2018 will be a year that investors will remember for its volatility. In the last week of the year alone the market has been on a roller coaster ride that has seen all the major exchanges record triple-digit and even quadruple-digit highs and/or lows. The markets can digest a lot of economic uncertainty such as the direction and pace of interest rate changes, or how companies will perform with revenue and earnings growth expected to modify from their torrid pace of 2018. They can even weather the uncertainty involving the now almost 12-month long trade war with China (there’s got to be some kind of resolution, right?).
But the market doesn’t like political uncertainty – and after brushing off an anti-climactic mid-term election season, the market is looking at a government shutdown as the ball drops on 2018. Now, a government shutdown in and of itself isn’t necessarily a bad thing. And we all know there will be a resolution, maybe even before you’re reading this. But it goes to show that the market doesn’t know what it doesn’t know, and that can make sitting on the sidelines with cash a bit more attractive.
Still, whether you believe this selloff is just a correction or that we’ve entered a bear market, there are always stocks you can buy that will help your portfolio weather any kind of economic turbulence. These stocks are either designed for tough times or are on the forefront of capturing consumers' minds and dollars. We've picked eight stocks that you should consider for your portfolio as we enter 2019.
Quick Links
- Amazon
- Ollie’s Bargain Outlet Holdings
- Canopy Growth
- Johnson & Johnson
- AT&T
- Celgene
- Praxair
- Barrick Gold Corporation
#1 - Amazon (NASDAQ:AMZN)
Amazon (NASDAQ: AMZN) - Forget about the fact that Amazon's stock has suffered some of the worst losses since this correction began in October. Forget the noise about interest rates and inflation affecting consumer confidence. And pay little attention to the announcement that the company had its worst quarter since 2008. Look out your window. I don't know about you, but I see delivery trucks stopping at houses every day delivering packages from Amazon. Every. Single. Day. The word "disruptive" is thrown around (and misused) a lot in business, but Amazon is defining disruptive every day. It has re-invented what an entire generation thinks of as a retail business, moving it from the mall to their phone. That is a disruption. And that is why anything negative you hear about this stock right now is just noise. And millennials aren't just Amazon customers, they're investors. It has survived major market events before and come back stronger. There is nothing to indicate that this time will be any different.
About Amazon.com
Amazon.com, Inc engages in the retail sale of consumer products, advertising, and subscriptions service through online and physical stores in North America and internationally. The company operates through three segments: North America, International, and Amazon Web Services (AWS). It also manufactures and sells electronic devices, including Kindle, Fire tablets, Fire TVs, Echo, Ring, Blink, and eero; and develops and produces media content.
Read More - Current Price
- $202.88
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 41 Buy Ratings, 2 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $235.77 (16.2% Upside)
#2 - Ollie’s Bargain Outlet Holdings (NASDAQ:OLLI)
Ollie’s Bargain Outlet Holdings (NASDAQ: OLLI) - Ollie’s has a similar story that is familiar to many companies in the fourth quarter of 2018. They reported better-than-anticipated earnings with 19.1% year-over-year sales growth and adjusted earnings per share that showed year-over-year growth of over 45%. But in late 2018, the phrase isn’t what have you done for me lately, it’s what do you expect to do tomorrow. And the company’s outlook came in at the lower end of what analysts had expected. That wasn’t enough for investors. Even after the report was released, the stock was punished on December 6 as shares lost 17.6% of their value. To be fair, share prices had increased by 80% at their high point this fall with a price-to-sales ratio of 5.5 and a P/E ratio above 40. A bit of profit taking may have been in order. Investors may be wondering whether now is the time to buy. There are reasons to support that decision. The company says that the company is currently only operating at one-third of the level of stores they believe they can operate in the United States. Plus, consumers started fleeing to discount stores during the last recession and have shown no signs of being weaned away. This should create a viable market for OLLI, particularly if the economy does dip into recession. While this stock may not be for the risk-averse, it has the potential for growth-minded investors.
About Ollie's Bargain Outlet
Ollie's Bargain Outlet Holdings, Inc operates as a retailer of brand name merchandise in the United States. The company offers housewares, bed and bath, food, floor coverings, health and beauty aids, books and stationery, toys, and electronics; and other products, including hardware, candy, clothing, sporting goods, pet and lawn, and garden products.
Read More - Current Price
- $87.56
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 10 Buy Ratings, 2 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $104.92 (19.8% Upside)
#3 - Canopy Growth (NASDAQ:CGC)
Canopy Growth (NYSE: CGC) -Depending on where you stand on the idea of legalizing marijuana, you might think we’re smoking something to include a cannabis company on a list of stocks to buy in 2019. Canopy’s stock is down from its peak price by over 40%. What is more concerning is that it failed to sustain a rally even after favorable results from the November mid-term elections that saw Michigan become the 10th state to legalize recreational marijuana. This is in addition to the fact that nearly two-thirds of the United States have legalized some form of medicinal marijuana. The problem for Canopy is the optics. No administration wants to be seen as coming out in favor of legalized marijuana. But with some estimates saying 62% of Americans now support legalizing recreational marijuana, opinions may be changing. The opportunity for Canopy is that investors vote with their dollars. And according to Beau Whitney, vice president, and senior economist at New Frontier Data, investors injected $10 billion into cannabis stocks in North America in 2018. For perspective, that's two times what was invested in these stocks in the last three years combined. And that number is expected to increase to over $16 billion in 2019. Another solid trend for CGC is that a good percentage of these investment dollars are coming from millennials who are much more likely to be open-minded about the use of recreational marijuana. For many investors, the stock may seem too risky to own, but this seems like a case of a stock that has too much upside not to own.
