 3 Warning Signals a Stock Market Crash Is Coming The Breakout Catalyst: Both consumption and legislation trends are finally progressing in the right direction for CVS. On the consumption side, CVS reported a robust 4.2% increase in same store sales last quarter, including an impressive 2.9% increase in front store sales. This is mostly because, thanks to the Aetna acquisition, CVS is pushing forward on a promising local healthcare plan. Meanwhile, on the legislation side, the White House scrapped a PBM rebate program which would've been disastrous for CVS. Broadly, then, it increasingly appears that CVS stock is the early innings of massive multi-quarter rebound. AT&T (T)Source: Shutterstock The Valuation: Telecom-giant AT&T (NYSE:T) has featured a persistently cheap stock for the past several years. T stock trades at just 10-times forward earnings today and has averaged an 11-times forward earnings multiple over the past five years. In other words, T stock has been stubbornly cheap forever.The Breakout Catalyst: AT&T stock has been stubbornly cheap forever because the company has been staring at huge cord-cutting headwinds. Much like Disney (NYSE:DIS) has done over the past few months, though, AT&T is prepared to shake off those cord-cutting headwinds over the next few months thanks to the launch of a new content-packed streaming service in HBO Max. At the same time, the forthcoming 5G wave promises to provide a big boost to the company's wireless business. Thus, over the next twelve months, two big catalysts -- a full blown pivot into the streaming space and the mainstream roll-out of 5G -- will finally "wake up" T stock and spark a big breakout rally in this stubbornly cheap stock. American Airlines (AAL)Source: Shutterstock The Valuation: Airline stocks have been hit hard over the past twenty months, dragged down by rising oil prices in early 2018, slowing global air travel demand in late 2018 and the 737 MAX crisis in 2019. American Airlines (NYSE:AAL) has been no exception to the trend. If anything, it's been an out-sized loser, with AAL stock down more than 50% since early 2018. At present, given the the airline industry's sizable headwinds, AAL stock trades at just 5.5-times forward earnings, versus an airline average forward earnings multiple north of 8. * 15 Growth Stocks to Buy for the Long Haul The Breakout Catalyst: The fundamentals underlying the airline industry are positioned to meaningfully improve over the next few quarters. Oil prices will drop, as supply continues to outstrip demand in a slowing global manufacturing economy. Air travel demand will remain robust, as the global consumer economy remains on solid footing. 737 MAX planes will get back into the air by early 2020. Net net, by early 2020, top and bottom line trends across the whole airline industry should meaningfully improve, and that improvement should lead to a breakout recovery rally in depressed and beaten-up AAL stock. AMC Entertainment (AMC)Source: Shutterstock The Valuation: It's been a rough year for movie theater operator AMC Entertainment (NYSE:AMC), as sluggish box office trends in the first half of 2019 have breathed life back into the thesis that movie theaters are going extinct. As that thesis has gained traction, AMC stock has plunged to dirt cheap levels. Today, AMC stock trades at less than 0.3-times trailing sales. Three years ago, the trailing sales multiple was above 1.The Breakout Catalyst: July 2019 box office trends showed meaningful improvement from the January through June trend. August is off to a good start, too. The outlook for the rest of 2019 is also favorable, headlined by a second Frozen movie and the final installment in the latest Star Wars trilogy. As box office trends continue to improve into the end of the year, the "movie theaters are dying" thesis will start lose steam. As that thesis drowns out, investor sentiment will improve, and the stock will meaningfully recover. Ford (F)Source: Shutterstock The Valuation: After several years of red hot growth, the global auto market is cooling off. In that cooling market, U.S. auto giant Ford (NYSE:F) is losing share. The company's margins are also coming under intense pressure thanks to U.S.