Welcome to the final quarter of the Best Stocks for 2018 contest. Tariff headlines have kept the markets uncertain for the last couple of months, but that headwind has not been able to put much of a damper on the front runners. You’d probably be happy to have the nine-month returns of the first few stocks in the running.
So, how have things shaken out? The front of the pack still looks pretty similar, though there is one stock that took a pretty hard fall. Another couple names have continued to suffer really hard luck. And a couple companies have really started to take off in the second half.
There’s one quarter left, but the pack is going to need some help to catch up with the leader.
Without further ado, here are the 10 contest entries, in reverse order after nine months.
Best Stocks Contest No. 10: Market Vectors Rare Earth Strat Met ETF (REMX)
Year-to-Date Change Through Q2: -33%
Investors: John Jagerson and Wade Hansen
It’s still tough to understand exactly why the Vaneck Vectors Rare Earth Strategic Metals ETF (NYSEARCA:REMX) is having such a difficult time. The demand for rare earth metals should only be going up, but trade issues with China are keeping REMX down.
Now, things could be turning around. In the last month, REMX has seen a bit of a surge after hitting a 52-week low of $18.41 on Sept. 11. It this a bottom? A lot will probably depend on how the trade war fears shake out.
No. 9: J M Smucker (SJM)
YTD Change: -16%
Investor: Hilary Kramer
J M Smucker Co (NYSE:SJM) is another company that has gotten beaten up this year. While the fall hasn’t been as precipitous as REMX’s, it has been hard to ignore.
Part of the problem undoubtedly continues to be a push toward fresher, healthier food by consumers. Highlighting the issues, the company missed on both the top and bottom line in August, putting a hard end to an attempt at a rally that had started in June.
Impressing on its next earnings release in November could get the stock back on the right track, making this a great time to get in.
No. 8: Enterprise Products Partners (EPD)
YTD Change: 15%
Investor: Charles Sizemore
Enterprise Products Partners (NYSE:EPD), with its 15% gains so far this year and its 5.8% dividend yield, is certainly not a slacker. It’s better than the S&P 500 and despite some indecisive price movement lately, still looks like an interesting stock to consider.
In addition to the specific reasons to believe in EPD, there are some market-wide factors to consider. For instance, as Sizemore wrote:
“Growth stocks have dominated value stocks since 2009, but that trend will not last forever. Value and income stocks will enjoy a nice run of outperformance — and when they do, Enterprise Products will be a major beneficiary.”
If you believe that energy stocks have further to run, EPD may be worth a look.
No. 7: Twitter (TWTR)
YTD Change: 21%
Investor: Jason Moser
Of all of the stocks in the contest this year, Twitter (NYSE:TWTR) has had the most precipitous fall. Why is that? Well, sometimes, what’s best for the product is not what’s best for the stock.
“The market’s concerns stem from management’s language that in continuing to focus on the health of the platform (safety, GDPR, inactives, spam, bots, etc.), it expects MAU to decline in the ‘mid-single-digit millions’ in the third quarter. It will also bump up capital expenditures to invest in infrastructure,” Moser explains.
So, Twitter is trying to clean up its platform, and that is going to eat into the monthly active users — one of the vital metrics for social media companies. But in the end, this is a move to keep the product as healthy as possible.
So while Twitter may not win the contest, it’s still well worth investors’ attention. As Moser points out, “at the end of the day we have a transparent management team building a powerful global network, and a profitable business that’s back to growing its top line; not a bad combo.”
No. 6: Mosaic (MOS)
YTD Change: 27%
Investor: Charles Payne
Mosaic (NYSE:MOS) wasn’t that great over the first quarter, but has steadily made up for that among investors who believed in its potential. Now it’s up 27% after nine months and looking for more.
Mosaic makes the potash that helps farmers around the world, and that’s a business that isn’t going away. Consumer tastes may change, but the realities of our basic need for food? That won’t.
While MOS stock may not catch up with the front runners, it’s still worth a good look. As Payne said:
“Looking forward, I think MOS has the potential to hit $40 or go even higher over the next 12 months, and I’m very excited to see what comes out when the company reports earnings on Nov. 6. I’ll be sure to cover the numbers when I share my next update.”
Moving from $33 to $40 in a year? That sounds pretty good to me.
