Going into 2020, it’s likely that many investors can agree on what they’d like to leave behind. Perhaps the U.S.-China trade war would make that list, or fears of a Brexit “crash-out.” At a domestic level, some might be ready to wash their hands of antitrust or opioid litigation. Others are probably crossing their fingers that Boeing (NYSE:BA) finally gets its 737 MAX planes back in the sky.
It’s safe to say that 2019 has been an interesting year. The trade war, partially fueled by President Donald Trump’s back-and-forth rhetoric, has dragged on. Now it seems like a phase-one deal should be wrapping up, but it’s hard to predict what the new year will have in store. At the same time, stocks have largely rallied from the end of 2018’s lows. The S&P 500 has hit all-time highs on several occasions and currently boasts year-to-date gains of 27%.
In the final few weeks of the year, it’s time to watch the ball drop and wait patiently for a Santa Claus rally. It’s also time to reflect on InvestorPlace.com’s Best Stocks for 2019 contest and prepare for the Best Stocks for 2020 picks.
As always, we have a solid round of picks from our experts. Some are hoping that as the trade war continues to resolve, Chinese companies will make a big rebound. Others are betting on tech heavyweights, e-commerce and financials.
What are these picks? In alphabetical order by ticker below, these companies are ones selected by our experts to be the best performing in terms of year-to-date gains. Starting with their Dec. 31 closing prices, we’ll be tracking how they do in the new year, including dividends. Pick your favorites, grab your popcorn, and get ready for what 2020 has in store.
Best Stocks for 2020: Apple (AAPL)
Investor: Reader’s Choice
This year, InvestorPlace readers switched it up a little, voting for a different FAANG component. After selecting Amazon (NASDAQ:AMZN) for three years in a row, our readers picked Apple (NASDAQ:AAPL). After 79% year-to-date gains, it’s no surprise why.
This year has seen better-than-expected iPhone 11 and AirPod Pro sales, and the holiday season should only help those numbers. And on the other side of the revenue coin, services revenue from its Apple Pay and Apple Music continue to increase. As InvestorPlace’s Chris Lau wrote, Apple Pay even beat out PayPal (NASDAQ:PYPL) in the third quarter for total transactions.
For the year ahead, it seems likely that our readers are betting on the promised 5G-enabled iPhone. While there’s no set release date, many expect the new iPhone will come in 2020.
“Although 5G coverage still needs some work, vendors are ready and waiting to sell 5G-enabled phones,” I wrote when reflecting on the reader’s choice pick. “You can currently pick one up from Samsung, LG and Motorola. But none of these names carry the same weight as Apple. When the 5G iPhone rolls out, expect high demand and happy investors.”
While the upcoming 2020 presidential election and antitrust allegations pose as headwinds on the company, there’s a lot to like about Apple in the next 12 months. And when considering returns in the new year, it’s important to note that AAPL offers a dividend yielding 1.1%.
Investor: Matt McCall
The new year might be the year for biotech stocks. That investment thesis is behind Matt McCall’s choice of Aimmune Therapeutics (NASDAQ:AIMT). With a market capitalization just over $2 billion and a share price near $32, AIMT is still a relatively small company. But for 2019, it’s up 32.6%, and in the last six months it’s up more than 60%.
Unlike others in the biotech space that focus on oncology or neurological conditions such as Alzheimer’s disease, Aimmune focuses on something that’s probably much more tangible to the average investor — food allergies. As awareness over these allergies, and particularly nut allergies, continues to grow, AIMT should grow as well. There are currently no FDA-approved preventative treatments on the market, but Aimmune is looking to change that.
As long as approval comes through for it’s Palforzia treatment, designed as a preventative treatment for peanut allergies, 2020 should be a good year. McCall writes that “Approximately 15 million people across the United States and Europe are affected by food allergies, making it a massive $24 billion industry. Peanut allergies account for $3 billion of that market. … [Aimmune] generated $0 in revenue in 2019, but 2020 is shaping up to be significantly stronger.”