-China tariffs. Net net, revenue, margin and profit trends at Ford have been depressed for some time. This has led to an equally depressed Ford stock, which presently trades at just 7.2-times forward earnings. * 10 Cheap Dividend Stocks to Load Up On The Breakout Catalyst: The recent surge of proactive fiscal stimulus in the U.S. economy in the first half of 2019, should have a positive impact on auto market demand in the back half of 2019. Continued healthy labor conditions should similarly help reinvigorate auto demand. At the same time, Ford is aggressively reshaping its car portfolio to be more electric and thereby, more relevant. Tariffs are also being pushed back, and the trade war looks like it will cool down from here. Putting all that together, then, Ford's underlying fundamentals are positioned to improve significantly over the next few quarters. As they do, Ford stock should bounce back from today's depressed levels. Intel (INTC)Source: JHVEPhoto / Shutterstock.com The Valuation: When it comes to playing the next-gen AI and data revolution, chipmaker Intel (NASDAQ:INTC) offers investors arguably the cheapest way to do it. The company has exposure to all of those secular growth end markets (self driving, machine learning, hyper-scale data centers, so on and so forth). Yet, INTC stock trades at just 11-times forward earnings, mostly because Intel is a slow growth player in those market that is rapidly losing share to faster growing rivals.The Breakout Catalyst: INTC stock could charge higher for three big reasons. First, Intel's next-gen chips are finally here (and more are coming soon), so the company may finally be able to win share back from Advanced Micro Devices (NASDAQ:AMD). Second, the trade war appears to be cooling, and that's big for both Intel's demand and margins. Third, there are rumors out there that hyper-scale data center spend - which has taken step back thus far in 2019 - is finally starting to ramp back up. Those three catalysts together could push INTC up towards $60 within the next few quarters. IBM (IBM)Source: Shutterstock The Valuation: Much like shares of AT&T, shares of blue chip tech giant IBM (NYSE:IBM) have been stubbornly cheap for the past several years as the company has dealt with sluggish revenue, margin, and profit growth trends. Investors keep waiting for things to turn around. They never do. As such, IBM stock has been depressed for a long time. * 7 Safe Dividend Stocks for Investors to Buy Right Now The Breakout Catalyst: IBM's sluggish growth trends could finally turn around over the next few quarters, thanks to the integration of Red Hat. Last year, IBM announced its intention to acquire hybrid cloud company Red Hat. That acquisition just closed. Importantly, Red Hat is growing revenues at a much faster rate than IBM, and operates at higher gross margins. Red Hat also opens up IBM's cloud business to Red Hat's long list of hybrid cloud customers. Thus, the integration of Red Hat into IBM's business will provide a meaningful lift to IBM's revenue and profit growth trends. That lift should breathe life back into depressed IBM stock. Skechers (SKX)The Valuation: As mentioned earlier, the athletic apparel sector finds its square in the middle of the U.S.-China trade war. Athletic footwear brand Skechers (NYSE:SKX) is no exception. Consequently, as trade tensions have heated up in August, SKX stock has retreated. The stock now trades at less than 15-times forward earnings, versus an apparel retail sector average multiple of nearly 18 and footwear sector average multiple of nearly 30.The Breakout Catalyst: Prior to trade tensions heating up, Skechers reported blowout second quarter numbers which comprised big revenue growth, big margin expansion, and big profit growth. SKX stock soared in response to that print. The stock has since given up nearly all of those gains because of Trump's proposed new tariffs. But, those new tariffs are being edited and delayed -- and may never actually come into existence. As such, as fear surrounding those new tariffs eases and disappears over the next few months, SKX stock should bounce back to its post-earnings highs. Kohl's (KSS)Source: Sundry Photography/Shutterstock.com The Valuation: The physical retail sector has been killed over the past several quarters, mostly because a disappointing holiday 2018 season has flowed into continued sluggish sales trends through the first half of 2019. Kohl's (NYSE:KSS) -- one of the largest physical retailers in the U.S. -- has not been immune to the sell-off. In 2019, Kohl's comparable sales have dropped into negative territory, while margins have retreated. In response, KSS stock has dropped big, and now trades at a dirt cheap 9.6-times forward earnings multiple (versus a five-year-average forward earnings multiple of 12-plus). * 7 Great Small-Cap Stocks to Buy The Breakout Catalyst: The macro retail backdrop will meaningfully improve over the next few quarters, thanks to: 1) proactive fiscal stimulus in the first half of 2019, 2) continued favorable U.S. labor conditions, 3) plunging interest rates and 4) de-escalating trade tensions. Against that improving retail backdrop, Kohl's growth trends should bounce back because this company has a unique value prop (off price and off mall) and winning omni-channel growth strategy based on multiple Amazon (NASDAQ:AMZN) partnerships. As such, by the end of 2019, Kohl's comps should inflect back into positive territory, while margins should march higher. If so, KSS stock should bounce back in a big way from today's depressed valuation levels.As of this writing, Luke Lango was long FL, CVS, T, DIS, AMC, F, INTC, and AMZN. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Cheap Dividend Stocks to Load Up On * The 10 Biggest Losers from Q2 Earnings * 5 Dependable Dividend Stocks to Buy The post 10 Undervalued Stocks With Breakout Potential appeared first on InvestorPlace.
Reportedly, things are tense between WarnerMedia chief John Stankey and members of HBO's executive team, regarding plans for a new Netflix-type streaming service.
The necessary technologies to usher in the 5G era -- particularly in the United States -- are only just now becoming available, potentially making Nokia (NYSE:NOK) a solid defensive play at this point. 5G is Coming, Ready or NotSource: Shutterstock 2019 isn't going to be the "year of 5G." Although 5G service is available in some select locations, it's not yet offered in most places. Smartphones must also be built with 5G-compatible components, and most of the smartphones in use today don't meet that criteria.However, that picture could be, and likely will be, different a year from now.InvestorPlace - Stock Market News, Stock Advice & Trading TipsAT&T (NYSE:T) says it will offer nationwide 5G by the end of 2020. Ditto for T-Mobile (NASDAQ:TMUS). Just as importantly, many more 5G-compatible major-brand phones will be readily available in 2020. The first 5G-capable iPhone from Apple (NASDAQ:AAPL) is supposed to debut next year, which has already inspired something of a race.Consumers will do their part, too. Once some of them experience wireless connection at least speeds ten times faster than the current 4G norm, they'll clamor for game-changing 5G devices. * 7 Great Small-Cap Stocks to Buy Deal Growth Bodes Well for Nokia StockThe infrastructure needed to make 5G a reality is being put in place now.In June,NOK announced it had inked 42 different 5G-related hardware deals (that number has since been upped to 45) across the globe. According to NOK, that's more than any other supplier has confirmed. Based on those numbers, it appears that Nokia's rival, Ericsson (NASDAQ:ERIC). is winning about one-third fewer 5G deals than NOK.Both statements are contentious, and questionable. Huawei says two-thirds of 5G installations outside of China utilize the hardware and corresponding software it offers, while Ericsson paints an obscure picture that at least implies it's holding its own against NOK.One thing is clear, though; Nokia is winning some business, but most of the deals have yet to generate reportable revenue that can meaningfully boost Nokia stock. Those deals won't generate reportable revenue until the installations they're facilitating are completed and up and running.How much revenue NOK has already lined up from its deals isn't clear, and some of the projects can still be canceled.By and large though, NOK has already lined up a great deal of new, incremental revenue that will start flowing in the second half of 2019 and then grow through 2020. Barring an outright, global economic meltdown, most of those 5G contracts should be completed by the end of next year. New ones will be added in the meantime. Looking Ahead for NOK StockConsumers have to have food and their mobile internet service, their usual guilty pleasures. As a result, those are two of the few slivers of the market that are shielded from macro pain.Nokia's top line is expected to drop 1.5% this year, but next year's anticipated 3% improvement is more significant than it may seem to be on the surface. That's because the rebound sets the stage for considerable earnings growth.While this year's average outlook by analysts for a profit of 27 cents per share of NOK stock only matches last year's EPS, the pros, on average, are calling for its EPS to jump to 41 cents in 2020. Most of that top and bottom line growth is the result of anticipated new 5G-related revenue.Assuming Nokia's 2020 EPS comes in at 41 cents, by the way, Nokia stock now has a forward-looking price-earnings ratio of only 12.5.The trick going forward is getting the masses to believe in the company's outlook enough to shake Nokia stock out of its slump. NOK still has enough firepower to inspire such buying if the company manages to garner enough attention from the Street.As of the time of this writing, James Brumley did not hold a position in any of the aforementioned securities. To learn more about James, visit his site at jamesbrumley.com, or follow him on twitter at @jbrumley. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Cheap Dividend Stocks to Load Up On * The 10 Biggest Losers from Q2 Earnings * 5 Dependable Dividend Stocks to Buy The post Nokia's 5G Business Makes NOK Stock a Defensive Option appeared first on InvestorPlace.
