3 Stocks that are Actually Worth the Investment in 2018

Morgan Stanley's analyst does a yearly review of stocks that they believe will be the best investment for the next year. Last year their predictions almost surpassed the market. I think these analysts are great at their valuation and their opinions should not be taken lightly.


We focused on stocks rated Overweight by our analysts that also were favored by our US Equity Strategy Team's “BEST” model, which ranks stocks by expected market-relative performance on a 24-month horizon.

These are three best stocks according to them. First, is IBM as it is currently trading around $143 but they believe it will hit $248 that's almost double your money! Second, is VOYA is currently trading roughly at $38 but they project it at $52 for the upcoming year. Thirdly, is SLB as it is about $63 and they believe it will reach $90.

I don't know about you guys but I think it doesn't hurt to invest a little in one of these companies. So what are your guys' top stock pick for 2018?

 

I'm mainly looking at Marijuana (In Canada, it's bound to be legalized soon), Gold stocks (Lot of political drama) and Alibaba (Has provided me with great returns in the past). I'm also trying to find lumber companies because of Trump's duty on Canadian lumber. Bound to be one stock that adjusts to it well enough to impress investors.

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Personally, I don't know what to expect for their future. The volatility of the market trend is somewhat crazy over the months. But I think there's nothing to worry about with the company since it's still generates revenue. If you aim for long term investment, I think its worth the risk. I don't have the data to show since, I'm not a data scientist in this field lol. But if I based it on your post, its never too late to compete! The company should change their strategy to boost their income because there are plenty of competition in the market and now their biggest competitor is Amazon. I'll ask my investing group about this at www hashtaginvesting Dot com

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I don't think the growth rally has run it's course. I think with all the new technologies being developed, especially AI, Big Data and Machine learning the golden days of FAANG companies are not yet over.

 

I would not put all the FAANG stocks in a single bucket (i.e. Long-only/Short-only). Netflix, Alphabet and Amazon have continued upside potential given the strength of their products and dominant position relative to competition. I see no imminent headwinds that would precipitate a drop in their stock prices, and I don't consider them good candidates for shorting. Apple and Facebook's competitive position is relatively weaker, and hence are more prone to a momentum reversal trade (triggered by company news that may not meet market expectations or better than expected news from one of their competitors) and would be good candidates for shorting.

 

That's true. Netflix might be one of the hottest stocks of FAANG at the moment. Its business model of investing in original content will continue to generate subscribers for years to come. Year-over-year subscriber growth has exceeded 20% in each of the past eight quarters, and international subscriber growth has skyrocketed recently. Online access is exploding in places like Asia, Latin America, and Africa, which will only further allow Netflix to continue expanding its international consumer base.

 

My mantra when it's come to playing overpriced growth stocks (specifically FAANG) has been to never short quality -- if it's indeed true that market pricing is becoming increasingly separated from fundamentals be it due to the rise of quant or passive, then shorting a company like Apple or Facebook is bound to get you burned unless you have extremely high conviction in the short-term.

 

Defence, go for the big ones. LMT, BA, GD, etc. Wouldn't count on O&G - too much volatility in the oil markets Financials, prepare for the shitstorm that's about to come because of massive overpricing during the rally.

Ideally, you should be looking not at the industries he said he'll support, but rather the industries closer to his network (read Jared, Schwarzmann (Basically any opportunity BX is looking at) and Thiel). Because frankly, the only thing he's actually dictated in numerical terms is the defence budget - everything else is a sham.

GoldenCinderblock: "I keep spending all my money on exotic fish so my armor sucks. Is it possible to romance multiple females? I got with the blue chick so far but I am also interested in the electronic chick and the face mask chick."
 

Thermal coal producers in the interior such as Illinois Basis. Be weary of coal outside of this region as the cost advantage of producers like ARLP is huge. Valuations are arguably still shit even after the recovery, check out the stuff the EIA publishes, given the general sentiment surrounding coal, its unreal the projections being reached for both production in the Illinois basin versus other regions as well as the predictions regarding nat gas versus coal.

Financial Services especially banks - rollback in reg with int rate increases should translate to some degree of net interest margin expansion, how much gets passed along to depositors is another question. Also been a huge swing in banks, could see a good entry point after a correction which is likely coming. Also regional banks should do well on a long-term but again these got a overbought in the rally.

Second anything defense.

Kind of a "next big thing" type thought but I think travel related/experience economy/sharing economy type shit will do well. I definitely need to do more research. Obviously pure plays aren't as easy here as well but it's insane how much Millennials like to travel. Social media will continue to open the world electronically which I think is going to translate to just crazy travel/a thirst for experience for young people. Its insane how much some of my friends like to travel, like they might not open an IRA until they are 30 and have no conception of personal finance but they legit set aside money to travel. It's just baffling how much of a priority it is for people. I also watched a presentation by the founder of zipcar and some of the stuff she talked about is just crazy regarding how the auto sector is going to completely get disrupted in the next 10 years. Thinking about cars objectively, there's so much inefficiency in owning a car especially in urban scenes and some older people might not buy into it but it's very likely we see significant changes in the car ownership model with younger generations.

 

Company specific risk can be studied and analyzed. You are talking about unforeseeable risk that is pretty much impossible to forecast. This is where modern portfolio theory and diversification comes in to alleviate the risk exposure in this type of risk. Also when investing in the stock market you are investing in these types of risks, risk and rewards are somewhat proportionate. That's why the stock market typically has the biggest rewards to compensate you for these risks. There are more unpredictable factors (risk) in the stock market than the bond market, and as the golden rule says the stock market provides typically better returns on the upside.

 

I think this is a troll, but I'll bite.

Both things you stated as influencing the stock price negatively are short term hits, investing is about the long term prospects of the company, do you believe in the product, management, business model, etc. trading is more about the short term results of a company.

Keep an investing journal, or some sort of notes surrounding why you are purchasing said stock, so when they do take negative hits like this, you are able to look back and see whether or not the reasons you purchased the stock in the first place are still valid.

The solid blue chip stocks usually return more than the index itself and if you are curious jump on and have a look at the return you would have accumulated from year x to now, I bet it is much more than the loss you would have accumulated from keeping physical cash and have it eaten away by inflation.

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The main thing thing you should be focusing on with equities is understanding a mix of tech, fundamental, relative value, top down, and bottom up analysis. You have to be able to look at a situation from all angles, which is tough. Focusing just on financials will get you nowhere, especially if you're just identifying intrinsic value opportunities. Personally, I just use equities to beat out inflation and that's because my expertise is in credits. But if you're good at identifying and reacting to information quickly to trade on you can make some money on stocks.

 

Feel like the market has learned to ignore these empty threats from NK: short-term selloffs -> quick recovery. The fact that China is willing to enact sanctions against the country should further discourage them from making any meaningful advances. Trump trade is also slowly getting priced out. Just look at the Russell's recent performance to get an idea of what I mean.

Broad correction will occur due to balance sheet trimming by CBs. There is so much liquidity out there and we're all in for a bit of a rude awakening once it dries up.

 

Hi Wolf of Flinders Street, the silence is deafening, sorry about that.... Any of the threads below helpful?

  • Shorting and valuing a growth stock growth is increasing substantially- barriers to entry are low and there are some very capable companies ... decide if the stock is currently fairly valued? 2) Although I have conviction on the issues listed above ... promote (if anything, management are rather conservative). So what that leaves me with is a valuation ...
  • Is investment banking not as prestigious as most people think? Are kids that break in sub-par? "what stocks should I invest in?". The only ones left to admire us at the end of the day are other ... doesn't pay as well as it used to when you adjust for the cost of living, but is it still prestigious and ... are really behind the times when it comes to recruiting / employment. In any other industry we would ...
  • Buying and Selling Stocks as an Investment Banker restrictions do you have on buying and selling stocks while working in IBD? I know there are certain things you ... can and cannot do, but i'm not entirely familiar with the specifics. Are you simply not allowed ... to actively trade? If you're more of a value investor and plan on holding a position for ...
  • Shorting Stocks: My Research Process & 7 Rules I Follow constant (or accelerating!) growth and/or expanding margins. Example of this is retailers that are ... stocks that I think are long-term shorts, but pass because I think I'll get stopped out at a loss. ... can't charge 2 and 20 for them. Many low multiple value traps are good shorts, but I always make sure ...
  • Should You Short These 5 Hot Growth Stocks? bears are right and the 2017 growth rally has run its course? Or will shorting the FAANG stocks continue ... Facebook, Amazon, Apple, Netflix, and Alphabet have been some of the hottest growth stocks of ... stocks in recent weeks, with Netflix leading the pack as the hottest stock among short sellers. According ...
  • Is value investing dead? value investing dead? Do you think the earnings projections for certain growth stocks are on the wild ... "value" stocks slid, an unusual separation. Growth and value stocks in the U.S. returned the same from the ... have a value gap that is so extreme that quite often that can act as a catalyst for
  • DCF analysis isn't matching with stock's analyst expectations (after adjusting the growth in earnings to be a bit more realistic) seems to be way off, as shown in the ... EBITDA multiple method and perpetuity method to calculated the share price. The value I ended up with ... finance shows that the range their price targets are between $63- $77. Is there something inherently wrong ...
  • More suggestions...

Who will rescue this thread? KingAlpha Matthew123 shuckjones

Fingers crossed that one of those helps you.

I'm an AI bot trained on the most helpful WSO content across 17+ years.
 

Hey opaquet, I'm the WSO Monkey Bot and I'm here since nobody responded to your thread! Bummer...could just be time of day or unlucky (or the question/topci is too vague or too specific). Maybe one of these topics will help:

More suggestions...

I hope those threads give you a bit more insight.

I'm an AI bot trained on the most helpful WSO content across 17+ years.
 

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I'm an AI bot trained on the most helpful WSO content across 17+ years.
 

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