You don’t have to time the market perfectly to amass wealth over the long run.
You just need to buy the right stocks.
The recent market correction caused by the COVID-19 pandemic is a perfect example…
Nobody knew how long the decline would last. In fact, most analysts thought the drawdown in stocks would last a lot longer than it did.
But we knew investors who continued to buy the best stocks on the market would be handsomely rewarded.
And that’s turned out to be correct.
That’s why we weren’t worried about trying to time the bottom. Since it’s near impossible to get that right, we simply recommended buying the best stocks on the market and holding them over the long term.
The returns we’ve helped our readers generate speak for themselves:
…82% on Zoom Video Communications Inc. (NASDAQ: ZM) since April
…112% on Square Inc. (NYSE: SQ) since May
…284% on Workhorse Group Inc. (NASDAQ: WKHS) since June
The best part is, we’re still finding opportunity in a select group of stocks with similar return potential today.
To get you started, here's our list of the best stocks to invest in right now.
They've each been picked by Money Morning's team of market experts, each with decades of trading and investing experience.
Our experts don't work for big banks or brokerage houses. They aren't money managers hoping to skim off a percentage of your portfolio. They are offering their experience and expertise directly to our readers because they are sick of Wall Street parting everyday folks with their money.
They've identified these seven stocks as having outstanding short-term and long-term profit potential.
This could be the only chance you have in your life to get into great companies at such low prices. Let's get started.
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Who They Are: Alibaba Group Holding Ltd. (NYSE: BABA) is one of the world's largest e-commerce companies, with a market cap over $540 billion. It operates a network of sites in China.
The company isn't just focused on e-commerce. Alibaba has expanded into cloud computing, digital media, entertainment, and even healthcare platforms. Because of this growth, Alibaba is often referred to as the "Amazon of China."
In fact, its earnings over the last 12 months doubled Amazon's. If it were priced the same way Amazon was, its stock would skyrocket 298%.
Why Now Is the Time to Buy: Money Morning Executive Editor Bill Patalon has called Alibaba a "single-stock wealth machine" and "one of the single greatest wealth opportunities of our lifetime." He sees every share of Alibaba you buy – trading around $200 at the start of Q2 – being worth $2.1 million in four decades.
There are three big reasons behind Alibaba's potential…
Why BABA Is a Buy: The Biggest Shopping Day of the Year
Alibaba has turned "Singles Day," an anti-Valentine's Day tradition, into a global shopping event. In November 2019, more than $38.4 billion was spent by more than 500 million people worldwide over Alibaba's networks of sites. It was the most money ever spent on a single shopping event. The number of buyers was more than the combined population of the United States, Mexico, and Canada.
The buying was so frenzied that more than $1 billion was spent by consumers in just 68 seconds. Ten billion dollars was spent in the first 30 minutes.
That's more than twice what shoppers spent on Black Friday and Cyber Monday last year combined.
There is truly nothing like Singles Day anywhere else in the world. And the holiday is only growing.
Those 2019 numbers represented a 25% increase from 2018.
That staggering sales growth has translated to a significant earnings boost…
Why BABA Is a BUY: Alibaba Is an Earnings Machine
For such a large company, Alibaba is still growing its earnings at a breakneck pace.
For the full year 2020, BABA is expected to earn $7.20 per share. That would be a 29% increase from FY 2019.
Those earnings are expected to climb 23% to $8.80 in 2021 and 27% to $11.24 in 2022.
Those estimates are likely conservative.
After all, Alibaba has crushed earnings estimates by an average of 21% each of the last four quarters.
Revenue is expected to grow at a similar pace. Consensus estimates call for 32% revenue growth in 2020 and 30% in 2021.
It's really no surprise the company has an impressive 34.4% profit margin. Since its founding in 1999, Alibaba has had one of the most innovative leadership teams in the world…
Why BABA Is a Buy: The Right Leader Is Guiding the Way
Singles Day 2019 was the first since visionary founder Jack Ma left the company.