Although biotech stocks have a higher risk-reward balance than those in other sectors, it looks likely that 2020 will be a good year for AIMT. Between Matt McCall and Louis Navellier, the pair have created a “Power Portfolio” chock-full of hypergrowth picks for 2020. Learn more about the picks that can make you a fortune here.
Investors: John Jagerson and Wade Hansen
Another major theme of 2019 has found itself in almost every home: streaming. It seems like pretty much every publicly traded company these days has a streaming service, but none have drawn as much attention as Disney’s (NYSE:DIS) Disney+ offering. Jagerson and Hansen chose DIS stock with this in mind, as Baby Yoda and The Mandalorian continue to draw in even more consumers. It’s crazy to think that in its first day of operation, Disney+ brought in 10 million subscribers.
That’s not the only reason the duo picked DIS for the Best Stocks for 2020 contest. Disney’s magic extends to its movie franchises, its theme parks and its hotels. Frozen 2 has already become a screaming success in the box office and Star Wars: The Rise of Skywalker promises to do the same. And don’t forget that Disney, which apparently owns every name in the media world, is also behind the beloved Avengers franchise.
Essentially, there’s a lot to like about Disney’s narrative. And from a technical perspective, Jagerson and Hansen wrote that “After bottoming out in late-2018 with the rest of Wall Street — a bottom that formed the head of an inverted ‘head-and-shoulders’ bullish reversal pattern — DIS has been gaining bullish momentum.” Since the stock recently broke above resistance at $150, they “wouldn’t be surprised to see the stock make a run for $200 before the end of next year.”
So in between streaming your favorite movies this coming year, make sure to keep an eye on Disney stock. Oh, and don’t forget to note its 1.2% dividend yield. Unrelated but just as important, Jagerson’s “Everyday Income System,” can teach you how to earn as much as $1,290 in a single day! Learn more about this revolutionary system by clicking here.
Energy Transfer (ET)
Investor: Charles Sizemore
There’s nothing like winning once and then having that same luck twice. That’s exactly what Charles Sizemore is trying to do with his pick Energy Transfer (NYSE:ET), which brought him the gold in 2016.
Energy Transfer is a midstream pipeline operator — meaning that it is responsible for processing crude oil and natural gas. It’s had a rough time of it this year, with a year-to-date loss of almost 0.45%. But with a dividend yield just shy of 10% and the cash to keep that dividend coming, Sizemore is confident in a rebound.
At the end of 2015, anti-fracking sentiment, low oil prices and an acquisition gone awry were hurting Energy Transfer. By the end of 2016’s first quarter, Sizemore wrote that all had changed. The stock ended 2016 up more than 50%. At the end of 2019, a lot is similar. Investors are worried about the company’s acquisition of SemGroup, fearing that it will add on too much debt. Environmental activism and pushes for renewable energy sources are also weighing on ET and all of its peers. Feeling any déjà vu yet?
Sizemore writes that lightning can in fact strike the same spot twice. He says, “Energy Transfer’s share price could jump by 50% and the shares wouldn’t be anywhere close to expensive. I have no way of knowing whether 2020 will bring those kinds of returns for Energy Transfer, but they’re certainly not unrealistic. And even if the capital gains end up being a little more modest, we still get to collect a current yield of close to 10%.”
If you too want to bet on black gold, ET might just be one of the best stocks of 2020.
Investor: Eric Fry
Since Eric Fry began researching Freeport-McMoRan (NYSE:FCX) back in November, the stock is already up an impressive 24%. And as he bets on a global surge in copper prices, he thinks it’s likely FCX will return even more to shareholders by the end of 2020.
And from his perspective, there’s a lot to like about the company, which happens to be one of the world’s largest copper producers. By expanding its facilities, it’s likely that FCX will be able to boost its own copper production capacity. That’s important for a few reasons. Global demand for refined copper is growing at a faster rate than supply, meaning that copper prices should continue to rise. Increased production and higher per-pound copper prices both spell success for Freeport-McMoRan.