Much has been made about the loss of two of its most popular shows, but over time, losses such as these will become less important.
Netflix will spend $15 billion on content this year alone—up from $12 billion last year. Some analysts started to sound the alarm about Netflix’s spending.
When it comes to investing and picking stocks, I take a three step approach.First, the fundamentals -- the numbers and long-term growth prospects have to check out and warrant the present valuation. Second, the optics -- there has to be some behavioral reason out there why investors will want to buy this stock over the next several months and years. And third, the technicals -- the chart has to make sense and support the bull thesis. * 10 Cheap Dividend Stocks to Load Up On In this gallery, we will focus on that third component, the technicals. I have selected a group of high-quality stocks which check off the first two boxes and hit a home run on the third box, meaning that they all have really good charts which support the bull thesis.InvestorPlace - Stock Market News, Stock Advice & Trading TipsWithout further ado, let's take a look at a list of seven stocks to buy with great charts, and favorable fundamentals and optics, too. Stocks to Buy With Great Charts: Facebook (FB)The chart for Facebook (NASDAQ:FB) stock has looked good all year long.After a secular decline in 2018, FB stock put in a bottom in December 2018. Since then, the stock has formed a nice uptrend over the past eight months, with a strong, upward sloping support line that has tested and held three times before -- each time when the stock's relative strength index tumbled towards oversold territory.We have a similar setup today. Facebook stock's RSI is tumbling towards oversold territory, and the stock is testing this multi-quarter support line. It appears like FB wants to hold this support line yet again, and if so, a big bounce could be just around the corner.The 2019 recovery in technicals for FB stock has been mirrored by a recovery in its fundamentals and optics. The fundamentals for FB stock have been rock solid all year long. User growth has remained steady. Revenue growth has remained robust. Margins are starting to rebound now that big data security investments are being phased out. Profit growth is coming back into the picture.Meanwhile, the optics have been similarly good all year long. Investors (and consumers) are forgetting or have already forgotten about the Cambridge Analytica scandal. This controversy moving into the rear-view mirror has lifted investor sentiment, which has helped push the stock higher over the past eight months.The fundamentals, optics and technicals all project to remain favorable for the foreseeable future. As such, the 2019 uptrend in FB stock is set to persist into the end of the year. AT&T (T)The chart on AT&T (NYSE:T) looks so good because this stock appears to be in the early stages of a technical breakout. The 20-day moving average has surged above the 50-day moving average. Both of those moving averages have surged above the 200-day moving average. All three of those moving averages are sloping upward (albeit only slightly on the 200-day).The last time these three things happened (20-day above 50-day, both above 200-day and all three with a positive slope) was back in early 2016. T stock essentially proceeded to rally from under $35 to nearly $45 in 2016.Further, the stock has formed a very strong, upward sloping support line since putting in a 52-week low during the late 2018 selloff. * 5 Cheap Stocks to Buy Now That the Fed Cut Rates The fundamental bull thesis lines up with the technicals here. AT&T is a telecom giant which has struggled with wireless pricing competition and wired cord-cutting over the past several years. But, in 2020, those headwinds should be replaced by tailwinds. Specifically, the wireless business will get a big boost from the 5G boom, while cord-cutting headwinds should be offset by streaming