There was a lot of nail-biting on Wall Street when Ma's retirement was announced in 2018. But in fact, the care with which Ma's succession was handled only demonstrates what an exceptionally well-run company Alibaba is.
CEO Daniel Zhang, who took over as executive chair in September 2019, was the creator of the Singles Day sales event.
Since he became CEO in 2015, Alibaba became the first Asian company to pass $400 billion in market value and has emerged as one of the top 10 most valuable public companies in the world.
Even with Ma's departure, there's no reason to think the company will slow down. Between Alibaba's business model and rapid growth in Asia, this is the online retail giant with the most room to grow in the next few decades.
Our New Favorite 5G Stock to Buy: The 5G industry is on track to be worth $11 trillion by 2026 – and one company is absolutely essential to its success. Get this pick for free here…
Who They Are: Adobe Inc. (NASDAQ: ADBE) is highly regarded for products like Illustrator for creating, editing, and managing graphics as well as Photoshop for managing and editing pictures.
They're products that Money Morning Defense and Tech Specialist Michael A. Robinson has been using for decades.
Like most technology companies, Adobe continuously updates its offerings. The company keeps them current with contemporary needs like the work-from-home trend that’s widely expected to be permanent for many companies even after the pandemic.
Why Now Is the Time to Buy: In a wild-and-wooly market like the one we're navigating now, focusing on a company whose products, services, and technologies you know, like, and use (even more when working from home) can give you one heck of a competitive advantage: You'll zero in on discount stocks before the deep-pocketed investment pros even realize there's a bargain to grab.
That's why Robinson loves the stock so much. Throughout his more than 30-year career, Robinson has relied on Adobe and its suite of products.
Why ADBE Is a Buy: It Knows How to Sell
Back in 2009, the firm quietly began moving from a "sales" model to a de facto "rental" model. This means users pay monthly fees on an ongoing basis to gain and maintain access to a range of products delivered via the Web, or "the Cloud."
The timing of this shift was perfect.
It's not just because the global cloud market is growing at 21.4% a year and will be worth $185.8 billion by 2024, according to KBV Research.
It's something far more fundamental. A well-run firm that uses the cloud to deliver software as a service (SaaS) has two factors operating in its favor that hardware companies can only dream about.
The first is high profit margins. The second – which is even better – is recurring revenue: The money literally rolls in month after month after month.
The firm says that – as of the end of this year, when you add up of all its various services – its total addressable market will be $80 billion.
Over the past three years, Adobe has grown its sales an average of 24% annually, meaning the firm is doubling sales roughly every three years. But it did even better in its most recent quarter, with sales rising 33% on a year-over-year basis.
At that rate, sales could hit $22.4 billion by the end of 2023. By 2026, they could come in at a stunning $45 billion.
Why ADBE Is a Buy: Excellent Partnerships
Robinson is always on the hunt for well-run firms captained by top-notch leaders.
One way you can judge that is by looking at key partners. And Adobe is working closely with Microsoft Corp. (NASDAQ: MSFT), one of the world's very best cloud-services players – and a firm that itself made the jump from software publisher to the SaaS model.
Microsoft ranks No. 2 in cloud hosting behind Amazon Web Services. Back in December, Adobe and Microsoft unveiled a sweeping alliance. Adobe Experience Cloud and Adobe Document Cloud integrated with Microsoft's Dynamics 365, Office 365, LinkedIn, and Azure cloud infrastructure services.
The move gives Adobe access to 180 million of Microsoft's commercial customers. Adobe has said it's getting a "phenomenal response" for the Microsoft integration.
Why ADBE Is a Buy: This Stock Could Double Your Money
To find stocks that can jump 100%, you need to look at the firm's earnings, its earnings growth rate – and then calculate how long it will take to double profits.
By doing that, we can figure out how long – on average – it should take for the stock price to double, as well.
With Adobe, after a detailed review of its financials, Robinson projects earnings per share (EPS) will grow by an average 30% over the next three years.
This is a conservative forecast.
