Summer’s almost here, but don’t let your portfolio take a vacation. Put these killer investments to work for you.
While not the official start of summer, Memorial Day still serves a nice purpose in addition to its traditional role of honoring members of the United States armed services.
We’ve turned the corner towards warmer (if weather forecasts are correct, much warmer) days and nights, and for investors, a general slowdown in activity as the summer moves on.
But this Memorial Day weekend, let’s instead focus on where to put your money to work.
Here are 5 Memorial Day Stocks to stock up on when you finish up your weekend activities…
Really, there seems to be no end to Jeff Bezos’s vision for Amazon:
- A recent dive into the driverless car model
- Relentless refinement and development of its delivery and fulfillment models
- Growth in Amazon Prime’s subscriber service
- The success of its Amazon Web Services
While still trading at a hefty 300x P/E, Amazon may finally be getting to a point where it drives a profit every quarter; Q1’s nice top and bottom line gains were icing on the cake of a four-straight quarter run of profits.
Analysts are taking note, with recent upgrades and target prices virtually all north of $800 per share, a nice 15% bump from today’s range.
Don’t be left behind on Amazon…
Honestly, what’s not to like about Facebook? It’s a part of so many lives, and it continues to thrive even when it makes a bit of a societal mistake.
Need some investment proof of FB’s popularity?
Facebook was hedge fund managers’ most bought stock in the first quarter according to FactSet. Indeed, $3 billion worth of the company’s shares were scooped up, even as those same managers dumped Apple Inc (NASDAQ:AAPL) stocks to the tune of $7 billion.
And why not?
Facebook now claims over 1 billion daily users, driving continued top and bottom line growth and moving the stock price up around 9% during the first quarter.
FB’s rise is expected to continue, with MKM Partners analyst Rob Sanderson placing a $150 per share target on FB, based on its growth in advertising revenues.
You can certainly fight the tape and analyst herd on FB if you want, but at a reasonable P/E of around 70x trailing earnings, FB has room to run this summer.
Time to jump in…
Despite a three-week drenching along the Atlantic coast, residents are being told that they are still below normal precipitation levels for the year. Indeed, there are still swaths of drought in the U.S. heading into the summer.
New Jersey-based AWK is all about water: It’s the largest publicly traded U.S. water and wastewater utility company, serving 15 million customers with 48,000 miles of pipeline across 47 states and Ontario, Canada.
Despite a modest $13 billion market cap, American Water Works is a nice little powerhouse of growth; its operating revenues have a 4% compound annual growth rate since 2010, well on its the way toward its 7-10% growth goal between fiscal 2016-2020.
While you wait for AWK to achieve that goal, look at how nicely you’ll be rewarded with AWK’s growing dividend:
Look, we can all do our part to lessen the water shortage. An investment in AWK can help investors’ portfolios, too.
The telecommunications sector is now basically a two-horse race: Verizon Communications (NYSE:VZ) and AT&T. Their business models have become quite diverse, with VZ getting out of wire lines (a huge issue for its union) and consolidating along the wireless model. Meanwhile, AT&T put its efforts into creating bundles for wireless, wireline, television and broadband.
AT&T’s purchase of DirecTV has been a boon for the company, from the NFL’s Sunday Ticket Package to a new Internet-streaming service that, according to John Divine at InvestorPlace, will come in three different bundles.
It’s enough to make Netflix, Inc. (NASDAQ:NFLX) nervous and AT&T investors giddy.
Now, don’t kid yourself: AT&T is still a bit of a stodgy play. For a high-yielding dividend player (4.95%), its recent annual increases are a tad stingy. T’s annual increases amounted to $0.01 per share since 2011 according to Dividend.com.
But if you can hang in for the longer term, AT&T’s efforts should be worth the effort.
While Stephan Curry and his Golden State Warriors teeter on the brink of elimination (as of this writing), Under Armour is thriving on their court, if not on the New York Stock Exchange.
UA’s stock had a rather dramatic pullback this past month, down over 15% from a recent peak at $47 per share. Are investors bailing on any recent news? Or is it a bit of profit taking?
It can’t be the news.
UA’s first quarter revenues grew over 20%, operating income was up 32%, and net income soared 63%. Moreover, UA announced an increase in full year 2016 revenue growth.
UA’s footwear and apparel sectors rose 64.2% and 20% respectively, a great sign for UA’s push into these growing markets.
Yet another piece of news announced this week may have stolen the show: UA walked into Nike Inc’s (NYSE:NKE) collegiate backyard and signed Pac-12 powerhouse and iconic athletics program UCLA to a 15-year, $280 million shoe and apparel contract effective July 2017. It’s the biggest contract in collegiate history.
It’s also a game-changer moment for the UA brand, which languishes on the West Coast under the Nike goliath.
Perhaps investors decided UA’s trailing 48 P/E was a bit rich for their blood, or maybe they believe the UA story is overblown.
Perhaps they should instead buy a pair of those UA sneakers and try them on for size between Memorial Day and Labor Day…and watch the stock recover, too.
In the meantime, enjoy your Memorial Day weekend!
(Marc Bastow is long VZ.)