When savvy investors look to find high-performing stocks they don’t try to chase returns for the next hot stock. They are very methodical and look for stocks that they can buy now and hold for years knowing that they’ll be solid performers. Part of this strategy means looking for companies that are not only outperforming their sector, but also outperforming the broader market.
With the markets on an epic run, there are many analysts pointing at stocks that are ready to decline. But there are stocks that are poised for growth, not only for the rest of this year but beyond
We’ve identified 7 stocks that are poised for exceptional growth in 2019. Some of these names will be familiar to you. Some other names may be hidden gems. These stocks will reward investors for their patience with solid returns for years to come.
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- Autodesk
- Align Technology Inc.
- Jagged Peak Energy Inc.
- ResMed Inc
- Five Below Inc.
- Ulta Beauty
- Century Aluminum
#1 - Autodesk (NASDAQ:ADSK)
Autodesk (NASDAQ: ADSK) - Investors have been rewarding Autodesk despite seeing their sales declining. In a nutshell, they believe in Autodesk’s business model which has seen the software creator change its business model from its focus on licensing to subscription services. As a result, the company has established a recurring revenue stream that is resulting in a price-to-sales ratio that has increased by 283% in the 12 months ending in April of 2018. And going forward, the company shows no signs of slowing down. Its product is unique to the industries it serves and it is benefiting from a growing customer base for their CAD/CAM software. Plus, by going to a subscription model, the company has lowered the cost of entry for getting customers up and running. And once these customers are on board, the perceived low subscription cost gives them a “sticky” relationship with their customers that provides the predictability that investors love.
Analysts are forecasting a 27% increase in revenue for 2019. The company’s stock is up over 121% since the beginning of 2015 and is currently trading around $149.
About Autodesk
Autodesk, Inc provides 3D design, engineering, and entertainment technology solutions worldwide. The company offers AutoCAD Civil 3D, a surveying, design, analysis, and documentation solution for civil engineering, including land development, transportation, and environmental projects; BuildingConnected, a SaaS preconstruction solution; AutoCAD, a software for professional design, drafting, detailing, and visualization; AutoCAD LT, a drafting and detailing software; computer-aided manufacturing (CAM) software for computer numeric control machining, inspection, and modelling for manufacturing; Fusion 360, a 3D CAD, CAM, and computer-aided engineering tool; and Industry Collections tools for professionals in architecture, engineering and construction, product design and manufacturing, and media and entertainment collection industries.
Read More - Current Price
- $307.84
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 13 Buy Ratings, 8 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $302.38 (1.8% Downside)
#2 - Align Technology Inc. (NASDAQ:ALGN)
Align Technology Inc. (NASDAQ: ALGN) - Align Technology is one of the few shining stars in the dental sector. The maker of Invisalign invisible braces and iTero Element intraoral scanner was recognized by Goldman Sachs as one of its top stocks for 2019 with an estimated 22% increase in revenue in the coming year. One of the key anticipated drivers of the company's growth is the popularity of the Invisalign product with a key demographic, millennials. From dating apps to job interviews, these consumers are recognizing the importance of a great smile, particularly with the higher resolution of smartphones. And this type of consumer benefit is not limited to the United States. There is a worldwide market for their products.
Align Technology recently signed an agreement with Aspen Dental for both its iTero scanner and Invisalign product. Aspen Dental is not only the largest network of branded dental care practices; it’s also experiencing tremendously rapid growth. Case in point, a new office opens every five days. In short, there’s a huge and growing market for their products.
Although the company’s stock is selling at a premium over $372 and a P/E ratio of over 89, one analyst considers them to be the best buy in dental despite their high valuation.
About Align Technology
Align Technology, Inc designs, manufactures, and markets Invisalign clear aligners, and iTero intraoral scanners and services for orthodontists and general practitioner dentists in the United States, Switzerland, and internationally. The company's Clear Aligner segment offers comprehensive products, including Invisalign comprehensive package that addresses the orthodontic needs of younger patients, such as mandibular advancement, compliance indicators, and compensation for tooth eruption; and Invisalign First Phase I and Invisalign First Comprehensive Phase 2 package for younger patients generally between the ages of six and ten years, which is a mixture of primary/baby and permanent teeth.
Read More - Current Price
- $223.87
- Consensus Rating
- Hold
- Ratings Breakdown
- 5 Buy Ratings, 4 Hold Ratings, 1 Sell Ratings.
- Consensus Price Target
- $276.38 (23.5% Upside)
#3 - Jagged Peak Energy Inc. (NYSE:JAG)
Jagged Peak Energy Inc. (NYSE: JAG) - The energy sector is notoriously volatile but one company poised for massive growth in 2019 is Jagged Peak Energy. The Denver-based exploration and production (E&P) company have an expected 5-year growth rate of 76.4%, with a 61.5% growth rate in 2019. Most of its revenue comes from the oil and gas found in the southern Delaware basin in Texas. One of the reasons investors like JAG is that while other E&G companies saw a decline in revenue during the tough market of 2015 and 2016, JAG actually saw their revenues double during those years. And if that wasn't enough they tripled their revenue in 2017.
Currently, the company is forecasting 2018 profits to come in at 27 cents per share. That number, however, is forecast to rise to 76 cents per share in 2019 and rising above a dollar per share in 2020. The stock does not have a long history, and with the stock trading at just over $12 per share, it’s down about 10% from its initial public offering (IPO).
About Jagged Peak Energy
Jagged Peak Energy Inc operates as an independent oil and natural gas company. The company focuses on the acquisition and development of unconventional oil and associated liquids-rich natural gas reserves in the Southern Delaware basin, a sub-basin of the Permian basin of West Texas. As of December 31, 2018, it held an 87% average working interest in approximately 79,500 net acres with an estimated net proved reserves of 118,890 thousand barrel of oil equivalent, as well as owned a 89% average working interest in 143 net productive wells.
Read More - Current Price
- $8.23
- Consensus Rating
- N/A
- Ratings Breakdown
- 0 Buy Ratings, 0 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- N/A
#4 - ResMed Inc (NYSE:RMD)
ResMed Inc. (NYSE: RMD) - ResMed is a proven performer in the field of medical devices and cloud-based software applications. The company's stock has seen a 47% year-over-year growth. This not only dwarfs the industry's growth of 15%, but it also beats the S&P 500's average of 12.5%. ResMed’s 9.3% historical growth rate also beats its industry average of 6.9%. A key reason for the stock’s performance is that the company’s products target two medical conditions, sleep apnea and chronic obstructive pulmonary disease (COPD), which gives it a market that has grown to two million patients daily. This allows it to help patients while helping reduce healthcare costs. A win-win that has allowed the company to deliver an annual return to its shareholders of nearly 12 percent (11.9%), which is 478 basis points higher than the S&P 500.
The market for its products shows no signs of shrinking. A recent study cites that approximately 1 in 4 adults has sleep apnea. And COPD is a disease that affects more than 200 million worldwide and is the reason for over $50 billion in health-care costs in just the United States. And that's an important point. Because in addition to its growth in the United States, the company is reporting expansion opportunities in large markets such as Latin America, Eastern Europe, China, and India.
About ResMed
ResMed Inc develops, manufactures, distributes, and markets medical devices and cloud-based software applications for the healthcare markets. The company operates in two segments, Sleep and Respiratory Care, and Software as a Service. It offers various products and solutions for a range of respiratory disorders, including ApneaLink Air, a portable diagnostic device that measures oximetry, respiratory effort, pulse, nasal flow, and snoring; and NightOwl, a portable, cloud-connected, and disposable diagnostic device that measures AHI based on derived peripheral arterial tone, actigraphy, and oximetry over several nights.
Read More - Current Price
- $241.55
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 6 Buy Ratings, 5 Hold Ratings, 1 Sell Ratings.
- Consensus Price Target
- $225.70 (6.6% Downside)
#5 - Five Below Inc. (NASDAQ:FIVE)
Five Below Inc. (NASDAQ: FIVE) - Teenagers and clothes go together like peanut butter and jelly. The presence of a market that’s not going away anytime soon underpins the stock’s performance. But how does that translate to the real world. Same-store sales increased by 2% in the company’s 2016 fiscal year. In retail, when brick-and-mortar stores are still going out of business at an alarming rate, that number speaks loudly. So what’s the secret? They make discount shopping chic. And when you’re competing with an online behemoth like Amazon, not to mention proven performers like WalMart, you have to give consumers a reason to shop with you. FIVE relies on a concept that prices items at $5 and below. This model is not only attractive to their pre-teen and teenage audience, but also to their parents. And Five Below is betting on themselves by continually opening stores and has a plan to grow revenues by 20% every year until 2020 and beyond.