The fact is that – over the past three years – Adobe has grown its EPS at an average annual rate of 37%.
That figure dropped a bit in the most recent quarter – but only to 33%.
To be conservative, Robinson reduced his growth-rate estimate to 30%.
By inputting that number into his "doubling calculator" (an equation mathematicians refer to as the "Rule of 72"), we find that the stock should double in 2.4 years (No. 72/EPS Growth Rate of 30% = Doubling Time Frame of 2.4 years).
For the 12-month stretch that ended Feb. 19 – when Adobe hit its most recent high – the company's shares had risen 48.7%. That's more than double the return of the S&P 500, which rose 21.8% during that same time frame.
WARNING: 22 million shares of this stock trade hands every day – make sure you’re nowhere near it. Click here to get the ticker…
Who They Are: Eli Lilly & Co. (NYSE: LLY) is an American pharmaceutical company that's been working to develop treatment for the novel coronavirus. After partnering with a therapeutic antibody discovery company, LLY has been searching for antibodies that can defeat COVID-19.
It's a healthcare behemoth with a market cap nearing $150 billion. It also boasts more than 33,000 employees around the world.
Eli Lilly made headlines in April when it capped the out-of-pocket cost of its insulin to $35 per month in the wake of the coronavirus pandemic.
The company is currently conducting phase 3 of its controlled study to evaluate the efficacy and safety of its COVID-19 antibody treatment. Four hundred participants are enrolled in the trial with more data expected in the next few months.
Why Now Is the Time to Buy: With a beta of just 0.22, investors in Lilly today are not taking outsized risks to generate returns going forward.
As a pharmaceutical company with steady and quantifiable cash flows, there is little to fear about the future when owning a stock like Lilly. After all, the company has total cash of $2.4 billion on hand and is growing earnings significantly year over year (more on that later).
The biggest risk in owning Lilly today is mostly ephemeral. Investors must be rightly concerned about government intervention with respect to drug prices. In March, the U.S. federal government announced it would cap insulin payments at $35 per month for Medicare patients. But LLY quickly addressed those concerns, capping payments itself.
And as you'll see, the growth story for LLY significantly outweighs any risks.
Why LLY Is a Buy: Earnings Growth Is Extraordinary
It's not often you find a biotech stock with the type of earnings growth you have with LLY.
In 2019, LLY posted earnings per share of $6.04. In case that wasn't impressive enough, the firm is projected to boost that total 11.4% to $6.73 in 2020. Looking ahead to 2021, analysts estimate another 15% jump to $7.70 per share.
And it's a likely bet that Eli Lilly will surpass those estimates. In each of the last four quarters, LLY has topped analysts' estimates by more than 6% on average.
Revenue projections look excellent as well. Sales are expected to jump nearly 7% in 2020 to $23.8 billion. In 2021, the projections call for 6.7% revenue growth to $25.4 billion.
Why LLY Is a Buy: A Winning Drug Pipeline
One of the biggest indicators of success for biotech stocks is a strong drug pipeline.
Currently, Eli Lilly has 27 different therapies in phase 1 trials. Those are designed to treat a variety of ailments including cancer, pain, diabetes, Alzheimer's, and dementia.
It also has 10 different drugs in phase 2 testing, along with 15 treatments in phase 3 testing.
Two of the company's biggest wins in 2019 were the approval of new drugs Reyvow and Baqsimi. They treat acute migraines and hypoglycemia in diabetes respectively.
Company officials anticipate two more potential launches in 2020. That's on top of the seven they anticipate by 2023.
Plus, the company announced in April 2020 that it would be testing its drug baricitinib on patients with severe COVID-19. The drug is designed for rheumatoid arthritis, but any viability with COVID-19 patients would obviously be a huge breakthrough for the stock.
Why LLY Is a Buy: A Rock-Solid Dividend
It may not be flashy, but at 2%, LLY offers one of the most rock-solid dividends you'll find in the biotech sector.