About Canopy Growth
Canopy Growth Corporation, together with its subsidiaries, engages in the production, distribution, and sale of cannabis and hemp-based products for recreational and medical purposes primarily in the United States, Canada, Germany, and internationally. It operates through Canada Cannabis, International Markets Cannabis, and Storz & Bickel segments.
Read More - Current Price
- $3.76
- Consensus Rating
- Reduce
- Ratings Breakdown
- 0 Buy Ratings, 2 Hold Ratings, 1 Sell Ratings.
- Consensus Price Target
- $3.50 (6.9% Downside)
#4 - Johnson & Johnson (NYSE:JNJ)
Johnson & Johnson (NYSE: JNJ) - JNJ has had a bad month of December. Just a week before Christmas, news broke that the company had not disclosed the alleged presence of asbestos in its signature baby powders. The stock plummeted 10 percent in one day, stripping $40 billion off the market value of the blue-chip stock. The company announced a $5 billion share buyback program to help stop the decline. That's the bad news. The good news for the company is that while the news announcement is recent, JNJ has been dealing with these lawsuits for years. They've won some and in other juries have failed to reach a verdict. If this stays contained to a public relations problem, the company will come out just fine. Johnson & Johnson is a solid defensive stock that continues to issue regular dividends. Zacks Investment Research is forecasting the company to report an 11.8% earnings growth for 2018 which will outpace the industry average of 9.3%. Furthermore, many analysts are seeing future litigation risks as being baked into the current valuation. Barring any more bad news, the stock is probably at or near the bottom, which may make it an attractive time to jump in.
About Johnson & Johnson
Johnson & Johnson, together with its subsidiaries, researches, develops, manufactures, and sells various products in the healthcare field worldwide. The company's Innovative Medicine segment offers products for various therapeutic areas, such as immunology, including rheumatoid arthritis, psoriatic arthritis, inflammatory bowel disease, and psoriasis; infectious diseases comprising HIV/AIDS; neuroscience, consisting of mood disorders, neurodegenerative disorders, and schizophrenia; oncology, such as prostate cancer, hematologic malignancies, lung cancer, and bladder cancer; cardiovascular and metabolism, including thrombosis, diabetes, and macular degeneration; and pulmonary hypertension comprising pulmonary arterial hypertension through retailers, wholesalers, distributors, hospitals, and healthcare professionals for prescription use.
Read More - Current Price
- $153.10
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 8 Buy Ratings, 7 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $175.94 (14.9% Upside)
#5 - AT&T (NYSE:T)
AT&T (NYSE: T) - The future is 5G, and while AT&T’s competitor Verizon is getting credit for being first to market, AT&T may be the company that will wind up being the leader in the long run. The question is one of implementation, and AT&T is pledging to use standards-based equipment as they roll out 5G in a methodical way in key markets. It's a measure twice, cut once approach that will allow the technology time to catch up to the marketplace (currently many mobile phones lack the proper receptors). AT&T still faces some concerns about its debt load after its acquisition of DirecTV and Time Warner, which also has made some analysts wonder if its growth is really in wireless or if it's looking to rely on growth through acquisition. Still, the stock has higher earnings and free cash flow than Verizon and that shows up in the size of their dividend yield which is an impressive 7.1% as of this writing. In uncertain times, investors should be looking for stocks that are built for the long haul. With a solid, albeit modest valuation and the potential to capture a significant share of the growing 5G market, AT&T fits that profile rather nicely.
About AT&T
AT&T Inc provides telecommunications and technology services worldwide. The company operates through two segments, Communications and Latin America. The Communications segment offers wireless voice and data communications services; and sells handsets, wireless data cards, wireless computing devices, carrying cases/protective covers, and wireless chargers through its own company-owned stores, agents, and third-party retail stores.
Read More - Current Price
- $22.83
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 11 Buy Ratings, 7 Hold Ratings, 1 Sell Ratings.
