Here Are the Best Stocks to Buy for Q4 2019

Our latest list of the best stocks to buy now includes picks that offer cutting-edge technology as well as those that provide blue-chip reliability.

In some cases, they do both.

Here’s a preview of what you’ll find below:

  • This Japanese tech “investment vehicle” could be the next Berkshire Hathaway.
  • Believe it or not, the smart money is investing in banks right now, and we’ve got the best play to capitalize on it.
  • A new wave of cannabis profits is coming in California. One company in particular is in a great position to benefit.
  • We’ve got a stock to buy and own forever that provides a solid dividend and potential for huge gains to boot.
  • We’re now finding out the Equifax settlement is a lousy deal. However, there’s one opportunity in cybersecurity that offers a big payout.

And now our latest list of best stocks to buy now…

Best Stocks to Buy Now, No. 5: Hitch Your Wagon to the Warren Buffett of Tech

At more than $300,000 per share, Class A stock in Berkshire Hathaway Inc. (NYSE: BRK.A) is among the most in-demand in the world.

It’s easy to see why.

Who wouldn’t want to ride the coattails of an investment visionary like Warren Buffett? The Oracle of Omaha began with $9,800 in savings when he finished college and has amassed a fortune worth $82 billion.

For those who can’t afford those Class A shares – that’s most of us – Berkshire does have a Class B option that currently trades at a little more than $200.

But we’ve got an option even better than that – and right now, it’ll cost you less than $50 a share.

That’s SoftBank Group Corp. (OTCMKTS: SFTBF), a Tokyo-based firm that operates largely as an investment vehicle in a similar fashion to Berkshire Hathaway.

SoftBank’s CEO, Masayoshi Son, is a visionary a lot like Warren Buffett. He invested $20 million in a little online shopping startup now known as Alibaba Group Holding Ltd. (NYSE: BABA) back in 2000. By the time that company went public 14 years later, Son’s $20 million investment had turned into $70 billion.

And Son is nearly 30 years younger than Buffett. That means he can keep delivering returns for SoftBank shareholders for decades.

In fact, Son recently predicted that SoftBank’s investment portfolio would grow to ¥200 trillion over the next 20 years. That’s $1.85 trillion, roughly 33 times the current value.

Money Morning Executive Editor Bill Patalon thinks that might be a lowball estimate. SoftBank’s $100 billion “Vision Fund,” a private equity portfolio that invests in cutting-edge technology, has returned 62% in its first two years.

It seems that Son still has the magic touch that he showed with his Alibaba investment two decades ago. So don’t be surprised if SoftBank delivers similar returns over the next two decades.

“Grab some of these shares now,” Bill says, “to establish a ‘foundational’ position in the stock. Then look to add shares on pullbacks or as you get additional cash.”

Best Stocks to Buy Now, No. 4: Think It’s Not a Great Time to Buy a Bank Stock? Think Again.

Speaking of Warren Buffett, you might have heard that the mega-billionaire has been buying bank stocks recently.

In July, Berkshire Hathaway disclosed that it had upped its stake in Bank of America Corp. (NYSE: BAC) from 896.2 million shares to 950 million shares. That gave Berkshire a stake of more than 10% in the bank. It’s a level the investment firm almost never reaches for public companies.

That stake comes in addition to Berkshire’s holdings in several other banks – including Wells Fargo & Co. (NYSE: WFC), Goldman Sachs Group Inc. (NYSE: GS), and JPMorgan Chase & Co. (NYSE: JPM), among others.

Buying bank stocks might seem counterintuitive in a shaky market with falling interest rates. But banks have gotten into much better financial health in the decade since the financial crisis. Meanwhile, their price/earnings (P/E) ratios have been falling, making them a great bargain right now.

But while Berkshire Hathaway tends to buy shares in large corporations, the real opportunity right now is in regional banks.

These mid-size banks benefit from the same developments that are helping their behemoth counterparts. Plus, they also benefit from a growing trend: consolidation.

