Another year, another fresh batch of contestants in InvestorPlace.com’s annual Best Stocks contest.
This year has been … “interesting.” While the economy has largely been strong, there is some disagreement about whether that strength can carry over into next year. There’s no doubt that the trade war between the U.S. and China has put the hurt on certain American companies. And the mercurial nature of President Donald Trump only injects more uncertainty.
What does that all mean for the coming year? We can only guess right now, but that’s part of what the Best Stocks for 2019 is all about — looking at where we are, then trying to extrapolate where we’re going and who is going to benefit from it.
And like usual, there’s a pretty wide spread in what our experts think will outperform, including familiar names. As parts of the market hope for higher oil prices, we see some energy stocks make the grade. Two apparel companies have also gotten a nod, along with a popular Chinese rebound stock. And an old favorite makes its third-consecutive appearance.
But there are a few names that are not just new to the contest, but may be new to many investors. Chief among these are a pot stock and a graphite miner.
Without further ado, our 10 contestants for the Best Stocks of 2019 contest are, in alphabetical order:
Investors: John Jagerson and Wade Hansen
John Jagerson and Wade Hansen — co-founders of LearningMarkets.com, as well as the co-editors of Strategic Trader — are looking to tech stocks for their Best Stocks for 2019 contest pick … but maybe not one you might expect. They’ve chosen Adobe (NASDAQ:ADBE).
The reasoning is simple: ADBE stock is set up for growth. Its products are ubiquitous — Photoshop, Acrobat and InDesign are all household names in the internet age. And now, thanks to a new business model, people who want to use those programs pay recurring fees rather than just buying the license outright.
As Jagerson and Hansen wrote, “The real engine that drove this growth has been the creative revenues. This business, which includes cloud subscription services, digital publishing suite contracts and creative contracts, grew from $3.18 billion in 2016 to $4.17 billion in 2017.”
At the same time, ADBE stock’s price-to-earnings multiple has actually been falling in recent years. Jagerson and Hansen called it “the most undervalued earnings multiple since the stock was priced at $100 per share.”
Sounds like an ideal candidate for the Best Stocks contest!
Investor: Readers’ Choice
For the third year in a row, InvestorPlace.com readers have voted for Amazon (NASDAQ:AMZN) as their choice for the Best Stocks contest.
It’s easy enough to see why. Amazon keeps sticking its nose into things, and then doing those things well enough that it disrupts the competition. It’s the king of internet retail, the elephant in the room when it comes to the cloud and a heavy hitter in the streaming space.
And its online advertising arm is a fresh focus for investors looking for growth. While it’s a little fish in the space when compared to Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) or Facebook (NASDAQ:FB), it’s growing at a pretty impressive rate.
Will it be enough to make the third time the charm?
Charlotte’s Web Holdings (CWBHF)
Investor: Matt McCall
Hemp is increasingly legal, and Matt McCall, the founder and president of Penn Financial Group and a man focused on next-generation investing, sees that fact as increasing the potential for Charlotte’s Web Holdings (OTCMKTS:CWBHF).
Charlotte’s Web offers CBD oil, which he points out is used “as an alternative to traditional pharmaceuticals to treat everything from anxiety and depression to chronic pain, inflammation and childhood epilepsy.” In fact, the entire company was founded after CBD oil helped control powerful seizures the founder’s granddaughter was experiencing hundreds of times a week.
With a changing perception of CBD and the increased legality, CWBHF could see a lot of growth ahead. As McCall said, “According to Brightfield Group, the hemp CBD market will reach $591 million this year. And by 2022, it will soar to $22 billion. That is a five-year compound annual growth rate of 132% and a 40-bagger!”
And it could well be enough to take the Best Stocks crown.
Canada Goose (GOOS)
Investor: Will Ashworth
Outdoor apparel brand Canada Goose (NYSE:GOOS) is Will Ashworth’s pick for the Best Stocks for 2019 contest thanks to its growth prospects and brand cachet.
Canada Goose balances on the typical three sources of revenue generation for — online sales, brick-and-mortar sales and wholesale offerings. And things are looking pretty good in all phases for GOOS stock.
As Ashworth pointed out, “While its wholesale business is expected to grow by high single digits in fiscal 2019, its overall revenues are projected to increase by at least 30%. Canada Goose’s revenues in fiscal 2018 were $591 million. An increase of 30% would translate into fiscal 2019 revenue of $768 million.”
He sees gains through the next year, which could help it win the Best Stocks for 2019 contest.
Investor: Louis Navellier
You might be a little surprised to see the king of athleisure, Lululemon (NASDAQ:LULU), on this list. But Navellier — the man behind Breakthrough Stocks(formerly Emerging Growth), Growth Investor and Accelerated Profits — thinks it’s important for investors to remember that there’s far more to LULU stock than yoga pants.
He wrote: “Even as it has grown its global footprint and customer base, Lululemon has kept true to its founding values. It differentiates itself by making some of the highest-quality and most comfortable workout clothing that money can buy. In fact, it has a research and development lab that devotes time to examining the human sense of touch. This commitment to comfortable clothes has helped LULU stock expand into the lucrative ‘comfort and lifestyle’ niche.”
Lululemon dedicates itself to good, comfortable clothing and maintains ties to the communities in which it operates. That has helped it grow, and even start to challenge some of the big names in the sports apparel space, like Nike (NYSE:NKE) and Under Armour (NYSE:UA, NYSE:UAA).
Investor: Charles Sizemore
Charles Sizemore, chief investment officer of the investment firm Sizemore Capital Management, sees 2019 as being a good year for plastics and energy company LyondellBasell (NYSE:LYB).
What’s to like about LYB stock? Plenty. You want a low price? Both its trailing and forward price-to-earnings ratios are below 8. Maybe you’re a dividend investor? The yield on LyondellBasell stands at about 4.7%, currently paying out $1 per quarter.
As Sizemore wrote, “If you’re not familiar with the company, LYB produces everything from food packaging to water pipes and auto parts. Additionally, the company is one of the largest crude oil refiners in the United States and produces gasoline, diesel fuel, jet fuel and assorted lubricants.”
Still need convincing? Consider that the company’s largest shareholder, the holding company of British/Ukrainian billionaire Leonard Blavatnik, purchased $5.1 million shares worth of LYB stock in November. That’s worth nearly half a billion dollars.
Syrah Resources (SYAAF)
Investor: Eric Fry
You may not have heard of Syrah Resources (OTCMKTS:SYAAF) before, but you’d do well to keep it on your watch list. Eric Fry, a specialist in international equities for nearly two decades, believes this Australian graphite mining company is poised to ride the electric vehicle wave to plenty of growth.
It’s fairly well known that the batteries for electric vehicles use lithium and other metals, raising demand for those. But what you might not know is that they also need graphite — a single EV can contain 200 pounds of the stuff.
That means tech companies are going to need a lot. As Fry wrote, “According to SYAAF’s forecasts, the combined global demand for graphite from the EV and energy storage sectors will total at least 650,000 tonnes by 2025. That’s the ‘base case.’ The ‘high case’ calls for demand to total more than 1.3 million tonnes by 2025.”
And with the world’s highest-grade graphite mine in its hands, Syrah is set up as one of the best stocks for investors to capitalize on that growth.
Investor: Jason Moser
Technology is changing the way we do a number of things — including seeing a doctor. Telehealth is leading the charge in one area where healthcare meets tech, allowing people to speak to a doctor remotely for some non-emergency health concerns.
As Moser wrote, “While the concept of telehealth is still new to many, it is being seen more and more as an excellent option in many cases and the investments Teladoc is making in its business today could pay off big down the road as telehealth becomes a more meaningful part of the overall healthcare industry. And as someone who has used Teladoc’s services before I see massive potential.”
He’s not the only one seeing this potential, either. Consider that CVS Health (NYSE:CVS) recently announced a partnership with TDOC. That partnership grew out of a trial between the two dating back to 2016 — a trial where 95% of the users reported high satisfaction.
Viper Energy Partners (VNOM)
Investor: Neil George
The uncertainty in oil prices has some investors feeling skittish, but that very fact has made some names in the sector strong buys — VNOM among them.
As George wrote, “What sets VNOM apart is that it does not largely operate or develop its field assets. It mainly collects the royalties from companies and operators in working interest contracts. This means that Viper has less need for heavy capital investment in equipment and services. This frees it from having to constantly budget for development and maintenance.”
There’s also its sizable 7%-plus dividend yield, which is definitely nothing to sneeze at. And when you consider that dividend has held strong even through the oil price pain of the last few years, it’s clear this company is there for the long haul.
Now, can it take the top spot in the Best Stocks for 2019 contest? Only time can tell!
Investor: Kyle Woodley
The back-and-forth tariffs with China have beaten down a whole series of good stocks. That’s the situation Weibo (NASDAQ:WB) finds itself in right now. Kyle Woodley, senior investing editor for Kiplinger, sees WB stock as a fantastic rebound play, though that is contingent on the confrontation with China coming to an end.
Once that gets out of the way, you’re left with an excellent social media company with limited competition and a broad pathway to growth.
As Woodley wrote, “Weibo is forecasting 35%-38% year-over-year revenue growth to a range of $480 million to $490 million for the final quarter of 2018. That’s actually more optimistic than the 28.8% growth analysts are projecting, and even that lower bar would cinch a consensus growth estimate of 49.9% for 2018.”
In other words, if the trade war gets out of its way, Weibo could really impress investors in 2019 — and perhaps take the Best Stocks for 2019 crown.
Jessica Loder is an assistant editor for InvestorPlace.com. As of this writing, she did not hold a position in any of the aforementioned securities.