5 Stocks to Watch in 2018
By: Yorkville Advisors
A new year means new stock picks for ambitious traders. 2017 saw
a rise in e-commerce and tech and these stocks are likely to
continue to outperform in the years to come. Furthermore, new
tech companies on the horizon are predicted to have stellar initial
public offerings going forward. To help you take your portfolio to
the next level this year, here are the top five stocks to watch in
1. Baozun (NASDAQ: BZUN)
If you’re not keeping an eye on Chinese e-commerce, then you’re
missing out on what could be the most profitable sector to watch
in the years to come. With the downfall of American physical retail
showing no signs of slowing down (as evidenced by Sears’ surge of
store closings and layoffs at the very end of 2017), e-commerce is a
safer bet than ever.
While President Trump’s campaign promises to crack down on
China made some investors skittish about the Chinese retail
market, there are currently no signs that the current
administration has any intention of cracking down on cheap goods
sourced and purchased from the region. Baozun is China’s leading
company in connecting brands with e-commerce platforms. While
they previously did business in shipping, they’ve recently
restructured which part of the supply chain they emphasize.
Moving out of shipping and into the brand-consumer connection
means that they have fewer costs and higher profits. Baozun is a
major player to watch in 2018.
2. Shopify (NYSE: SHOP)
The fall of physical retail and the rise of e-commerce is too huge to
only have one e-commerce pick on this list. Shopify is a Canadian
company that helps retailers to take their brand digital. As more
and more businesses begin to regard physical commerce as a fool’s
errand, expect more brands to take their business online and for
companies like Shopify to boom. While some investors are worried
that Shopify’s initial boom may be showing signs of slowing down,
their price-to-earnings ratio remains stellar and the stock
continues to rise.
3. Bank of America (NYSE: BAC)
Don’t expect the Republican tax bill to not have an impact on the
market as we dive into 2018. As interest rates rise, bank stocks are
always a safe bet and lower tax rates for corporations can equal a
booming financial sector. Don’t be surprised if there’s a bit of up
and down as the tax bill is implemented; however, if you’re looking
for a low risk investment to hold long and to cash out big, Bank of
America is the one to watch.
4. Apple (NASDAQ: AAPL)
You can’t blame traders who have “Apple fatigue.” Apple is
included in “stocks to watch” lists fairly consistently, but these
recommendations aren’t pulled out of thin air. When a company’s
consumer base consistently seeks to replace or upgrade their
devices every few years, you can argue that the company is
essentially operating on a subscription model.
While some investors may have been disappointed by Apple in the
past, the tech mammoth had a record-breaking holiday season.
Reports that the company purposefully slows older devices may
have made some investors leery, but with stock prices already
climbing and Apple assuring their loyal brand devotees that the
problem will be remedied, this stock remains a top pick going into
the new year.
5. Spotify (NYSE: To Be Announced)
Spotify quietly began the process of filing for its initial public
offering, utilizing the unconventional method of a direct listing,
whereby current investors have the option to cash out and the
company can avoid raising new capital for its IPO. While the stock
might not be available to investors yet, it’s projected to enter the
market sometime in 2018.
Spotify is a music streaming service that has become as ubiquitous
to the average consumer’s phone as Netflix is to the average
consumer’s laptop. With a growing consumer base, this is
undoubtedly one of the top stocks to watch in 2018. Those critical
of the potential of Spotify to be a competitive bet frequently cite
the failure of Snapchat (NYSE: SNAP) to wow investors after its
IPO last year. However, while financial experts question whether
or not Snapchat has a viable income model, Spotify steadily brings
in both subscription and ad revenue, making for a much more
lucrative investment. While some traders may have been burned
by IPOs like Snapchat in the past, never discount the potential of
new tech and digital offerings.
As you can see, tech remains a significant theme when it comes to
lucrative stocks to watch. Now is the time for any investor who is
still waiting on the resurgence of successful traditional retail to
accept the signs of the times and move their money to e-
commerce. Furthermore, don’t count the financial sector out. The
tax bill is going to mean a boom for banks and lenders.