By buying up smaller banks and increasing their footprint, a number of regional banks have been able to increase efficiency and boost their profit margins.

And one regional bank in particular is the most profitable pick in this space…

That would be Home BancShares Inc. (NASDAQ: HOMB).

Founded in 1998 as First State Bank in Arkansas, the firm began acquiring banks all over the southeastern United States in 2003. Under its newer name, Home BancShares is now a holding company with over $10 billion in assets.

We’re not talking about acquisition for the sake of acquisition here, either. Co-founder John W. Allison focuses on acquired banks with low return on equity. That way Home BancShares can buy at a discount, boost performance, and collect the profits.

“I’m not a banker, I’m a businessman,” Allison says. “I run it like a business. I don’t run it like a bank.”

Allison says he’s aiming for $50 per share for Home BancShares stock – about 150% higher than its current price.

There’s reason to believe he can get there too. HOMB has a top score from the Money Morning Stock VQScore™.

“That figure puts HOMB squarely in the ‘Strong Buy’ zone,” says Money Morning Behavioral Trading Specialist Garrett Baldwin, “with a high probability the stock will take off much like Allison has projected.”

Best Stocks to Buy, No. 3: This Weed Stock Is Your Best Profit Play on “California 2.0”

It’s no secret legal cannabis is one of the fastest-growing sectors in the world right now.

One reason is increasing acceptance by legislatures and consumers. And there are also new innovations introduced nearly every day.

Another reason is that the legalization process is messy. Inefficiencies in new regulations are inevitable. And as those inefficiencies are smoothed out, it creates new opportunities for first movers.

Take California, for instance, which passed a law to legalize adult use of cannabis in 2016. That law went into effect in January 2018. But the process hasn’t been without its hiccups and frustrations.

The state left it up to its counties and cities to determine what cannabis activity would and wouldn’t be allowed within their borders. That might not sound like a bad idea in theory. But with 540 different jurisdictions effectively setting their own cannabis laws, it’s a nightmare for Californians to navigate.

No wonder a lot of them have decided to stick with black market dealers, who offer a competitively priced, tax-free product. It might not be legal, but at least it’s not a hassle.

But that’s about to change. Weedmaps, a popular online directory of cannabis dispensaries, announced recently that it will no longer connect users to unlicensed dispensaries.

In order to make the transition easier, the company will help those dispensaries navigate the web of regulations to get themselves licensed. And once they get the license, they can advertise on Weedmaps for free during their first 12 months.

It’s going to mean a lot more revenue going to legal dispensaries. So much more that Money Morning Director of Cannabis Investing Research Greg Miller refers to the phenomenon as “California 2.0.”

That’s especially good news for California’s licensed distributors. Those are private entities in the state that can legally package and transport the product, as well as collect taxes on them.

And that’s where our next pick comes in…

Origin House (OTCMKTS: ORHOF), formerly known as CannaRoyalty Corp., is the distributor for more than 50 brands in California. As new legal dispensaries go up and more customers turn to them rather than the black market, Origin House is going to have its hands full delivering products throughout the state.

That means if you grab it now, you can expect a nice short-term gain in addition to the long-term growth that the entire industry benefits from.

As Money Morning Director of Cannabis Investing Research Greg Miller puts it, “Investors, keeping their goals and risk tolerance in mind, would do well to own Origin House before the surge that ‘California 2.0’ will bring.”

The firm has been acquired by Cresco Labs Inc. (OTCMKTS: CRLBF). But it’s still listed under its own ticker symbol until that deal closes.

Best Stocks to Buy, No. 2: This “Forever” Stock Combines Big Gain Potential with Blue-Chip Stability

For a lot of stocks, you buy them when the timing is right.

For certain special stocks, though, the timing is always right.

That’s the case with SoftBank, which we mentioned above. You can buy shares, and then keep buying more over time. That way, any dips in share price along the way work out in your favor, because they offer an opportunity to get more shares at a lower price.

