The Thanksgiving holiday — a time for investors to take time off to be with family and friends, celebrating all that we have to be thankful about. But it’s also a time to begin thinking about the winning stocks to buy for 2019.
After a month like October that saw the S&P 500 lose 7%, there are certainly a lot more stocks to consider given the pullback. By comparison, November has been roughly flat so far.
When planning for 2019, it makes sense to consider stocks to buy that have momentum heading into the final six weeks of the year. So, I would recommend stocks that are up 20% over the past month.
According to Finviz.com, there are 145 stocks with a market cap greater than $2 billion that are up 10% over the past month. Here are my seven winning stocks to buy heading into 2019 from that group.
Canada Goose (GOOS)
If you own Canada Goose (NYSE:GOOS) stock, you’re no doubt pleased with the company’s returns both in 2018 and halfway through November. Of course, when you’re blowing through analyst estimates and raising your guidance for the year, you’re bound to get a nice updraft in your stock price.
In the second quarter, which ended Sept. 30, Canada Goose had revenue of CAD$230.3 million and an adjusted profit of CAD$0.46 a share. Revenues were up 34% year over year while adjusted earnings per share were up 59% in the quarter.
More importantly, Canada Goose raised its revenue growth for the year from 20% to at least 30% and adjusted earnings per share growth of 40%, 15 percentage points higher than its earlier guidance.
Equally exciting, Canada Goose announced on Nov. 14 that it’s getting into footwear, acquiring Canadian-based Baffin for CAD$32.5 million.
A triple-threat business with wholesale, retail and e-commerce, Canada Goose is easily one of the top three stocks to buy in North American apparel.
Okay, so Tesla (NASDAQ:TSLA) stock isn’t tearing it up in 2018 like Canada Goose, but the fact that it’s up for the year is great news for longtime shareholders. After all, it was trading as low as $252 as recently as Oct. 22, 29% lower than today.
That’s what I’d call a recovery.
There’s no doubt that 2018 has been a trying year for the company, but Elon Musk is both a visionary and resilient as all get out, two characteristics necessary to deliver new technology to the world.
“Tesla certainly endured a summer of discontent, what with its troubled Model 3 launch and CEO Elon Musk’s failed go-private scheme and subsequent SEC action and fines,” wrote Business Insider’s Matthew DeBord on Nov. 17. “But the company snapped its season of self-inflicted bad luck in time to turn a rare profit in the third quarter. As it turns out, the timing was excellent, given the impending tech-industry meltdown.”
Indeed it was.
I’ve had my doubts about whether Elon Musk could bring Tesla to the promised land without having a breakdown; he’s proven me wrong and that’s great news if you own TSLA stock.
Heading into 2019 on a high, TSLA stock might be the best investment you can own at this point in the bull market.
Noah Holdings (NOAH)
Noah Holdings (NYSE:NOAH) is a Chinese wealth management company. It’s also one of my favorite Chinese stocks. I’ve been recommending NOAH regularly since 2013.
“In Q2 2018, the company’s ‘Other Financial Services’ grew by 73% to $6.9 million. While that pales in comparison to its wealth management and asset management segments, it’s the future potential of services such as lending and online trading that’s got my attention,” I wrote on Nov. 9. “Eventually, I could see a business that act’s like a three-legged stool, with each division delivering profitable growth.”
The fact is, as China continues to grow, whether we’re talking 8% or 3% GDP growth, Chinese affluent and near-affluent are going to need financial advice.
Noah Holdings has $24.4 billion in assets under management, a network of 1,495 relationship managers, and 287 branches spread across China serving more than 220,000 clients.
As long as China doesn’t give up on some form of quasi-capitalism, Noah Holdings will continue to be a reliable long-term play in my opinion.
HMS Holdings (HMSY)
Businesses that make or save people time or money, as a rule, tend to do well. HMS Holdings (NASDAQ:HMSY), a Texas-based data analytics company that helps save big health plans billions of dollars annually, is no exception.
HMS announced its Q3 2018 earnings report November. Revenues were up 5.1% from Q2 2018 and 22.8% from Q3 2017. Regarding adjusted earnings per share, HMS had sequential growth of 24.0% and year over year growth of 63.2%.
”The record third quarter revenue reflects progress we have made throughout the year on a number of growth initiatives related to our coordination of benefits and payment integrity offerings, as well as the important contribution of our new care management and consumer engagement products,” stated Bill Lucia, chairman and CEO.
Is it any wonder then that HMS stock is up 119% over the past year and 108% year to date? It sure isn’t.
As a result of the strong results announced in early November, HMS raised the low end of its revenue guidance for the year by $20 million to $595 million while increasing the top end by $15 million to $600 million.
If you’re looking for a healthcare stock to bet on in 2019, HMS ought to be at the top of your list.
If you live in China and you’re looking to buy a car or truck, new or used, Autohome (NYSE:ATHM) is the information provider to help you make that decision.
Autohome went public in December 2013 at $17 a share. If you bought its stock in the IPO and are still holding, you’re up 327% in the five years since.
I’ll take that kind of return every day of the week and twice on Sundays. Interestingly, Telstra Corporation (OTCMKTS:TLSYY), the Australian telecom company that took it public, sold much of its stock for $1.6 billion in April 2016. Today that would be worth almost three times as much.
However, don’t feel sorry for Telstra. It paid less than $76 million for 55% control of Autohome’s parent back in 2008. As for Autohome itself, its business is doing splendidly.
In Q3 2018, announced Nov. 12, Autohome’s revenues were 34% higher year over year to $275 million while adjusted earnings rose 55% to 90 cents a share. It finished the third quarter with 279 million mobile users, 48% higher than a year earlier.
As I said earlier in November, Autohome might be the best Chinese stock to buy on recent weakness.
Fox Factory (FOXF)
November Return: 40.0%
Back then, the maker of bike, ATV and motocross shocks was owned by Compass Diversified Holdings (NYSE:CODI), a Connecticut-based investment company that’s part private equity, part asset manager, definitely patient capital.
While Compass Diversified did well on its investment in Fox Factory — it initially invested $78 million — today, if it had hung on to its 19.6 million shares after the IPO, they would be worth $1.4 billion. That’s about half the holding company’s current market cap.
Would’ve. Could’ve. Should’ve.
Fox Factory announced its Q3 2018 results Oct. 31. They were solid with revenues up 38% in the quarter while adjusted net income rose 56% in the quarter.
Investors liked the results, pushing FOXF stock up 18% on the news. It’s now up 32% since Oct. 31 as investors get on board what could be the best momentum play of these seven stocks in 2019.
Newell Brands (NWL)
My rationale for buying it was that it was oversold with a relative strength index (RSI) of 21 and numerous interesting investments, including a significant stake in Newell Brands (NYSE:NWL), a company that owns Rubbermaid and many others, that’s lost its way.
Carl Icahn has a way of shaking up establishment CEOs and boards to the point where changes are made to extract value for shareholders. In the case of Newell Brands, Icahn brokered a truce between fellow activist investor Starboard Value, himself, and the company.
That was in April.
Although Newell’s board has yet to replace CEO Michael Polk, who has delivered woeful returns since becoming CEO in July 2011, its latest quarterly report released Nov. 2 was much better than analysts were expecting, hence the 36% return in November.
As long as Carl Icahn’s a significant shareholder, NWL has a good chance in 2019.
As of this writing Will Ashworth did not hold a position in any of the aforementioned securities.