Sometimes, it’s easy to get carried away in a market that continues to rise. It makes investors start to think that it’s hard to go wrong, even with bad stocks. That even if you get a bad stock, it’s simply going to do slightly worse than a good stock. Or, the downside won’t be as harsh and you can get out before you’re sitting on a worthless position.
But that’s not the case.
The quality stocks are the ones that are leading this rally. Much of this rally is built off companies that have found a way to build their brands into the big trends powering this market forward.
Also remember that what goes up, must come down. Quality companies will suffer less when the market corrects, so you have less trouble making up for any naturally occurring downside.
These are the top 10 best stocks to buy for 2018 and they are perfect examples of what I’m talking about.
Best Stocks to Buy Right Now: NutriSystem
NutriSystem Inc (NASDAQ:NTRI) stock has been on a tear this year for any kind of company, much less a weight management company.
It has finally hit on a system that is no longer strictly focused on dieting. It has successfully changed its brand to one of nutrition, which means there’s less stigma attached to customers. They’re not trying to lose weight as much as trying to eat healthier.
And it has paid off.
What’s more, NTRI has become very tech-friendly. Its website is engaging and allows customers more options to their meal plans, which helps success rates and feeds back to NTRI’s top and bottom lines. Its 1.2% dividend doesn’t hurt either.
Best Stocks to Buy Right Now: Netflix
Netflix Inc (NASDAQ:NFLX) stock has done very well so far this year — up 57% so far. But for NFLX stock, that looks like bad year, given the fact that the company has an average annual return for the last 5 years of 388%.
But there’s no reason for concern that NFLX stock may only be doing a fraction of that since the company now sports a market cap of $83 billion. It’s hard to move a ship that big as fast as it was going when it was smaller.
Just this week NFLX announced it was raising subscription prices for existing and new members. That will certainly boost its earnings and help fund its successful original content business.’
Plus, with its growing number of international subscribers, it can cross-pollinate content (put shows in markets other than their local one), which leverages this growing asset.
Best Stocks to Buy Right Now: AGCO Corp.
AGCO Corporation (NYSE:AGCO) has built itself into a major player in the agricultural parts and equipment sector. Since 1990, it has set about to acquire agriculture equipment firms or divisions of larger companies, and build a one-stop shop for farmers around the world.
And it’s not just tractors and combines and attachments, but also feed storage and distribution equipment for poultry and livestock as well.
As a matter of fact, 57% of its global sales come from Europe and the Middle East, where it has 930 dealerships. The US makes up 24% of global sales, with 1390 dealerships.
This is smart strategy since in the US it has to compete with gigantic, established players and larger factory farms, whereas in Europe, the farms are smaller and the business model allows AGCO’s familiar brands to stand out.
As the global economy continues to recover, AGCO stock will grow along with it.
Best Stocks to Buy Right Now: Heritage
Heritage-Crystal Clean Inc (NASDAQ:HCCI) is an interesting niche environmental services company with the smallest market cap of the group – a mere $428 million.
First, that means you need to make sure you don’t chase it too far from its current price. HCCI stock is up 45% in the past 6 months, due to the reviving US economy, especially the manufacturing and automotive sector. It’s just off its 52-week highs, so this is a good entry point.
Second, it is small enough that it has plenty of growth ahead of it, especially as the economy kicks back in.
HCCI cleans parts and manages liquid filtering, storage and disposal for companies ranging from car repair shops to aerospace defense companies. Given the rise in defense spending, this is a great way to get in without paying a premium for the big defense stocks.
Best Stocks to Buy Right Now: Aerojet
Aerojet Rocketdyne Holdings, Inc. (NASDAQ:AJRD), aside from having one of the coolest names in the aerospace sector, is a very interesting niche player in a dynamic sector in a long-term growth industry.
And AJRD stock reflects that, up 93% year to date.