growth through the 2020 launch of content-packed HBO Max.As such, the fundamental bull thesis on T stock looks equally good as the chart at this moment in time. Chegg (CHGG)The chart for Chegg (NYSE:CHGG) looks good simply because the stock has been so strong for so long, even amid massive market turbulence over the past year.The secular uptrend in CHGG stock really started in early 2017. Ever since, CHGG stock has been up over 400%. More impressively, the stock hasn't had many major drawdowns during that stretch. Since 2017, the stock has tested its 200-day moving average only once -- during the late 2018 selloff when the markets briefly entered a bear market. Outside of that, CHGG stock has been on a solid, straight-line uptrend since early 2017.The fundamentals supporting CHGG stock are so good, that it's no wonder why the stock has been on such a winning trajectory. Chegg has created a digital education platform which high school and college students everywhere don't just want, but need in today's internet-dominated world (and they are willing to pay for it). As such, Chegg's subscribers have grown at a roughly 40% clip over the past several years, while revenues have grown at a nearly 45% clip. Pretty much all of that revenue is subscription-based, so it's annually recurring, and it's also very high margin.Chegg is really just getting started on its high-growth, high-margin growth narrative. Chegg only has around 3 million subscribers. There are over 35 million high school and college students in the United States alone. Consequently, the company's revenues and profits will continue to trend significantly higher over the next several years. As they do, CHGG stock will stay on this long-term winning trajectory. Under Armour (UAA)The chart on Under Armour (NYSE:UAA) looks good here because its technicals are showing that you have a way oversold stock due for a big reflex rally.Long story short, the relative strength index on UAA stock has dropped to 20, which is well into oversold territory, while the price is now testing a long-term support line. The last time this combination happened (oversold RSI with test of long-term support line) was back in late 2018. The stock proceeded to bottom and then rally more than 20% over the following month.The fundamentals here also support the idea the UAA stock is due for a bounce-back. The big drop in Under Armour stock is due to two things. First, the company reported underwhelming earnings at the end of July. Second, the U.S. has threatened to impose new tariffs on China.But, those underwhelming earnings are now fully priced into UAA stock, and one could very reasonably argue that the stock is now undervalued relative to its long-term growth prospects. At the same time, the U.S. tariff threat seems more like a chest puff than anything else -- given that many of the tariffs have actually been delayed -- so trade tensions should de-escalate over the next few months. * 7 Safe Dividend Stocks for Investors to Buy Right Now Consequently, the fundamentals and optics here imply that UAA stock will reverse course soon. The Trade Desk (TTD)The chart for The Trade Desk (NASDAQ:TTD) looks good mostly because you have a long-term winning stock which has a well-defined and strongly upward-sloping support line. And the stock is getting ready to test that support line soon -- implying that a bounce could be around the corner.Specifically, ever since early summer 2018, TTD stock has essentially tripled, and in so doing, has only tested its 200-day moving average once. Further, in 2019, The Trade Desk stock has established a strong, upward-sloping support line which has held four times over the past nine months. TTD is gearing up to test this support line again amid broader market weakness. If the stock holds this support, a big bounce could be around the corner.Much like Chegg, it's no wonder that TTD stock has such a great chart, given that the fundamentals underlying TTD are equally robust.The Trade Desk is the leader in the programmatic advertising world. Programmatic advertising is the future of advertising. It is essentially the convergence of the automation and data-driven trends into the ad world, wherein computers and data-driven algorithms programmatically allocate and spend.Right now, only a small slice of the global ad spend pie is transacted programmatically. Eventually, given that data and automation are the future, pretty much every ad dollar around the world will be transacted programmatically. Thus, as the ad world pivots into programmatic advertising, The Trade Desk will benefit from robust ad spending and