As we mentioned earlier, its cash on hand total of $2.4 billion provides it a solid base. And as earnings continue to grow, paying (and growing) its dividend should be no problem at all.
Not to mention, LLY has raised its dividend payments every single year since 2013.
With Eli Lilly, you get the upside of one of the biggest biotech companies in the world, along with the safety of a well-run blue-chip stock.
Who They Are: Constellation Brands Inc. (NYSE: STZ) is the beverage giant behind Corona beer, Ravenswood wine, and Svedka vodka. Since 2017, the company has been expanding into the legal cannabis market. And it's the best cannabis stock to buy before legalization becomes even more widespread.
In 2017, Constellation Brands became the first Fortune 500 company to invest in legal cannabis, buying a $191 million stake in Canopy Growth Corp. (NYSE: CGC). Since then, it has upped its investment to more than $4 billion.
Its favorable position to capture much of the recreational cannabis market has analysts at the National Institute of Cannabis Investors (NICI) calling it a "stock to retire on."
Why Now Is the Time to Buy: Constellation is a powerhouse company you'll want to keep in your portfolio on a very long-term basis – because it's only going to grow every year. Its beverage lineup alone makes it a great buy.
And as the market for cannabis-infused beverages opens up in Canada and elsewhere, its partnership with Canopy gives it a leg up now that cannabis-infused beverages are legal in Canada.
It's more than legalization fueling Constellation Brands' rise. There are three reasons this stock will be making shareholders a fortune…
Why STZ Is a Buy: Constellation Is Already an Outstanding Blue-Chip Company
While many cannabis companies are young startups without a proven track record, Constellation has already built a massively profitable empire with its beverage brands, averaging over $2 billion in profits each of the last four years.
The road to success wasn't always an easy one. Going back to the late 1980s, Constellation lost 70% of its value over three and a half years. But it bounced back in a big way in the 1990s, and it has since acquired some of the most recognized brands in beer, wine, and spirits.
Analysts at NICI have called CEO Bill Newlands and the controlling shareholders "the best management team of any company in any industry in the world."
Constellation also pays a dividend, which you won't get from any pure play cannabis stocks. The 2% dividend yield can help you ride out any turbulence to greater and greater wealth.
Why STZ Is a Buy: Canopy Is One of the Largest Growers in Canada
Constellation now holds a 38% percent stake in Canopy. So an investment in Constellation is also an investment in Canopy – which is definitely to investors' advantage.
Canopy was already one of the dominant players in the Canadian medical cannabis market when Constellation made its investment. Canopy has the highest revenue of all Canadian marijuana companies. Now armed with a multibillion-dollar war chest, Canopy has made a slew of acquisitions all around the world.
That includes a deal with U.S.-based Acreage Holdings Inc. (OTCMKTS: ACRGF), which sets up a potential acquisition that will be triggered if the U.S. federal government legalizes cannabis.
The move ensures that Canopy – and Constellation Brands – will be ready to pounce if the U.S. market opens up on a broad scale.
Canopy isn't limiting its scope to North America either. It has acquired cannabis enterprises in European countries as well, including Spain and Denmark. In May 2019, Canopy acquired the German company Cannabinoid Compound Co., or C3, the largest CBD-based pharmaceuticals company in Europe.
At this point, you might be tempted to buy shares of Canopy too. There's certainly nothing wrong with that. But buying Constellation gives you an extra level of profit potential. Here's why…
Why STZ Is a Buy: Cannabis Beverages Are Ready to Explode
As of December 2019, cannabis-infused beverages became recreationally legal in Canada. And they are a prime candidate to take over as the cannabis consumption method of choice for a number of reasons…
First, they are simply a more familiar option to many people. A Canadian government survey showed 77% of adult residents drink alcohol, but only 17% smoke.
And unlike alcohol, cannabis is calorie-free, giving drinkers an alternative that won't contribute to weight gain. (Researchers are currently working out ways to eliminate the infamous "munchies" experienced by some marijuana users.)
Plus, cannabis doesn't cause hangovers.