Fry also highlights that as the United States and China resolve their trade disputes, Freeport should benefit. Why’s that? Electric vehicles are very copper intensive and China is one of the largest producers of electric vehicles. So as the two countries begin to warm up to each other, FCX stands to gain from copper-hungry EVs hitting the road once more.
“Freeport-McMoRan is a stock that could produce triple-digit gains in 2020, both because its copper production will ramp up over the next several months and because copper prices will likely soar toward $3.50 a pound,” Fry writes.
Plus, the company has some artificial intelligence projects in the works and a 1.5% dividend yield, making it even more interesting for investors. But as Fry always says, no bull market lasts forever. Investors can prepare for the next bear market by reading Eric Fry’s “Bear Market 2020: The Survival Blueprint,” which teaches you how to thrive and make massive gains in downturns.
Hercules Capital (HTGC)
Investor: Neil George
The new year is a big year for many reasons, one of which is the upcoming presidential election. Some in the markets are already worried what Democratic primary candidates Bernie Sanders and Elizabeth Warren would mean for many industries. Warren in particular has defined much of her campaign with promises to break up big tech companies and restructure the healthcare sector. To many investors, that’s reason for fear. But with Neil George’s pick Hercules Capital (NYSE:HTGC), you can choose an income-generating name that’s relatively safe from the drama. And Neil has quite literally written the book on income, Income for Life: 65 Income Streams Anyone Can Collect, so he knows a thing or two.
Hercules Capital is a business development company, meaning that it can invest in small companies through loans and financing. But unlike big banks, it’s immune to harsh regulations. Although early Democratic debates showed that candidates are more interested in protecting consumers than corporations, HTGC and its BDC peers are not under direct attack. This means you can benefit from its regular annual yield of 9.4% while staying sheltered.
Want another reason to believe in this company? HTGC has made a name for itself investing in Silicon Valley companies including Box (NYSE:BOX) and Pinterest (NYSE:PINS). As tech continues to become all important, it’s nice to know that Hercules is riding the wave.
“All of this comes down to a well-run technology investment company with tax advantages and big and rising dividends,” George writes. “2020 and beyond should be rewarding for this alchemy investment in Hercules Capital.”
Luckin Coffee (LK)
Investor: Larry Ramer
This pick is coming up nice and hot. That’s right, Larry Ramer chose China’s Luckin Coffee (NASDAQ:LK), making a sort of contrarian play in the midst of the U.S.-China trade war. Many have called the coffee company the Starbucks (NASDAQ:SBUX) of China, but it will soon have more physical locations and better prices within its home country. And there’s a lot to like beyond its brews, especially as it hones in on domestic and international growth.
Within China, Luckin began paying respect to the dominance of tea, marketing under the brand Luckin Tea. According to Ramer, “Luckin revealed that sales of its tea had soared an incredible 800% in five months.” As coffee continues to grow in popularity and Luckin elevates its tea brand, there’s plenty of growth potential within the Chinese market.
And LK is growing across the globe, too. Luckin struck a deal with the Americana Group to sell coffee in the Middle East and India. Ramer sees this as yet another validation that the company has both solid products and a solid brand.
“Luckin’s rapidly rising revenue and profitability, along with the quality of its offerings, makes it an attractive stock,” Ramer writes. “Add in its huge growth opportunities and its reasonable market cap, and Luckin stock becomes the best stock for 2020.”
PennyMac Financial Services (PFSI)
Investor: Louis Navellier
Like Neil George, Louis Navellier made his pick for the best stocks contest with the upcoming election in mind. PennyMac Financial Services (NYSE:PFSI) is the fourth-largest loan originator and the sixth-largest loan servicer in the U.S. What does this mean?
It means that with the election on the horizon, politicians will want to keep the economy nice and rosy. And a rosy economy means that housing, which has been booming thanks to lower interest rates, eager-to-lend banks and lower construction costs, should remain strong through November 2020 and beyond.