revenue growth. Margins will improve with scale, and profit growth will be doubly robust.Net net, then, The Trade Desk is supported by secular growth drivers which ultimately imply that TTD stock will run higher long term. Wayfair (W)The chart on Wayfair (NYSE:W) looks good because you have a long-term winning growth stock that has a history of both sharp selloffs, and sharp rebounds from those selloffs. W stock is currently in the midst of one of those selloffs, and is technically positioned for a big rebound rally.Specifically, the relative strength index on Wayfair stock has recently plunged to just over 20 -- well into oversold territory. Wayfair's RSI has taken a deep dive into oversold territory three times before since January 2018. Each time, the stock bottomed shortly after the RSI entered oversold territory, and proceeded to stage a huge comeback rally over the subsequent few weeks or months.The company's fundamentals support the technicals here in saying that Wayfair stock is due for a big recovery rally.Wayfair stock has been killed over the past few months because of a few things, including poor macroeconomic conditions, a bad third-quarter guide and a convertible note offering. All of this is really just noise. For all intents and purposes, Wayfair is a consumer-driven growth company, and the consumer globally remains fairly healthy, especially in the U.S. Just look at this red hot July retail sales report. * 8 Dividend Aristocrat Stocks to Buy Now No Matter What Secular tailwinds in the e-commerce space remain healthy, and lower rates globally should promote more big ticket purchases -- like home and home furnishing purchases.Net net, the core fundamentals here remain solid. As such, once near-term macro noise passes, W stock should bounce back from today's oversold levels. Adobe (ADBE)There is no such thing as a "perfect" chart. But, the chart for Adobe (NASDAQ:ADBE) comes pretty close. Ever since 2012 -- when Adobe pivoted into a cloud, software as a service model -- ADBE stock has taken off and has not looked back. Every few months, the stock will test its 200-day moving average. Every time, the stock largely holds that level. And, every time, the stock bounces back and moves higher, and the 200-day moving average moves higher too.In other words, this stock has been on a seemingly unstoppable uptrend over the past seven years.Adobe checks off every box you'd want a growth stock to check off.Big revenue growth? Check -- 20%-plus revenue growth in each of the past several quarters. Secular demand drivers? Check. The world is becoming more visually obsessed, and as it does, consumers and enterprises alike are increasingly using Adobe's visually-focused solutions. Limited competition? Check. Adobe has so little competition in the creative solutions space that the average Joe would be hard-pressed to name an Adobe alternative. Big margins? Check. Adobe's subscription business runs at 90%-plus gross margins. Revenue visibility? Check. Adobe collects about 90% of its revenue form annually recurring subscriptions.So long as Adobe continues to check off all those boxes -- and the global economy staves off a recession -- ADBE stock should continue to trend higher.As of this writing, Luke Lango was long FB, T, CHGG, UAA, TTD, and ADBE. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Cheap Dividend Stocks to Load Up On * The 10 Biggest Losers from Q2 Earnings * 5 Dependable Dividend Stocks to Buy The post 7 Stocks to Buy With Great Charts appeared first on InvestorPlace.
[Editor's note: "10 Best Stocks to Buy and Hold Forever" was previously published in July 2019. It has since been updated to include the most relevant information available.]In a market environment that overwhelmingly encourages constant activity by investors who seemingly want to double their money every week, a discussion of stocks to buy and hold forever seems comically out of place.And yet, for better or worse, that's the mindset all of us should adopt when deploying most of our investing capital. More often than not, the more you trade, the worse you end up doing.InvestorPlace - Stock Market News, Stock Advice & Trading TipsIt has been said (and verified) that 95% of true "day traders" -- the most aggressive and active of all market participants -- end up losing money by being too active for their own good. Conversely, the fact that Warren Buffett's favorite holding period is "forever" and how he's got a track record most investors would envy is just as telling. * 10 Cheap Dividend Stocks to Load Up On With that as the backdrop, here's a rundown of 10 stocks to buy and hold forever … or at least until something significant changes with your life plans or the companies themselves. AT&T (T)Dividend Yield: 5.