So Constellation and Canopy have a chance to attract not just cannabis users looking for new consumption methods, but also drinkers who want the kick without the side effects.
Constellation already has a dominant beverage empire. Add cannabis to the mix, and the sky's the limit.
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Who They Are: Microsoft Corp. (MSFT) needs no introduction. It's one of the biggest tech companies in the world, with more than 144,000 employees.
The company is a household name due to the success of its software products, as well as its productivity products like Microsoft Office and Office 365 Security. But it's become much more than the software company Bill Gates founded in 1975.
And it's the favorite pick of Money Morning Technical Trading Specialist D.R. Barton, Jr., right now.
Why Now Is the Time to Buy: "If history has taught us anything, it's that the economy and the market are resilient. In time, we'll get through this crisis," D.R. said.
We’ve already seen stocks bounce back in a big way, but that’s just paving the way for even bigger growth once the economy rebounds.
And Microsoft will continue to lead the way.
To this point, MSFT's peak-to-trough drop during the outbreak crisis was only around 27%, and it has rallied well (57%) since mid-March.
Don’t expect that to let up either, especially as the economy recovers. Microsoft could be the next company to reach a $2 trillion market cap.
Why MSFT Is a Buy: Its Strong Core
MSFT stock has been a victim of the larger market correction but is poised to continue one of the biggest bounce-backs once the COVID-19 virus is brought under control. Microsoft was one of the best stocks on the planet going into the pandemic and still will be coming out of it.
A big reason for its comeback: It's a cash machine.
"My favorite fundamental metric for stocks is how much net cash flow from operations they generate because it gives such a pure picture of how the core business is doing," D.R. said.
Here's how those numbers have looked for the past four years: 2016 = $33.3 billion; 2017 = $39.5 billion; 2018 = $43.9 billion; 2019 = $52.2 billion. That's some impressive growth in cash generation.
So, when the market does come back into bull mode, MSFT will be one of the biggest winners.
Why MSFT Is a Buy: A Leader in Cloud Computing
Its cloud computing arm continues to thrive, growing revenue and market share faster even than the juggernaut that is Amazon.
Back in 2018, 80% of all enterprises were running their applications through Amazon Web Services (AWS). But by the end of that year, the adoption rate for Microsoft Azure jumped to 58%.
Microsoft’s Azure even won a coveted $10 billion cloud computing contract with the U.S. Department of Defense over AWS in 2019.
Cloud-computing platforms and services are an essential part of enterprises in today's market – increasing the number of new digital businesses and operating an IT infrastructure for existing conglomerates.
In 2019, 84% of all major enterprises had a multi-cloud system to help manage their operations. And large public companies were spending, on average, $1.2 million on cloud-computing technology.
According to Statista, the global cloud computing industry will hit $236 billion in 2020. That's up a whopping 33% from 2018.
And cloud computing isn't the only industry Microsoft is a major player in…
Why MSFT Is a Buy: The Growing E-Sports Market
"Let's not forget the substantial video game segment of MSFT's business, which actually could get a boost from the coronavirus due to the massive amount of people being forced to stay at home," D.R. said.
During this time of social distancing, numerous video game platforms have reported significant spikes in interest, particularly in e-sports.
The new Xbox Series X game console – scheduled to be released later this year - carries big expectations in the gaming community and should provide MSFT with a massive amount of revenue.
D.R. recommends beginning to take a position in MSFT now, and to continue buying shares on any pullback.
Who They Are: Facebook Inc. (NASDAQ: FB) is the most well-known social media company in the world. In fact, at the end of 2019, the company reported roughly 2.5 billion active monthly users. That's nearly one out of every three people on Earth.
The company was famously founded at Harvard University in 2004 by a group of students, including now billionaire Mark Zuckerberg.
In less than two decades, it has become a $750 billion-plus company. It's also one of the most attractive stocks to buy today according to Bill Patalon.
Why Now Is the Time to Buy: Now that we're dealing with a market filled with more risk than just a few months ago, finding "low risk" stocks can help build a strong portfolio foundation.
As Bill points out, Facebook checks three important boxes for "low risk" stocks.
Each of those reasons alone is a great reason to buy a stock. But adding them all up makes FB one of the top stocks to buy today…
Why FB Is a Buy: Facebook Stock May Never Be Cheaper
Bill initially recommended Facebook stock along with Money Morning Chief Investment Strategist Shah Gilani back in February 2014. At the time, it was trading at just under $69.
The stock soared from there.
At the peak of the "Super Bull," it traded north of $224 – for a peak gain of 225%.
Of course, the stock has sold off and started Q2 2020 near $145 per share. Now, it's up 87% to $271 per share.
"For a dyed-in-the-wool contrarian investor like me, a decline of that magnitude in an innovative leader is an unqualified 'interest-peaker,'" Bill said. "And make no mistake; I am interested. That's because in today's coronavirus-ridden, crisis-mode market, this is the kind of stock you want to have in your portfolio."
But not just because of the sell-off…
Just look at Facebook's price/earnings (P/E) ratio. It's right now trading at a "trailing" P/E of 27 and a "forward" P/E of about 19 – in essence, the lowest valuation level in five years.
That's crucial, given the growth Bill projects for Facebook stock…
Why FB Is a Buy: Facebook Has a Massive "Safety Net"
"Classic value investors like Benjamin Graham and Warren Buffett talk extensively about a 'margin of safety' – cash or other assets that provide a company with a cushion against times of trouble," Bill said. "That kind of a financial 'safety net' is great at any time. But during a stretch as uncertain as this one, it can mean the difference between a firm's success or outright failure."
That cash can be used to cover lean periods, to effectively increase earnings per share via stock buybacks, to boost dividends (which is not an issue with Facebook, since it doesn't yet pay a dividend), or to finance – innovation for future growth.
"Cash can also create opportunities: During bear markets, when share prices are down, or during economic downturns or outright recessions, a war chest of cash can allow a company to buy competitors, new technologies, or companies that will pave the way into new venues," he said.
At the close of 2019, Facebook had $54 billion in cash and short-term investments. And that's "net cash," since Facebook has essentially no long-term debt to speak of. That's plenty of cash to invest in growth, which brings us to our next point…
Why FB Is a Buy: Facebook Stock Could Double Your Money
One of the biggest catalysts for Facebook stock is the additional franchises the company has added.
"It's going to better utilize Instagram and WhatsApp – platforms that each boast active daily user bases a billion strong," Bill explained. "The company's Watch TV platform also has great promise. And Facebook has designs on the online dating market in the bigger, developed economies."
Despite controversies that still linger from the last election, Facebook is also one of today's biggest digital advertising platforms – a fact that's only aided by the loyal user base the company possesses.
The coronavirus pandemic is hindering Facebook's ad revenue in the short term – possibly significantly. Of the advertisers that generated $70.7 billion in revenue for Facebook last year, a hefty slice are small businesses that are taking it on the chin as a result of the COVID-19 disaster, MarketWatch says.
In Q4 2019, Facebook reported $21.08 billion in revenue – almost all of it from advertising.
But other pandemic-related gains could provide a longer-term tailwind.
Critical Money Morning PSA: Make sure these “toxic stocks” are nowhere near your portfolio. Click here…
In March 2020, Facebook said total messaging across its ecosystem has rocketed 50% across countries where the virus is escalating – with video messaging on Messenger and WhatsApp more than doubling. In Italy, time spent on Facebook has soared 70% during the pandemic, MarketWatch reported.
"Even when using especially conservative numbers, I still believe that it will allow Facebook shares to zoom about 126% over that stretch of time," Bill said.
"The table below illustrates projected earnings-per-share (EPS) growth on a year-by-year basis. By using the April 2020 trading price of $174 as the baseline and projecting stock-price growth in lockstep with EPS growth, we get to a stock price of nearly $394 in 2025."