Navellier originally introduced this pick to his Breakthrough Stocks subscribers last month. He wrote:
“Overall, it’s a fantastic environment for mortgage lenders like PennyMac Financial Services — and I suspect that it will add nicely to the company’s top and bottom lines in the upcoming quarters. And the analyst community agrees. For the fourth quarter, analysts have upped earnings forecasts by a whopping 53.5% in the past three months. The current consensus estimate calls for 141.3% annual earnings growth and 73.1% annual sales growth.”
With that in mind, put on your hard hats and pack your boxes. It looks like PFSI will soar as both a value and a growth play. It’s a mix that combines the best of both worlds, which is precisely the philosophy behind Louis and Matt’s new collaboration. It merges Matt’s “top-down” approach with Louis’ “big winners first” strategy to create a new methodology. They’ve dubbed it the “Power Portfolio” and it puts 2020’s big winners right at your finger tips.
Investor: Left Brain Investment Research
If you were paying attention, you’ll remember that Disney stock also made its way into this list, playing on the ever-growing streaming theme. The team at Left Brain Investment Research took a different approach to that trend, instead choosing Roku (NASDAQ:ROKU) as a lesser-known name that was poised for success.
Their thesis? Roku should benefit by “becoming the operating system for smart TVs.” Smart TV manufacturers sell their products with Roku’s operating system already installed because it costs them less to use an existing set-up. Left Brain thinks that because of its access to streaming data, the company holds a lot of value in a market that everybody wants to enter. Beyond Disney, it faces competition from names like Apple, Netflix (NASDAQ:NFLX) and Amazon.
But instead of worrying about the intense competition, the team believes Roku benefits from its streaming peers. Its platform and its years of experience give it a big lead. And, it has a proven CEO that should help it remain successful in the years to come.
“Roku is a rare company with many of the exceptional characteristics we look for in a growth stock,” Left Brain Investment Research writes. “And it has an incredible growth trajectory, as it leads the way in becoming the standard smart TV operating system. Roku’s business model allows it to gather invaluable information for targeted advertisers, particularly as competition among content providers grows.”
Grab your smart remote and get ready to watch Roku’s performance in 2020. Maybe Left Brain picked a winner.
Investor: Jason Moser
It wouldn’t be right to have a best stocks contest that didn’t hit on e-commerce. This year saw some names in retail like Forever 21, Charlotte Russe and Payless file for bankruptcy. And you can’t forget Sears (OTCMKTS:SHLDQ), which filed at the end of 2018. Beyond the trend of dying retailers, Amazon rolled out one-day shipping and cut ties with FedEx (NYSE:FDX) to focus on its own logistics. It’s clear that e-commerce is here to stay, and it should only continue to evolve and grow throughout 2020.
That’s why The Motley Fool’s Jason Moser chose Wayfair (NYSE:W) stock as his pick for the new year. Some estimate that the home improvement and home goods market that Wayfair participates in is worth $285 billion. That’s a huge jump from its trailing 12-month revenue of $8.6 billion.
Moser says he isn’t worried about Amazon’s shadow dwarfing W stock because the company has already developed a well-known and heavily followed brand. However, with the phase-one trade deal still murky and tariff threats looming (at least in the distance), he says he’s planning on watching the U.S.-China trade war closely for its impact on the stock. I guess that means we won’t be done with that headwind just yet.
“If you haven’t heard of Wayfair by now I’m going to assume that you’re living under a rock,” Moser writes. “As the retail landscape continues to evolve and e-commerce continues to grow its share of the pie, Wayfair stands out as not only an investment that should see better days in 2020, but many years beyond.”
Whether you’re looking for a nice new couch or a stock that should soar in 2020, Wayfair might be your best bet.
Sarah Smith is a Web Editor for InvestorPlace.com. As of this writing, she does not hold any of the aforementioned securities.