% Year-to-date gain: 20%Calling a spade a spade, shares of telecom giant AT&T Inc. (NYSE:T) haven't been easy to own in a while. The stock is down from its mid-2016 peak, while most other stocks are well up for the timeframe.Source: Shutterstock The impasse has been an increasingly-tougher wireless and broadband market. But now that it's acquired media outfit Time Warner Inc (NYSE:TWX), a turnaround might have begun.If your intended timeframe really is "forever" though, a tough couple of years is nothing … particularly considering you're collecting a healthy dividend yield on your position's current value.More than that though, this is a telco name with a lot of clout, and a little more than $50 billion in the bank. Alphabet (GOOGL, GOOG)Dividend Yield: N/A Year-to-date gain: 12.7%Fans and followers of the company will likely know that Google parent company Alphabet Inc (NASDAQ:GOOGL, NASDAQ:GOOG) beat Q4's earnings estimate, posting $12.77 per share.Source: Shutterstock What got lost in the shuffle is how operating margins fell to 21 % from last quarter's 24%.Appreciated or not, Alphabet is a profit and revenue growth machine that has earned its spot on a list of "forever" stocks to buy. It may not always beat estimates, but it does always increase its numbers. * 10 Cheap Dividend Stocks to Load Up On That's because it keeps finding a way to serve as the middleman for about 70% of web searches done on desktops, and boasts being the preferred search engine for about 90% of the queries made via a mobile device.If it was going to be toppled, we'd see evidence of it by now. 3M (MMM)Dividend Yield: 3.67% Year-to-date gain: -18%In an era where complicated companies are shedding disparate parts of themselves so each arm can be hyper-focused on doing one thing exceedingly well, 3M Co (NYSE:MMM) is something of an outlier.Source: Shutterstock It offers everything from office supplies to healthcare products to the power transformers you see perched on top of power-line poles.It's wild mix that seems to work for 3M though, giving the company something to sell regardless of the economic environment.The clincher: 3M has managed to pay and increase its dividend every year going all the way back to 1977. Walmart (WMT)Dividend Yield: 1.88% Year-to-date gain: 21%Yes, the advent of Amazon.com, Inc. (NASDAQ:AMZN) has proven problematic for the world's biggest retailer, Walmart Inc (NYSE:WMT).Source: Shutterstock Rumors of Walmart's death at the hands of Amazon, however, have been greatly exaggerated.After being knocked over a few years ago, the company has regrouped, having figured out a way to fight the ever-growing reach of its online rival. The evidence? Last quarter's revenue, excluding currency fluctuations, jumped 2.9%. * 10 Cheap Dividend Stocks to Load Up On While it has been an ugly battle at times, Walmart has finally learned how to compete with Amazon.com. The fact that it can leverage its stores to do so only bolsters the bullish case. Southern Co (SO)Dividend Yield: 4.49% Year-to-date gain: 30%No list of stocks to buy and hold forever would be complete without a utility stock. In good times and bad, consumers almost always pay their electricity bill.Source: Shutterstock And, even though margins are thin and power providers don't have a ton of pricing power, they have little competition in most markets. Most requests for rate hikes are also approved without question.To that end, Southern Co (NYSE:SO) is one of the top picks of the litter.Southern serves nine million customers, mostly in the south, although it's represented in most of the major regions of the United States. More important, Southern Co has dished out stunningly consistent (even if tiny) profit growth, setting the stage for equally consistent dividends. It has not failed to increase its annual payout since the late 90's. Johnson & Johnson (JNJ)Dividend Yield: 2.9% Year-to-date gain: 1.15%As advanced as we've become as a society, the need for medicines, surgical products and simple healthcare solutions like Band-Aids and Tylenol is never going to go away.Source: Shutterstock That means Johnson & Johnson (NYSE:JNJ) -- which maintains a bigger product portfolio than most investors realize -- will always have something to sell to someone.That being said, don't think for a minute that a play on J&J is capitulation in the search for respectable growth. The company isn't just about treating tummy troubles and selling no-tears baby shampoo. * 10 Cheap Dividend Stocks to Load Up On It still operates a pharmaceutical arm as well, with its pharma operational revenue jumping 4.4% year-over-year last quarter, Berkshire Hathaway (BRK.B, BRK.A)Dividend Yield: N/A Year-to-date gain: -2%If the Warren Buffett mindset is the underlying philosophy in play here, why not go straight to the source and buy a piece of the fund he built from the ground up? That's Berkshire Hathaway Inc. (NYSE:BRK.B, NYSE:BRK.A).Source: Shutterstock Sure, in his most recent letter to shareholders, the Oracle of Omaha said he's struggling to find new companies at a "sensible purchase price," which is the life-blood of the organization's growth. There's also the stark reality that the 87-year-old Buffett is increasingly less involved with Berkshire Hathaway. That separation is only going to widen as time marches on.Still, he has more than proven his way works for the long haul. Over the course of the past half-century, Berkshire stock has performed about twice as well as the S&P 500 has. Waste Management (WM)Dividend Yield: 1.73% Year-to-date gain: 33%There's an old adage … the only two sure things in life are death and taxes.Source: Shutterstock It's a humorous point about the limited nature of human life and the far-reaching power of the IRS. But, it's not necessarily a complete cliche. There's a third certainty. That is, as long as people are living on the planet earth, they'll be creating garbage to shuttle to their nearby landfill. Some of the best stocks to buy and hold are companies that haul that garbage away.Enter Waste Management, Inc. (NYSE:WM), which runs garbage-pickup services for 21 million North American customers. Although its top and bottom lines ebb and flow, the bigger trend for both is pointed upward. * 10 Cheap Dividend Stocks to Load Up On Look for more of the same too. As CEO Jim Fish pointed out last year, "The babyboomers are coming into a period of heavy medical spend. All of our parents are aging and spending more on medical spend. There is medical waste generated from that, we are in that business. The industrial economy is important to us.Whether it's through repatriation from the new tax law, or just through the fact the U.S. and Canada are great places to do business and the industrial economy is showing some signs of life, we are a big industrial player on the back-end of the cycle." American Water Works (AWK)Dividend Yield: 1.61% Year-to-date gain: 37.4%Perhaps just as certain as death, taxes and the creation of trash, as long as people are alive they're going to need water to survive. That puts a water utility name like American Water Works Company Inc (NYSE:AWK) in the catbird seat. Reliability and demand make water utilities safe stocks to buy when others seem sketchy.Source: Shutterstock Much like electricity providers Southern Company, American Water Works Company -- which offers water and sewer services to 15 million people in the United States -- is rarely told no when it wants to raise rates.Water service prices have risen at above-inflation rates for the past several years, and American Water Works Company has benefited from that industry-wide trend. It's not apt to change anytime soon. Colgate-Palmolive (CL)Dividend Yield: 2.40% Year-to-date gain: 21%Last but not least, while the purchase of things like cars are cyclical, and the automobile industry itself is subject to constant reinvention, there are some consumer goods people just buy over and over again without a second thought. When it comes to the best stocks to buy and hold, you just can't forget consumer staples.Source: Shutterstock Among those often-repurchased items are Colgate toothpaste, Palmolive dish soap, Speed Stick deodorant and Cuddly fabric conditioner.Yep, they're all made by Colgate-Palmolive Company (NYSE:CL), though they're only a small sampling of the brands you'll find under the company's umbrella. * 10 Cheap Dividend Stocks to Load Up On Those who know the Colgate-Palmolive story well will know the company has gotten into some sloppy spending habits, crimping margins more than most shareholders would like. That's starting to change, however, with a serious and rather impressive cost-cutting initiative. The benefits of that work could last years, if not decades.As of this writing, James Brumley hold a long position in AT&T. You can follow him on Twitter, at @jbrumley. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * 7 Stocks to Buy for June * 7 Stocks to Buy From One of America's Best Pension Funds * 4 Consumer Staples Stocks for Both Income and Growth The post 10 Best Stocks to Buy and Hold Forever appeared first on InvestorPlace.