2019 Winners That Still Look Good

Wednesday, November 27, 2019 7:43 AM | Michael Fowlkes

2019 has been a good year for the stock market. The Dow Jones is up 20.5% on the year and currently trading just shy of its all-time high.

While there are a lot of uncertainties that remain in the market, a strong overall economy, low unemployment, falling interest rates, and rising hopes of a trade deal between the U.S. and China have pushed the major indexes all into record territory.

As the markets have risen, a lot of big-name stocks have traded up to their all-time or 52-week highs in the process. A lot of traders are starting to worry about a possible selloff or another recession in 2020, but there are still a lot of stocks that have outperformed the market in 2019 that look attractive moving forward.

Valuations are a concern, so you definitely want to make sure you are looking at stocks that are in growth mode while also trading at reasonable prices. Here are a few of 2019's big winners that remain attractive as we head into the new year.

Apple (AAPL)

Tech giant Apple (AAPL) has been out of the stronger stocks in 2019, with shares currently up 69% on the year. The strong gain has been a result of the company's ability to show impressive growth in its services division, which is helping to offset slowing iPhone sales. The company has posted better than expected quarterly earnings each of the last 14 quarters, and profits are up 8.4% per annum over the last five years. Despite trading at a record high, AAPL stock trades at just 18 times future earnings which are expected to rise at an annual rate of 9.9% over the next five years. AAPL is currently trading at $266.65 with an average price target of $258.23.

Target (TGT)

Mega retailer Target (TGT) has nearly doubled in 2019 with shares currently up 92.5% on the year. The company has reported four straight quarters of positive earnings and revenue surprises, and earnings last quarter were up 24% year over year with sales rising 5%. Target has invested heavily in its e-commerce business, which is showing improvements and putting the company in better competition with Amazon.com (AMZN) and Walmart (WMT). Target has shown earnings growth of 10.9% per annum in the last five years, and looking ahead analysts expect more of the same with profits expected to rise 10.3% annually over the next five years. The stock is currently trading just shy of its all-time high at 18 times future earnings. The strong growth, bullish investor sentiment, and reasonable price makes TGT a solid buy into the new year. TGT trades at $127.12 with an average price target of $127.53.

Masco Corp. (MAS)

Masco Corp. (MAS) makes building products and equipment. The stock has appreciated 61% on the year and is currently trading at its all-time high. The strong overall economy has boosted the housing sector which in turn has led to strength in housing-related stocks such as Masco. The company has recorded annual earnings growth of 23% over the last five years which has fueled the stock rise. Looking ahead analysts expect growth to slow, forecasting profits to rise at an annual rate of 7% per annum over the next five years. MAS remains reasonably priced at 18 times future earnings which warrant additional upside. MAS trades at $47.16 with an average price target of $50.17.

Tyson Foods (TSN)

Processed food maker Tyson Foods (TSN) has gained 67% year to date. The stock has been stuck in a sideways trend over the last three months, but with shares trading at just 16 times earnings there remains a lot of upside potential. The company reported an earnings miss mid-November, but shares remained resilient and are once again trading at pre-earnings levels. Tyson has shown profit growth of 16.5% annually over the last five years and looking ahead analysts expect to see earnings rise 9.6% per annum over the next five years. Wall Street is focused on the company's earnings strength, and with a low valuation, the stock should break out of its sideways trend and move higher with the overall market. TSN trades at $89.62 with an average price target of $90.33.

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