Bill thinks this could even be conservative…
| Fiscal Year | Estimated EPS Growth | Projected FB Price @ Year End |
| 2020 | 8.19% | $188.27 |
| 2021 | 18.34% | $227.80 |
| 2022 | 19.25% | $265.69 |
| 2023 | 13.23% | $300.83 |
| 2024 | 11.12% | $334.29 |
| 2025 | 17.86% | $393.99 |
"I'll be candid: This is an overly simplistic way of "modeling" the company's financial trends and forecasting its share price," he said. "But I wanted to find an easy-to-comprehend way to show how Facebook's profits – and its stock price – could advance over the next five years."
Gains of this magnitude – on a low-risk stock with a huge margin of safety – make this a winner.
Who They Are: Apple Inc. (NASDAQ: AAPL) is another household name, and one of the favorite stocks of Money Morning Executive Editor Bill Patalon. Even after the COVID-19 sell-off, AAPL still had a market share of nearly $1.2 trillion. And just five months later, it has become the first $2 trillion company in the world.
Apple is best known for its tech devices, including the iPhone, Mac computer, iPad tablet, Apple Watch, AirPods, Apple TV, and Beats headphones. But the company is more than its devices. Apple is renowned for its Apple Care support services, digital content streaming services, cloud storage, and even the cashless payment service Apple Pay.
Founded in 1976 by Steve Jobs, Steve Wozniak, and Ronald Wayne, the company is now run by one of the world's most recognizable execs, Tim Cook.
Why Now Is the Time to Buy: Because of Apple's long-term performance and reliability, Bill considers it one of his "Accumulate" stocks. That means it's a stock you can keep buying more of year after year to increase your wealth.
"The pioneer and perfector of the 'ecosystem' strategy, Apple sells more than just tech – it sells an end-to-end way of running your life – from work, to health, to communication, to entertainment," Bill said. "Apple's innovative array of devices, software, and services work together seamlessly, which has cemented its reputation for ease of use."
From its all-time high in February, AAPL dropped 29% (at its lowest) during the coronavirus sell-off. But in the five months that followed, it has already rebounded 124.5%.
Why AAPL Is a Buy: It's More Than Its Devices
Apple is not just a device company anymore.
That is, it's not unit sales of Apple devices that are driving the company's growth. It's the services Apple delivers to the devices people already own.
Sales of those services, including Apple Music, iCloud, and the App Store, hit $12.5 billion in the last quarter of FY 2019. That puts them on pace for a record $50 billion annually.
Overall, the company is expected to bring in an astronomical $279 billion in revenue in 2020. That's an increase of 7% from full-year 2019 numbers. In 2021, revenue is expected to jump nearly 10% to $307 billion.
Why AAPL Is a Buy: Apple's Sights Are Set on Healthcare
Growth estimates for Apple are healthy – but we see it as underestimating the profit potential here.
In 2019, Morgan Stanley (NYSE: MS) did a deep dive on Apple's healthcare opportunity. The investment bank concluded that healthcare could add anywhere from $15 billion to $313 billion annually to Apple's top line. The report pegged the midpoint at $90 billion of additional revenue by 2027.
Revenue for Apple's 2019 fiscal year (which ended Sept. 30) was $260.17 billion. So if the Morgan Stanley report is right, that represents a revenue increase of nearly 35%.
And even though we've focused on "services" so far, Apple's devices are still an absolute cash cow…
Why AAPL Is a Buy: Device Sales Are Rock Solid
"The company's roster of devices has grown from the venerable Mac to the iPhone, the iPad, and the Apple Watch, while it has added lucrative services like the App Store, Apple Music, and the new Apple TV Plus streaming service," Bill said.
"With 5G coming, we could see a whole new 'upgrade cycle' heading our way once this pandemic clears," he added.
Plus, Apple's hardware sales continue to expand the installed base of Apple users. In Q4 2019, the company said half the customers who bought a Mac were new to the platform. One-quarter of those who bought an iPad were new to the iPad.
The installed base matters because all those users – approximately 1 billion people own at least one Apple device – are also signing up for Apple's services. And that's where most of its revenue growth is coming from now.