No. 5: Nvidia (NVDA)
YTD Change: 44%
Investor: Louis Navellier
The markets made some big moves in September, and as part of that, tech stocks like Nvidia (NASDAQ:NVDA) have given back some of their recent gains. However, at the end of the day fundamentals are almost always key. And as Navellier said:
“Nvidia has been a pioneer in the technology industry for years. The company is most well-known for inventing the world’s first GPU. As the soul of a PC, GPUs are used to speed up the production of images on electronic devices. GPUs power practically everything, from supercomputers to data centers, from drones to vehicles.”
NVDA has stayed strong pretty much all year, and it should continue to show that strength into the end of the year. Analysts expect NVDA’s next earnings report to show $1.73 per share on $3.25 billion in sales — that’s 23.5% annual sales growth and 30.1% earnings growth.
Even if it can’t take the top spot in the Best Stocks contest, that’s still quite a lot to like.
Broadridge Financial Solutions (BR)
YTD Change: 48%
Investor: Matt McCall
Broadridge Financial Solutions (NYSE:BR) may have done decently in the Best Stocks contest over the first half of 2018, but it truly began to shine in the third quarter. Investors have got to be pretty happy with these returns.
In case you forgot what it does, “Broadridge, through its technology, provides investor communications and other solutions to the financial sector. It’s actually one of the pioneers in its industry and stands to benefit greatly as blockchain — the technology behind bitcoin — changes the way financial business is conducted.”
The company reported solid earnings and upped its dividend during the latest quarter. It doesn’t look likely to start letting those investors down anytime soon.
YTD Change: 58%
Investor: Kyle Woodley
Come on, be honest. If someone had asked you a year ago if Chipotle (NYSE:CMG) would be up over 50% three quarters of the way through 2018, would you have believed them? And yet, here we are, with Chipotle sitting third in the Best Stocks contest.
Chipotle has managed to stay largely clear of the health-related concerns that tanked shares in 2015. It has mostly kept its earnings surprises positive this year. And slowly, investor sentiment has returned.
Now, has CMG run as far as it can right now? It’s possible. We’re near the analyst target price, and UBS analyst Brian Bittner recently downgraded the stock, dropping it to “underperform.” We’ll get a better idea when Chipotle next reports earnings at the end of October.
YTD Change: 72%
Investor: Readers’ Choice
When asked, InvestorPlace.com readers said they expected Amazon (NASDAQ:AMZN) to be the best stock in 2018. And with gains of 72%, it sounds like our readers were on the right track. Even if AMZN doesn’t win the Best Stocks contest, it’s hard to deny the strength.
There are many reasons for this, but since I don’t think we need to rehash online retail supremacy or the gains in AWS yet again, let’s talk about something a bit newer — Amazon 4-Star.
Amazon 4-Star represents Amazon’s second foray into the world of brick-and-mortar retail, following Amazon Go. Having opened in late September, the store sells an assortment of general items with 4-star ratings or above on Amazon.com. Is it going to move AMZN stock appreciably higher? It’s impossible to know for sure, but I do know this — even if I thought 4-Star was a bad idea, it would take more than that to make me bet against Amazon.
YTD Change: 155%
Investor: Tracey Ryniec
While plenty of positions in the Best Stocks contest have changed hands throughout 2018, Etsy (NYSE:ETSY) staked its claim on first place and hasn’t relinquished it yet. It’s up well over 100% on the year and has easily doubled up (or tripled or more) the rest of the field. As Ryniec said, “No one is talking about Amazon’s Handmade site, nor are they talking about Amazon crushing Etsy anymore.”
Will it be able to hold onto that into the end of the year? Well, KeyBanc certainly thinks so. It raised its target for ETSY to $59 from $51 — upside of nearly 30% from current prices. Seasonality can be a little rough for ETSY in the fall, but it usually picks up in December.
Analysts expect around 7 cents per share when it next reports earnings on Nov. 5. But remember that when people were expecting 6-cent earnings in this same quarter last year, Etsy surprised to the upside in a big way, coming in at 21 cents. If it can manage that trick again this time, who knows where ETSY could finish the year.
Jessica Loder is an Assistant Editor at InvestorPlace.com. As of this writing, she did not hold a position in any of the aforementioned securities.