They say it’s a bullish sign when the markets climb a wall of worry. That means, while things look grim — government shutdown, unimpressive earnings, slow trade talks with China, Brexit confusion, saber-rattling in oil-rich Venezuela — the market keeps on chugging upwards.
Remember, the market is always looking six months out, so whatever is happening this quarter was priced in more or less last year.
It’s likely the market sees lower interest rates that will revive real estate and housing sectors, solid consumer spending that will help retail and a happy ending to the trade war with China.
With that in mind, I thought it might be a good idea to feature 10 triple-A stocks to buy in February from my Portfolio Grader.
All took high marks in sales, earnings and quant categories, the latter meaning there’s gathering interest in the shares.
Amazon (NASDAQ:AMZN) is an easy one to start with. After a sluggish 2018 — the stock only rose a mere 28%, when its three-year average is around 58% annually — it is already moving quickly to get back on its uniquely powerful growth pace.
And as long as consumers keep spending, AMZN will keep racking up the gains.
AMZN is moving into the beauty sector now, launching its “find” brand in the UK, with move regions to follow. Its focused on beauty supplies at the $20-and-under price level, but if its popular, you can be sure AMZN will expand up the price chain.
The one tough spot is its move into the Indian market. Having already sunk at least $5 billion developing the market, new laws may make its headway more difficult. But it still has plenty of opportunities beyond India.
ConocoPhillips (NYSE:COP) is one of the oldest oil and gas exploration and production (E&P) firms in the U.S. And it’s also one of the biggest E&Ps in the world, having operations around the globe. It even has an LNG (liquified natural gas) export port in Australia to ship natural gas to Asia, where margins are the highest in the world.
COP is a story of economies. When economies are expanding, demand for energy rises. When economies contract, energy demand slacks. In either case, the first sector to feel the move is E&Ps, since their focus is on getting it out of the ground or finding new places to explore.
Because of its size, COP is a great choice in this sector right now. It’s big enough to absorb some of the short-term volatility but it will still keep some of the leverage when demand increases. It’s a solid value right now.
Veeva Systems (NYSE:VEEV) is up more than 20% in January and up nearly 83% in the past 12 months. This stock was completely unaffected by last year’s tech tumult.
Because it has built a unique niche where it is the leading firm — it makes cloud-based software solutions for life sciences companies.
Life sciences is a unique animal when it comes to the demand on a cloud-based system. There all sorts of regulations and protocols about information sharing and documentation. Plus, all the research aspects and then the marketing side of things make for a very complex system.
Veeva is a leader in this sector. And given the generally conservative nature of doctors and research scientists, going with a proven name is a big deal. And it shows in VEEV stock’s success.
Abiomed (NASDAQ:ABMD) is a medical device company that has carved out its own unique and important niche in the sector. It makes artificial heart pumps — the smallest in the world. And it makes equipment that helps monitor and manage diagnostics on heart function with its Impella-brand pumps.
This is one of those devices that are valued by all parties — surgeons, patients, hospitals and insurers. It means less invasive surgeries, which means less down time and risk of infection, which means less costs.
As industrialized world, where quality healthcare is reasonably accessible, ages, these kinds of solutions become much more in demand. And given its reputation in this sector, ABMD is at the top of the list when healthcare professionals and insurers are ordering equipment.
Medpace Holdings (MEDP)
Medpace Holdings (NASDAQ:MEDP) is one of a new breed of companies that specializes in partnering with pharmaceutical and healthcare equipment companies to work through clinical trials.
These types of companies are also known as clinical research organizations (CROs).
With clinical trials for pharmaceuticals running about $2 billion per drug, it’s important that pharmas are doing it right the first time.
Traditionally, big pharmas would take a drug from its own R&D, develop it, get it through trials and then market it. Nowadays, big pharma can buy a promising drug (or drug company) or partner with another firm, assess its potential, contract out the trials and then market it. MEDP takes that trial piece.
This is a very promising sector and MEDP is one of the leaders. It has had a solid move in January and that should continue for a long time to come.
Trade Desk (TTD)
Trade Desk (NYSE:TTD) is a new advertising company that is making a big splash. It basically has built a digital advertising platform that allows marketers to create personalized marketing experiences across platforms and channels.
Essentially, it allows marketers to buy space on mobile, social and desktop, and develop targeted audiences with targeted messages and video. It’s the next wave in advertising and is a trail that was blazed by big firms like Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) and Amazon and is now finding its way to the mainstream.
The stock is up a stunning 185% in the past 12 months, and over 20% in January alone. The one caveat here is its trailing price-to-earnings ratio is around 100, which given its growth seems fairly reasonable. But advertising revenue is tricky and can vary. If it varies to the downside, volatility will ensue. Be patient.
Ritchie Brothers Auctioneers (RBA)
Ritchie Brothers Auctioneers (NYSE:RBA) is a unique company that is in an ideal position in the current market.
It is one of the leading auction houses for industrial and agricultural equipment in North America. It has onsite auctions and online auctions as well as brokerage services.
If you’re a construction company that needs more equipment but aren’t sure if buying new is a good move right now, RBA is a good source. And the same can be said of farmers who are looking to offload some equipment or pick up something without spending big on a new rig.
It’s not growing like a tech stock, but this is a solid business that has been around since 1958, so it knows its customers and respects its shareholders.
Sabra Healthcare REIT (SBRA)
Sabra Healthcare REIT (NASDAQ:SBRA) has been on a roll in 2019, up more than 20% so far. That’s impressive for a REIT (real estate investment trust) that specializes in properties for healthcare-related companies.
Actually, that’s pretty impressive for most REITs — or most stocks for that matter.
A REIT is structured so that shareholders are “paid” out of the company’s net profits, like they’re an owner. REITs usually do this in the form of a dividend. SBRA is delivering a 9% dividend at this point, and that’s after its big run.
This is one of the top growth sectors in the REIT universe at this point. And it has a long way to go before it starts to slow down. If you’re looking for a long-term total return play, this is it.
Inogen (NASDAQ:INGN) is a healthcare equipment company that has been very good at establishing itself in a long-term trend with a specialized product in a growing sector.
INGN makes portable oxygen concentrators for long-term use. Traditionally, people that had respiratory issues and needed supplemental oxygen had to wheel around tanks of oxygen. The tanks are heavy, so they needed a small cart to wheeled around. The whole process is difficult and cumbersome, especially for those it was trying to help.
INGN products essentially take the oxygen from the air and concentrate it, so there’s no need for the tanks. Their products can be carried on your shoulder. And units for the house are also less ungainly. What’s more, there are no more oxygen tanks — full or empty — laying around the house and getting delivered.
Rexford Industrial Realty (REXR)
Rexford Industrial Realty (NYSE:REXR) specializes in industrial properties in Southern California.
Bear in mind that the two top seaports in the U.S. are the Los Angeles seaport and the Long Beach seaport. That means enormous amounts of goods are coming and going out of these ports and need to be stowed somewhere until they’re ready to be shipped or distributed.
REXR has only been in business for about six years, so it’s still in its acquisition phase. While the China-U.S. trade war may slow it business a bit, it’s also an opportunity to buy up properties from companies that are having a tough time operating their properties.
It’s delivering a 1.9% dividend right now, which isn’t a lot for a REIT, but REXR stock is up 12% this month. More positive movement on trade talks will help lift it even more.
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Source: Investor Place