About Five Below
Five Below, Inc operates as a specialty value retailer in the United States. The company offers range of accessories, which includes novelty socks, sunglasses, jewelry, scarves, gloves, hair accessories, athletic tops and bottoms, and t-shirts, as well as nail polish, lip gloss, fragrance, and branded cosmetics; and personalized living space products, such as lamps, posters, frames, fleece blankets, plush items, pillows, candles, incense, lighting, novelty décor, accent furniture, and related items, as well as provides storage options.
Read More - Current Price
- $83.10
- Consensus Rating
- Hold
- Ratings Breakdown
- 7 Buy Ratings, 12 Hold Ratings, 2 Sell Ratings.
- Consensus Price Target
- $106.40 (28.0% Upside)
#6 - Ulta Beauty (NASDAQ:ULTA)
Ulta Beauty (NASDAQ: ULTA) - Another retail play for 2019 is Ulta Beauty. This Illinois-based company is another example of a company that is opening stores at a time when the overall trend is to closing stores. As of January 2017, the company operates 974 stores and has plans to expand that footprint to 1,700 stores over the next 10 years. A common theme for successful businesses in general, and brick-and-mortar retail, in particular, is the ability to create a differentiated customer experience. Ulta provides their customers with such an experience which allows them to be a strong niche player in a market where no one company has a large market share. In fact, the real story of Ulta is not where they are, it's where they're going. The company has just 4% of the $127 billion market. However, the company has annual revenue totaling nearly $5 billion. And as long as consumer confidence remains high, the company should continue to grow their customer base, because the skincare/cosmetic industry proves to be resilient in any market.
About Ulta Beauty
Ulta Beauty, Inc operates as a specialty beauty retailer in the United States. The company offers branded and private label beauty products, including cosmetics, fragrance, haircare, skincare, bath and body products, professional hair products, and salon styling tools through its Ulta Beauty stores, shop-in-shops, Ulta.com website, and its mobile applications.
Read More - Current Price
- $343.26
- Consensus Rating
- Hold
- Ratings Breakdown
- 12 Buy Ratings, 10 Hold Ratings, 2 Sell Ratings.
- Consensus Price Target
- $420.71 (22.6% Upside)
#7 - Century Aluminum (NASDAQ:CENX)
Century Aluminum (NASDAQ: CENX) - Tariff stocks will continue to be in the news in 2019. But it’s important for investors to pick the right ones. Century Aluminum is projected to reach 117.7% growth in 2018, 154% in 2019, and has an expected 5-year growth rate of 154%. Century Aluminum is the second-largest producer of aluminum and is looking to grow as it restarts idled capacity. What analysts are looking for from CENX is consistency. They have become used to seeing the up-and-down performance in the company's top-line and bottom line performance. But since a strong 2017 (net profit came in at 51 cents per share), they are enjoying hearing the company anticipating that not only will they remain profitable in 2018, but they should increase their growth to around 82 cents per share. They are also projecting 2019 to be even better at $2.12 per share. This increased growth in forward earnings should help dramatically lower their P/E (currently just over 15) to a much more appealing multiple at just above 7.
The stock is currently trading at just over $12.20 per share, but with consistent profit results giving investors confidence in future growth, some analysts are seeing the stock tripling in value from today’s levels.
About Century Aluminum
Century Aluminum Company, together with its subsidiaries, engages in the production of standard-grade and value-added primary aluminum products in the United States and Iceland. It also owns and operates an alumina production facility in Iceland, and a carbon anode production facility in the Netherlands.
Read More - Current Price
- $23.08
- Consensus Rating
- Hold
- Ratings Breakdown
- 1 Buy Ratings, 2 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $21.00 (9.0% Downside)
For investors looking to find growth stocks, they will often look at metrics like the price-to-earnings (P/E) ratio to ensure that they are not buying stocks that are overvalued. However because the P/E ratio can be an indicator of value, it can work as a hindrance to growth.
If you’re looking for rapid growth, you often need to look at stocks that may appear, at first glance, to be overvalued. In this context, a higher P/E ratio can be the catalyst that pushes a stock’s price higher. But that doesn’t mean you have to be limited to stocks like Amazon and Apple. While it would be hard to argue that these stocks don’t present exceptional growth opportunities for 2019, there are other options for investors that may cost them a fraction of the per share cost of these behemoths.
The stocks in this report all have attractive earnings per share (EPS) growth outlooks that are making them candidates for monster growth not only right now but beyond. For investors, they reflect the best of both worlds, they can provide exceptional short-term growth with a reason to hold them and reap the benefits for several years.
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