10 Best Stocks for 2019: The Race Is On
We’ve reached the end of the first quarter, and the theme for the Best Stocks contest seems to be unpredictability. Pot stocks were hot, value stocks were not. The headlines changed from week to week, and even beat-and-raise earnings weren’t always enough to propel a stock forward.
All of this has meant a good deal of shuffling among the contestants over the first three months, and one stock getting out to an astounding lead by the end of March. Which one? Well, read on and find out.
The Best Stocks contest entries are listed below in ascending order of gains as of the end of trading on March 29. Those gains include the dividends, where applicable. And if you want to keep up-to-date on the contest between these quarterly updates, feel free to follow along at our Best Stocks for 2019 leaderboard, which is regularly updated so you can see who’s rising and who’s falling.
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But now, without further ado, on to the contestants.
Syrah Resources (SYAAF)
Investor: Eric Fry
Year-to-Date Change Through Q1: -28%
Syrah Resources Ltd. (OTCMKTS:SYAAF) is an all-or-nothing sort of stock pick for a contest like this. SYAAF is set up for long-term growth thanks to the ubiquity of graphite — the main focus of this Australian company.
Graphite is used in a whole lot of the batteries that are going to power our future, including those for electric vehicles. But the company is also a one-mine operation and that mine is in Mozambique, meaning that in the short term, it can have more than its share of volatility.
And that volatility has hit hard to the downside so far in 2019, with disappointing earnings sending the stock tumbling.
That doesn’t have to define the whole year for SYAAF, but the company must show serious improvement to win back investors’ trust. As Fry wrote, “Previously, Syrah had forecast that it would produce positive cash flow from its operations by the back half of 2019. But words are cheap. The company must deliver on that forecast if it expects to retain the trust and interest of shareholders.â€
Read more about SYAAF from Fry here.
LyondellBasell (LYB)
Source: Via LyondellBasell
Investor: Charles Sizemore
YTD Change: 2%
LyondellBasell Industries (NYSE:LYB) is a value stock, and this set of market circumstances just aren’t being kind to value stocks. People are riding the continued strength on the back of growth stocks instead. But that doesn’t mean LYB stock is a bad security to be invested in. It just means that it’s poised for a shift in sentiment.
Now, will that happen in time to help with this year’s Best Stocks contest? As Sizemore points out, there are no guarantees. “While I believe that value stocks are ‘due’ for an extended period of outperformance, I could have made the same argument at any time over the past several years, and I’d still be waiting for the reversal,†he wrote.
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But even if it just keeps up modest growth, there’s still LYB stock’s 4.4% dividend yield to keep in the back of your mind — or put in your back pocket. And if sentiment turns back to value stocks, LYB could be in for a massive surge.
Read more about LYB from Sizemore here.
Weibo (WB)
Source: Shutterstock
Investor: Kyle Woodley
YTD Change: 6%
The thesis behind picking Weibo (NASDAQ:WB) for the 2019 Best Stocks contest was simple — good Chinese stocks took a beating in 2018 thanks to the U.S.-China trade war, and that made companies like Weibo excellent rebound candidates. As Woodley wrote, “A quick refresher: Weibo shares hemorrhaged 43.5% in 2018 — a year in which the company also grew revenues by 49% year-over-year and net income by 54% year-over-year.â€
It’s a sound thesis, but one that hasn’t yet borne fruit in the first quarter. Part of that has to do with the still-fraught relationship between China and the U.S. And both Weibo and Sina (NASDAQ:SINA), which owns about 46% of WB stock, posted earnings beats in March, but both of the stocks fell hard after earnings, with Weibo off over 10% at one point that day.
Why? As Woodley pointed out, “If you’re going to pick Weibo apart on anything — and investors certainly did, considering the sharp selloff after its Q4 report — it might be the company’s revenue forecast. WB is looking for Q1 sales growth of 20.5% to 23.5%, which doesn’t sound like much compared to Q1 2018’s 76% jump in revenues.â€
But … that was really it. WB stock still looks strong, it just needs a nudge to start growing again.
Read more about WB from Woodley here.
Canada Goose (GOOS)
Source: Shutterstock
Investor: Will Ashworth
YTD Change: 10%
Canada Goose (NYSE:GOOS) was flying pretty high at one point in this quarter, before a downgrade from Wells Fargo shot it down.
“The company itself continues to do well heading into 2019’s second quarter. GOOS stock was doing fine through the end of February, trading above $57, putting my pick solidly in third place in InvestorPlace’s 2019 stock picking contest,†Ashworth wrote. “But oh, what a difference a month can make.â€
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But things haven’t completely soured for Canada Goose. It’s still a sought-after brand name and its most recent earnings were a double beat and raise. GOOS stock still has plenty to offer investors in 2019.
Read more about GOOS from Ashworth here.
Teladoc (TDOC)
Source: MayApps207 via WikiMedia
Investor: Jason Moser
YTD Change: 12%
Virtual healthcare company Teladoc Health (NYSE:TDOC) really charged into 2019.
The TDOC stock price stumbled a bit after earnings in February. It wasn’t the hard numbers that were a problem for investors — they just weren’t too keen on the guidance, which was below analyst expectations.
But things are still looking up for Teladoc, as the trend is going its way. As Moser points out:
“Virtual healthcare and telemedicine are happening; it’s no longer a matter of if but when, and Teladoc has done a lot to grow and diversify the business in a relatively short amount of time. One could also say that this business played an integral role in actually helping shape the legislation that is allowing virtual healthcare to become a part of the global healthcare landscape.â€
And with Medicare Advantage 2020 set to add tens of millions of new potential clients to its rolls, there’s still plenty of room for TDOC stock to run even higher.
Read more about TDOC from Moser here.
Adobe (ADBE)
Source: Shutterstock
Investors: John Jagerson and Wade
Hansen
YTD Change: 18%
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