AJRD makes propulsion systems for the aerospace and defense sector. That means anything that has some sort of rocket propulsion is likely a AJRD system. For example, the Terminal High Altitude Area Defense (THAAD) missiles that were recently deployed to South Korea to protect against North Korean missiles have AJRD motors and systems on board.
In a dangerous world, this is a good business to be in. Also, given the new space race underway, AJRD will have a lot of new clients as well.
Best Stocks to Buy Right Now: China Lodging (HTHT)
China Lodging Group Ltd (NASDAQ:HTHT) is fast becoming the Marriott of China. With more than 3,500 hotels under its control – either franchised or ‘manachised’ (both managed and franchised) – it continues to grow at a rapid rate.
Revenue continues to grow, as do earnings at a very healthy clip. And the key indicator of hotel success – RevPar growth (revenue per average room) is also in double digits.
Given the fact that its operations are already significant, its market cap of $9 billion is relatively small. That means there’s plenty of headroom for more growth in coming quarters.
What’s more, after HTHT stock has soared nearly 150% this year, its PE is only 64. It’s still under the radar.
Best Stocks to Buy Right Now: Arista (ANET)
Arista Networks Inc (NYSE:ANET) stock is one of those tech firms that may not be one of the first ones you think of when you think dominant tech players, but it should be. ANET is a relatively young company that hit the scene at the perfect time.
It makes switches and similar equipment for cloud computing operators. The thing is, it’s focus is one cloud computing unlike legacy server and hardware makers that are still doing workarounds with their systems to make them “cloud-friendly”. ANET is already there.
And given that the cloud is the next great leap forward for our digital age – it makes sectors like Big Data, mobile computing and Internet of Things possible – ANET stock’s future is very bright indeed.
Best Stocks to Buy Right Now: Green Bancorp (GNBC)
Green Bancorp Inc (NASDAQ:GNBC) stock has done very this year considering many of its branches were submerged when Hurricane Harvey hit Texas. GNBC is a regional Texas bank that has grown from 5 offices in 2007 to 22 offices today.
This is a regional bank that stuck to its knitting during the excesses that brought down the global economy in 2008. And it was well positioned to weather the storm that happened later. It was also well positioned to take advantage of its relative strength in the aftermath and use it to its advantage.
Regional banks were the first to rebound from the Great Recession and the best of them are continuing to grow operations and profitability.
Up 55% year to date, GNBC stock remains in a healthy growth mode. Its $878 million market cap means it has good size for a regional bank and the Texas economy is one of the hottest in the nation.
Best Stocks to Buy Right Now: Logitech (LOGI)
Logitech International SA (USA) (NASDAQ:LOGI) stock is up a respectable 43% so far this year, but never really gets much bullish press. For investors, that’s a good thing since it means the stock is usually not overpriced, yet it continues to grow in a significant growth sector.
Two things may be at play here.
First, it’s a Swiss company. That means, while its computer peripherals – keyboards, speakers, gaming equipment, etc – are well known, the company doesn’t have a “face” to its name.
Second, because there are so many cheap knockoffs for keyboards and speakers and mice, analysts assume that a company that specializes in these things can’t continue to grow at decent rates.
But not all consumers in the 100 countries it sells into want cheap knock-offs. Many want the name brand peripherals, sometimes because reliability is important because they don’t have a Best Buy around the corner if their cheap mouse breaks.
Just bear in mind that this underrated company has averaged about 55% returns for the past 5 years, so it is executing well on its long-term plan.
Louis Navellier is a renowned growth investor. He is the editor of five investing newsletters: Blue Chip Growth, Emerging Growth, Ultimate Growth, Family Trust and Platinum Growth. His most popular service, Blue Chip Growth, has a track record of beating the market 3:1 over the last 14 years. He uses a combination of quantitative and fundamental analysis to identify market-beating stocks. Mr. Navellier has made his proven formula accessible to investors via his free, online stock rating tool, PortfolioGrader.com. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.