There are a few companies that do well, even when times are bad, and there are a few stocks that do well, even when the stock market is plunging. It follows that while the economy is good and the stock market is on a tear, there will be a great many such companies and a great many such stocks. A few stocks will surely double from where they are today over the next twelve months, and if things remain as they are now, there may be a great many. It’s not so arrogant, therefore, that I might try to identify them.
It would be easy to name small biotech stocks that are nearing the end of a clinical trial—there would certainly be a double or two, but there would also be some catastrophes. What I’m attempting to identify are stocks that have such good growth prospects that they will rise by 100% or more relatively gradually, based on a sober assessment of their long-term prospects. Hopefully, if I miss the 100% mark with any of these (or all of these) the returns will still be good enough that no one will want to quibble.
Remember to treat these ideas as just that, ideas, and do your own research before making any investment decision.
The Trade Desk (TTD)
The Trade Desk is a targeted digital advertising company. Both the company and the sector are growing at a tremendous rate. It’s a megatrend that most investors are missing out on, although I’ve done my part to try to correct that. Trade Desk ads go wherever human attention is going, including mobile video, connected TV, and even mobile in-app. In most cases, they’ve beaten their competitors to the punch, and that may turn out to be more important than anyone yet knows. Consider: the company has a small but rapidly expanding stream of advertising from an unusual source. That’s the same position Google was in not long ago. TTD is one my top picks on the market today.
AMD shares are running now, after long and painful period of corporate readjustment. Cash is coming from the company’s investments in the data center space, and, of course, from gaming, where AMD chips appear to have grabbed a tiny lead over competitor NVDA. This information, I gather from the gaming industry, not the financial industry. NVDA has a solid and loyal following, but the GPUs everyone is talking about are AMD’s Ryzen Threadripper and its recently announced Vega. I decided to check out the website of Alienware, a maker of high-end gaming PCs, and sure enough, their top offering is built around AMD’s technology and not NVIDIA’s.
JD.com is a Chinese online retailer. One might even call it the Chinese Amazon.com, despite the fact that its larger competitor, Alibaba, is often called the same. Of the two, JD is clearly the most Amazon like, in that it maintains its own supply network and distribution chain, while Alibaba does mostly agency business, making it a bit like a very big Chinese eBay. JD is playing a long game, and a smart one, focusing on strategic partnerships, such as it now has with Baidu and Tencent. The company is investing in and actually using blockchain technology, and it remains on the forefront of automated delivery, meaning drones. Surprisingly, shares of JD have only risen moderately in the past few years. That will very likely change when the company decides it wants to make a profit, or when the Street catches on that, Amazon-like, it has the market surrounded.
Baidu is China’s largest search engine, and like Google in the western world, it has been able to use its lead in the search engine market to enter many other industries. BIDU shares haven’t done much in the past few years, but the company’s revenue has been rising the whole time. Not only did revenue rise from $7.96 billion in 2014 to $12.56 billion in 2017, but the first quarter of 2018 was higher than the year-previous quarter by 34%. This rising revenue hasn’t been hitting the company’s bottom line because Baidu has been making so many acquisitions, but now, it appears to be going the other way, selling off underperforming assets. It sounds to me like Baidu is going to surprise a lot of people with its profits this year, and that BIDU shares could rise sky high as a result.
Intuit is a financial software company offering TurboTax and QuickBooks. The company has seamlessly transitioned from software provider to service provider, and that’s critical, because as a service provider, it can constantly expand. So far, it is working very well, and why not? No company could be better poised to expand into all aspects of business management, since as bookkeeper, it sits in the middle of everything company’s do. Obviously, for tax companies, the big take is in the run-up to April 15, which is Intuit’s fiscal third quarter. Intuit recently reported earning $4.59 in that quarter, a jump of 25% over the previous year. INTU has performed well for years, and now that the company’s profits are rising faster than ever, there is no reason to think the share price won’t follow.