- Consensus Price Target
- $23.40 (2.5% Upside)
#6 - Celgene (NYSE:BMY)
Celgene (NASDAQ: CELG) - Biotechnology stocks are not for the faint-hearted investor. However, whether you rode Celgene all the way down to its current level, or are looking for a stock that’s likely to rise in 2019, Celgene looks like a good bet. This is a company that churns out an exceptional profit with high margins. Yet somehow it’s been caught up in the correction – which historically hits healthcare, and specifically biotech companies hard. A common critique of the stock is that it relies on its multiple myeloma drug Revlimid for approximately 60% of sales. However, despite noise about generic competitors eating into sales, the company has reached settlements which will make Revlimid the only game in town until January of 2026. That’s a long time for the drug to help CELG continue to deliver profits. But with biotech companies, the story is always about what’s coming down the pipeline. In the case of Celgene, the future looks very promising with reports indicating that the company and its partners are working on what could be first-in-class medicines for cancer, inflammation and immunology compounds. The company continues to stand by its forecast of earnings per share over $12 in 2020 (currently they are at $3.93). Even if that comes in 10% below forecast, it would still be more than double current levels.
About Bristol-Myers Squibb
Bristol-Myers Squibb Company discovers, develops, licenses, manufactures, markets, distributes, and sells biopharmaceutical products worldwide. It offers products for hematology, oncology, cardiovascular, immunology, fibrotic, and neuroscience diseases. The company's products include Eliquis for reduction in risk of stroke/systemic embolism in non-valvular atrial fibrillation, and for the treatment of DVT/PE; Opdivo for various anti-cancer indications, including bladder, blood, CRC, head and neck, RCC, HCC, lung, melanoma, MPM, stomach and esophageal cancer; Pomalyst/Imnovid for multiple myeloma; Orencia for active rheumatoid arthritis and psoriatic arthritis; and Sprycel for the treatment of Philadelphia chromosome-positive chronic myeloid leukemia.
Read More - Current Price
- $57.88
- Consensus Rating
- Hold
- Ratings Breakdown
- 4 Buy Ratings, 14 Hold Ratings, 2 Sell Ratings.
- Consensus Price Target
- $54.07 (6.6% Downside)
#7 - Praxair (NYSE:PX)
Praxair (NYSE: PX) - Why does an industrial company make a list during a correction? Some might question whether an industrial stock should make a list like this in any economy. But Praxair has a competitive advantage – a broad reach that touches the right markets. The company’s core chemical-service business delivers the necessary components for key industries like aerospace, electronics, and healthcare. A case in point is an exclusive long-term agreement the company recently signed to supply oxygen to Fulcrum BioEnergy’s Sierra BioFuels plant. They also serve more traditional sectors like food and beverage. In short, they are a company that is a conduit for companies that tend to thrive no matter the economy. The stock has been trading in a tight range for the year but is currently offering a fairly attractive dividend yield of just over 3%. The government recently approved a merger that will make the company a wholly-owned subsidiary of Linde PLC.
About Praxair
Praxair, Inc produces and distributes industrial gases. It operates through five segments: North America, Europe, South America, Asia, and Surface Technologies. The company offers atmospheric gases, including oxygen, nitrogen, argon, and rare gases; and process gases, such as carbon dioxide, helium, hydrogen, electronic gases, specialty gases, and acetylene.
Read More - Current Price
- $13.14
- Consensus Rating
- Hold
- Ratings Breakdown
- 3 Buy Ratings, 4 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $13.29 (1.1% Upside)
#8 - Barrick Gold Corporation (NYSE:ABX)
Barrick Gold Corporation (NYSE: ABX) - Barrick Gold has been on quite a run lately. While many stocks have been crushed by this market selloff, ABX shares have grown, and quite nicely. In October alone, the stock rose 12.5%. When you factor in that it pays a dividend, albeit not a very impressive one at 1% yield, and there is uncertainty surrounding the overall economy, now may be a perfect time to invest in this stock. Of the 22 analysts that cover ABX, 4 have rated it as either BUY or OUTPERFORM, 16 have rated it as a HOLD, and most telling none have rated it as a SELL. While that may not be a ringing endorsement, it does suggest that the market may be open to the right precious metals stocks. Gold historically performs well in times of geopolitical uncertainty. From Europe to the Middle East, not to mention the ongoing trade dispute with China, tensions seem to be rising up. The U.S. government shutdown and the uncertainty regarding the long-term U.S. monetary policy give gold an ideal backdrop for success. Investing in precious metals can be risky, but it can also be an effective hedge for your portfolio while the market struggles to find a clear direction.
About
- Current Price
- 0.00
- Consensus Rating
- N/A
- Ratings Breakdown
- 0 Buy Ratings, 0 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- N/A
The market correction of 2018 touches every sector of the market. Fear and the desire to seek safety on the sidelines is a natural reaction. But a fundamental truth of the market is that the market does rebound from corrections. Sometimes it takes a while, but the cycle does reverse. And savvy investors know that corrections, and even bear markets, provide ideal opportunities to purchase stocks of great companies at bargain prices.
This time is no different. You have to know where to look. Fortunately, you don’t have to look far. The stocks we’ve included in this report represent some of the top picks from different sectors.
Now is not the time to panic. These companies are just a few of the many attractively priced businesses that represent a buy and hold opportunity as we move into 2019. And as you’re moving into 2019, you should consider becoming a subscriber to MarketBeat All Access which gives you access to our full suite of web-based research tools and proprietary reports for just $39.99 a month.
More Investing Slideshows:
