Stocks have been doing very well in 2019. Some of this is a recovery from the massive selloff in Q4 of last year, and some of it is a rosy picture of the coming year.
Underlying much of it is the Federal Reserve’s repositioning on interest rates. Its stated policy was to raise at least twice in 2019 to stay ahead of creeping inflation.
But when the Fed relented on rate hikes, the market began to breathe easier. And as long as the Fed continues down that path, the market should continue to run.
Recent GDP numbers were decent, if not salacious. Yet there remains contradictory data that should keep us all vigilant about expecting this bull to lift all stocks into the future — consumer spending in December was the worst since 2009.
Granted the government shutdown may have had some effect, but most of the December shopping was done by the time it kicked in, so it may have been a worse number because of that, but not by much.
The seven top-rated stocks to buy for March are delivering A ratings for their quantitative qualities, meaning investors like what they see and are buying these shares enthusiastically.
Capital Investment Company (CIC)
Capital Investment Company (NYSE:CIC) is what is known in the industry as a blank-check company. Basically, it raises private equity capital in tranches and then looks for a company to buy.
This the CIC’s fourth such deal and it has done well with its first three investments. The first was in 2009, starting Maryland real estate investment trust Two Harbors Investment Corp (NYSE:TWO), which is now the third-largest mortgage REIT in the U.S.
The second deal was in 2015, investing in Lindblad Expeditions (NASDAQ:LIND), an adventure travel company. The stock is up 48% in the past year as adventure travel becomes a very popular travel choice among many demographics.
The third deal was in 2017, merging with Cision (NYSE:CISN), a media research company.
Each of these deals is a separate “company,” so you’re essentially investing in CIC’s next project. And from the looks of things, investors are coming aboard swiftly.
Haymaker Acquisition (HYAC)
Haymaker Acquisition (NASDAQ:HYAC) is another blank-check firm that focuses on the consumer sector, including media and hospitality industries as well as traditional retail consumer products and services.
A number of these blank-check companies showed up on my Portfolio Grader this time around, which is an interesting development. It seems that institutional investors and hedge funds are looking for market alternatives for diversification, rather than just investing in publicly traded companies or investing in private companies directly.
It seems private equity companies are now starting to be publicly traded themselves. This could be interesting. Big financial institutions may see this as a way to outsource their alternative investing portfolio without having to build or expand current operations. An interesting sector to watch, to be sure.
Procter & Gamble (PG)
Procter & Gamble (NYSE:PG) is the forefather of consumer staples companies. The Ohio-based company has been around since 1837 and has found a way to not just survive, but thrive during the past 182 years.
It has seen depressions, world wars … pretty much anything an economy and consumers can throw at a company. Pampers, Tide, Downy, Charmin, Tampax, Old Spice, Pantene, Dawn, Gillette, Vicks, Crest, Olay, Secret and that is just to name a few.
It’s no surprise that a couple of years ago it went through a significant purge of brands it has accumulated over the years and refocused on its core divisions and brands. And it has paid off.
In the past 12 months, this steady-Eddie company was up 23%, not including its rock-solid 2.9% dividend.
And even while the markets are booming, the smart money is buying into PG as not only a great hedge, but a great total return foundation pick.
Mastercard (NYSE:MA) is another well-known brand with a deserved reputation for smart growth and solid returns. But the thing is, MA is transforming with its industry.
While there is plenty of buzz about financial technology companies (aka, fintechs), MA is one of the original fintechs. And savvy investors are starting to realize it. Money is going digital and MA hasn’t been sitting on its hands.
For everyone concerned, a cashless world is very convenient. And for banks and companies, digital transactions are significantly cheaper than cash transactions. The downside for some is that cash provides some level of anonymity and privacy — it isn’t logged into a database with a name and account attached to it.
But with the big money on digital payments, MA, with its global reach and well-respected brand is an easy choice for financial institutions and businesses around the world.
Nike (NYSE:NKE) is the 800-pound gorilla of the athletic footwear and apparel market. With a market cap of nearly $135 billion, it’s nearly 3x larger in market than its major competitor Adidas (OTCMKTS:ADDYY).
Even a hot company like Lululemon Athletica (NASDAQ:LULU) is a chimp compared to this massive primate. Although LULU has been in the press a lot recently, and I do like the company.
Even though NKE has returned a respectable 31% in the past 12 months, it hasn’t seen the growth that LULU has seen. Still, it looks like there’s a shift of interest back into a major diversified player like NKE.
And one of its big retail partners, Foot Locker (NYSE:FL) recently announced that it’s investing $275 million in Asia, which is already a strong market for NKE, and this will only help the brand. And a stronger consumer at home– and the advent of spring and summer sports — will also be a boost.
Diageo (NYSE:DEO) is a sin stock. So, if you’re not interested in one of the world’s largest and best alcoholic beverage companies, then you can skip this recommendation.
But if you’re interested in a great company with a return of 352% in the past 17 years (give or take) — that’s about a 20.7% annual average return — then read on.
Guinness, Johnnie Walker, Smirnoff, Ketel One, Ciroc, Captain Morgan, Tanqueray are just the tip of the iceberg when it comes to the brands that sit in the DEO portfolio.
Combine that with the fact that younger drinkers are buying less beer and wine and buying more high-end alcohol, they’re choosing quality over volume in the U.S. And that is a big deal, since much of the U.S. consumer-focused market has always counted on U.S. consumer to be of the more-is-better mentality.
Also, with the loosening of cannabis laws, infused products in North America are going to be big … and hip. DEO will certainly be a major player in this burgeoning sector.
Starbucks (NASDAQ:SBUX) started as a single store that operated in the famous Pike Place Fish Market in Seattle. It remained a single store for a decade until Howard Schultz joined the team.
After a trip to Italy, Schultz realized the potential for cafes in the U.S., done in a truly American style. In 1987 he and a group of investors bought the original Starbucks and turned it into what we see today — 24,000 retail stores in 70 countries.
Essentially, SBUX has turned a classic European business into a quintessentially American product and brand. The past decade has seen a lot of the company’s growth. And the amazing thing is, given its vast network, it still finds ways to grow its bottom — and top — line.
And if we’ve learned anything about corporate chiefs that run for high public office, it’s that it does wonders for their brand. Now that former CEO Schultz is looking into a presidential bid, you can be sure that for now it’s free advertising every time he speaks or is featured on a new segment.
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Source: Investor Place