The same principle applies to our next pick: Constellation Brands Inc. (NYSE: STZ).

Constellation is a Fortune 500 company. It’s made a name on highly popular alcoholic beverage brands such as Corona, Negro Modelo, and Svedka Vodka, among others.

More recently, Constellation has made a big push into the cannabis market. It owns a 38% stake in Canopy Growth Corp. (NYSE: CGC), one of Canada’s largest growers.

For investors who are interested in cannabis but also want the stability and trustworthy management of a well-established company, Constellation is an ideal pick.

On the one hand, you get a stock that offers a 1.47% dividend yield – virtually unheard of in the cannabis investing world.

On the other, you get a company that could easily end up controlling the most dominant brands in the highly lucrative cannabis-infused beverage market.

In other words, Constellation has plenty to offer for adventurous cannabis investors and risk-averse money managers alike.

Case in point: Even the Retirement System of Alabama has invested $39 million in Constellation – a position the fund’s managers recently increased by more than 200,000 shares.

We recommend you follow their lead. Constellation is going to be a stock to own for a long time. You can take any dips in share price as an opportunity to buy more.

Put simply, Greg Miller says, “This is a stock you are going to want in your portfolio forever.”

Best Stocks to Buy, No. 1: This Cybersecurity Play Is a Much Better Deal than the Equifax Settlement

The dust has finally settled after the infamous Equifax Inc. (NYSE: EFX) security breach from 2017. The company settled its lawsuit for $700 million.

That might sound like a lot of money. But it doesn’t mean much for the 147 million people who were affected by the breach.

If your identity was stolen, you can theoretically claim up to $20,000 to compensate for the time and energy spent reclaiming your identity. But if you didn’t thoroughly document those efforts at the time, good luck.

You might have heard that everyone else affected by the breach can receive $125. But only $31 million of the settlement is set aside for those payments. Divide that by the number of people affected, and you end up with… $0.21 per person.

So for the people whose security was compromised, this settlement is not all it was cracked up to be.

We can’t change the terms of the Equifax settlement. But if you’re at all concerned about cybersecurity, we’ve got a pick that can offer far better “compensation” than this settlement.

The ETFMG Prime Cyber Security ETF (NYSEARCA: HACK) has outperformed the S&P 500 by 42% over the last two years since the Equifax breach. And concerns over cybersecurity are growing, especially considering the many local governments that have been attacked with ransomware recently.

That means this collection of industry leaders is only going to rise in value going forward.

HACK includes the big cybersecurity names you would expect, like Cisco Systems Inc. (NASDAQ: CSCO) and Symantec Corp. (NASDAQ: SYMC).

But it also holds stakes in younger firms that employ breakthrough technology. These are stocks that could take off like a rocket in the coming months and years.

That means firms like Proofpoint Inc. (NASDAQ: PFPT), which focuses on stopping a variety of online threats, and just collected 14 Cybersecurity Excellence Awards. That includes the gold for Most Innovative Cybersecurity Company and Best Cybersecurity Education Provider.

Or there’s Zix Corp. (NASDAQ: ZIXI), which provides software encryption and is projected by Allied Market Research to grow 14% per year through 2020. Clients include 30% of U.S. banks and seven divisions of the Treasury Department.

Another holding, Mimecast Ltd. (NASDAQ: MIME), protects more than 15,000 global customers from phishing scams and other e-mail breaches. Its software scans every web link in an e-mail system and can even protect against delayed attacks.

Between the advanced technology offered by these companies and an ever-increasing need for individuals and companies to protect themselves, it’s no wonder Money Morning Defense and Tech Specialist Michael Robinson predicts that HACK will rise another 40% over the next three years.

“HACK is the kind of investment that targets a massive, profitable tech trend,” Michael says. “And it offers us outsized gains for many years to come.”

— Stephen Mack

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Source: Money Morning