Ed. Note: This is the first update to the “10 Best Stocks for 2015,” where 10 stock market experts picked the stock they believe will post the highest returns for the calendar year.
The S&P 500 Index has now rallied for six consecutive calendar years, rising successively from 2009 to 2014. But this year, things are starting a little differently. All three major U.S. indices are down year-to-date, and concerns about global growth are dragging on the markets.
Fortunately, the 10 Best Stocks for 2015 have been largely insulated from this sluggishness: six of the 10 Best Stocks for 2015 are in the money already, and one in particular has soared more than 60% to date.
As a whole, a portfolio consisting of our Best Stocks for 2015 would have returned an incredible 7.7% already this year, dramatically better than the S&P’s 0.5% year-to-date losses.
Without further ado, here are our experts’ picks, arranged in order of YTD returns.
(Returns are through Tuesday, February 3.)
Best Stocks For 2015: #1 — Rave Restaurant Group Inc (NASDAQ:RAVE)
YTD Performance: +57%
Investor: Rick Rouse
It was a prescient choice.
On January 7, 2015, Pizza Inn Holdings changed its name and ticker symbol to Rave Restaurant Group Inc (NASDAQ:RAVE). The name change reminds investors that Rave stock isn’t just Pizza Inn, but also the fast-growing Pie Five Pizza Co., a wildly successful fast-casual pizza joint.
On January 8, the freshly named Rave announced fiscal second quarter results, which boasted a 6.4% same-store sales increase at Pizza Inn and a retail sales increase of 118% at Pie Five.
Best Stocks For 2015: #2 — Ambarella Inc (NASDAQ:AMBA)
YTD Performance: +12%
Investor: Jon Markman
It might seem gutsy to believe Ambarella Inc (AMBA), a stock that is up nearly 60% this year, will be one of the best stocks of 2015, but that’s exactly what I expect out of this under-the-radar gem.
The trend has been Ambarella’s friend, as AMBA stock is already up another 12% this year even after the meteoric gains it posted in 2014.
While primarily known as the company that makes the durable, low-energy video compression chips inside GoPro Inc (NASDAQ:GPRO), Ambarella is actually quite diversified. With about 45% of Ambarella’s business coming from the internet-connected security market and plenty of potential in 4k video and rearview camera technology, AMBA boasts some attractive avenues for growth.
Best Stocks For 2015: #3 — Noble Corp plc (NYSE:NE)
YTD Performance: +8%
Investor: John Jagerson and Wade Hansen
The editors of Slingshot Trader, John Jagerson and Wade Hansen, made a bold call when they looked to the energy sector for their pick in the 10 Best Stocks for 2015 competition. At the time, oil prices were plunging, heading for $50 a barrel for the first time since the financial crisis.
Well, you know how the phrase goes: “Fortune favors the bold.”
By tapping Noble Corp plc (NYSE:NE) as their submission into the Best Stocks of 2015 contest, Jagerson and Hansen went out on a limb. But their audacity is already reaping rewards: oil prices have staged a modest rebound and NE stock’s 8% YTD gains make it the third-best performer through early February.
Best Stocks for 2015: #4 — Apple Inc. (NASDAQ:AAPL)
YTD Performance: +7.5%
Investor: Louis Navellier
Investing savant Louis Navellier — editor of the Blue Chip Growth and Emerging Growth stock market newsletters — donned Apple Inc. (NASDAQ:AAPL) the premier stock in the market for 2015, making it his pick for the annual Best Stocks competition.
AAPL, it could be argued, initially came off as another perplexing pick from our experts. After all, the stock had gained an unthinkable 2,394% in the 10 years prior. Already the biggest in the world, and with analysts projecting gaudy, unprecedented iPhone sales in the fourth quarter, AAPL entered 2015 needing to prove just how dominant it was.
Best Stocks for 2015: #5 — ABM Industries, Inc. (NYSE:ABM)
YTD Performance: +5%
Investor: Hilary Kramer
Veteran investor Hilary Kramer dubbed ABM Industries, Inc. (NYSE:ABM) her pick for the 10 Best Stocks for 2015 competition. The $1.7 billion building maintenance company might not seem like the most obvious pick, but hey, good picks are rarely obvious.
Ever mindful of the market’s six-year bull run, and with the volatility in energy prices raising concerns, Kramer chose to take a more conservative approach, saying:
“It makes sense to look for a company with growing earnings that is reasonably valued when a lot of valuations are still somewhat stretched.”
She went on to choose ABM Industries, which at the time paid a 2.3% dividend yield. After recent gains it now pays 2.1%, but Kramer notes that a solid history of earnings growth also hints strongly that EPS numbers could surprise us this year.
Best Stocks for 2015: #6 — Prospect Capital Corporation (NASDAQ:PSEC)
YTD Performance: +2%
Investor: Charles Sizemore
The 2011 and 2013 winner of InvestorPlace’s Best Stocks contests, Charles Sizemore, is hungry for the throne once more.
Sizemore’s strategy differs from most of his competitors’ in that his pick easily pays the highest dividend of any entrant in the 10 Best Stocks for 2015 contest. Prospect Capital Corporation (NASDAQ:PSEC) currently pays a whopping 12% dividend yield.
Makes sense, when you consider his market outlook for this year:
“I don’t expect much from U.S. equities in 2015. It’s not that I’m a bear — I’m not — but valuations look stretched, and U.S. stocks are priced to deliver flattish returns over the next 5 to 7 years.”
Hopefully the market doesn’t crater this year, but if it does — or even if it goes sideways — PSEC could be in the running for Best Stock of 2015.
Best Stocks for 2015: #7 — Google Inc (NASDAQ:GOOG)
YTD Performance: +0.5%
Investor: Paul R. La Monica
Apple might be in the top three competitors, but rival Google Inc (NASDAQ:GOOG) is lurking among the pack. Paul R. La Monica, Assistant Managing Editor of CNNMoney, choose the internet behemoth as his pick for the 10 Best Stocks for 2015 list.
Reasoning that Silicon Valley peers like Apple, Facebook Inc (NASDAQ:FB), Microsoft Corporation (NASDAQ:MSFT) and others all had phenomenal years in 2014, La Monica felt leaving Google out of that group was downright criminal.
Taking a self-professed “contrarian” stance, he argued that if anyone ever deserved the benefit of the doubt, the trio of Larry Page, Sergey Brin and Eric Schmidt did.
GOOG stock is up just about 0.5% thus far this year. Now that’s not anything to write home about, certainly, but it’s a full percentage point better than the S&P’s negative YTD return. It’s still got plenty of time to be one of the best stocks of 2015.
Best Stocks for 2015: #8 — iShares Dow Jones US Oil Equip. (ETF) (NYSEARCA:IEZ)
YTD Performance: -3%
Investor: David and Michael Fabian
David and Michael Fabian, who jointly serve as managing partners at FMD Capital Management — an investment advisory firm with a focus on funds — chose iShares Dow Jones US Oil Equip. (ETF) (NYSEARCA:IEZ) for their entrant into the 10 Best Stocks for 2015 contest.
Although currently sitting in the eighth slot, IEZ could easily start rallying now that oil prices have kicked higher from the $45/barrel level in the last week. IEZ, an ETF, doesn’t actually aim to own the oil producers themselves, but the companies providing ancillary services to the producers.
Believing strongly that a comeback in oil prices will send the equipment and services industry rocketing higher, I wouldn’t be surprised to see IEZ come from behind and win the Best Stocks for 2015 competition.
Best Stocks for 2015: #9 — Old Dominion Freight Line (NASDAQ: ODFL)
YTD Performance: -9%
Investor: Mike Turner
Mike Turner, editor of investment newsletters Signal Investor and Turner Analytics, focuses on rule-based trading and cycle-based forecasting. In that vein, he picked Old Dominion Freight Line (NASDAQ:ODFL) to be the stock market’s top performer in the 10 Best Stocks for 2015 competition.
The trucking and logistics company should be a big beneficiary from lower oil prices, Turner says:
“The rise in ODFL’s price over the past three years has been accomplished with crude oil in the $80 to $100-plus range. The current move into the low $60s will be a huge benefit for ODFL and other truckers. And should the price of crude oil rise, it will not have a great impact on its stock price, as Old Dominion will be able to pass along a fuel surcharge to their customers.”
While ODFL is off about 9% thus far this year, we’ve still got nearly 11 months left, and with ODFL set to report fourth-quarter earnings on Thursday, February 5, I wouldn’t count this one out just yet. There’s no rule against the 10 Best Stocks for 2015 winner being an underdog.
Best Stocks for 2015: #10 — Yahoo! Inc. (NASDAQ:YHOO)
YTD Performance: -12%
Investor: Greg Harmon
Options investor and veteran trader Greg Harmon chose Yahoo! Inc. (NASDAQ:YHOO) as his pick for the 10 Best Stocks for 2015 contest. Harmon, in his article explaining his pick, said that Yahoo doesn’t need Alibaba Group Holding Ltd (NYSE:BABA) to fuel further gains, something YHOO relied upon for most of 2014.
Instead he points to a “mosaic of technicals” that indicate YHOO stock is in prime position to mount a comeback. Unfortunately, Yahoo does still own a meaningful chunk of Alibaba stock, so recent allegations that BABA was selling fake goods on its websites hit YHOO too.
As the hubbub dies down, expect technicals to once again play a bigger role in YHOO’s stock price.
As of this writing John Divine owned shares of GOOG stock, GOOGL stock, AAPL stock, and was long Jan 2016 $25 AMBA calls. You can follow him on Twitter at @divinebizkid.
More From InvestorPlace
- 3 Deep-Discount Energy MLPs to Buy Today
- 4 Types of MLP ETFs for Income Investors
- 5 Stocks That Are WAY Ahead of the Curve