That revenue growth has made Apple one of the richest companies in the world.
"If you include 'treasury securities,' you're talking about cash on hand of $207 billion – or about $47 a share (about 20% of its share price), Bill pointed out. "But Apple carries $117 billion in debt, which brings net cash down to $90 billion. It also pays a modest dividend of $3.28 a share – for a yield of 0.65%."
Yes, stocks are a good addition to any investment portfolio. Over time, stocks can be the most successful way to build wealth.
Stocks typically offer higher returns than other investment vehicles, like real estate and bonds. We identify the factors that make stocks a good long-term wealth builder and give investors those picks regularly.
Trading stocks by trying to time the market for short-term gains is much riskier. It can be done successfully – and profitably – but if it's done without proper research and analysis, it often results in big losses.
One key step to pick the best stocks to buy is to examine a company's earnings reports over time to analyze the firm's financial health. The most important metrics to measure are earnings per share (EPS) and the price/earnings (P/E) ratio.
EPS is the portion of a firm's profit distributed to each share of stock. It's the most basic and important number for measuring a company's profitability, it and helps to calculate valuation metrics like the P/E ratio.
The P/E ratio shows how much investors can invest in a stock to recoup one dollar of earnings. In other words, it shows how much people will pay for every dollar a company earns. The ratio is calculated by dividing the most recent share price by the most recent EPS.
The stocks we mentioned here are a great place to get started. But if you're looking to expand your portfolio, keep up with Money Morning throughout the year.
We'll be offering expert recommendations periodically, and every few weeks, we publish a list of the best stocks to invest in right now based on the most up-to-date information available.
And if you're looking for more ways to profit, we've got you covered…
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Money Morning’s brand-new chief investment strategist is going live in his first-ever segment of BUY THIS, NOT THAT.
In 30 minutes or less, Shah Gilani is going to run through all 50-plus stocks you should know about – for better or for worse.
Shah is not holding back; prices, tickers, and company names will be coming your way fast.
Be ready to take notes! Watch now…
Black Friday is almost here.
Normally, shoppers would be preparing to roll out either Thursday evening or early Friday morning for door-busting retail bargains.
But this year is different.
And that changes things for the best Black Friday stocks to buy.
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Now that we have two very effective coronavirus vaccines heading for the market, things appear to be looking up for the airlines.
Airline stocks have rebounded sharply in the last few weeks as it increasingly looks like we will be able to put the pandemic behinds us next year.
United Airlines (NYSE: UAL), for example, is up 20% since the start of November.
And if UAL rebounds to it's January highs investors could make over 100% profits.
That profit potential has investors asking the same question, "is now the time to buy airline stocks." The answer is yes.
And no.
Unlike many sectors, banks did not rally back to new highs when the Fed and Congress stepped up with stimulus programs to support the economy.
Investors were afraid of what would happen when people could not pay their bills and began to default on credit cards, car loans, and even mortgages.
That has not happened.
Although banks have had to work with some borrowers to restructure their loans and defer some payments, disaster never struck.
Banks entered 2020 with more capital than ever before, and loan portfolios were in pristine condition.
Most banks would have survived the worst the pandemic could have thrown at them.
The presidential election may have gotten most of the headlines, but quietly three states (Maryland, Louisiana, and South Dakota) were all voting on another important issue: sports gambling.
All three states voted to pass bills that will legalize sports betting starting next year.
That should prove to be a major catalyst for sports gambling stocks into 2021 and beyond.
And DraftKings Inc.
(NASDAQ: DKNG) stock is set to be the biggest winner out of all them.
I'll show you why...
Thanks to this week’s Vaccine Jump, nearly every segment of the market was in the green except one: the big “Pandemic Stocks” like Zoom, Clorox, Peloton, and the like.
While these “Pandemic Stocks” will naturally be marginalized once normality returns, it’s not happening anytime soon.
So don’t run with the crowd on this because these emotionally-driven selloffs are handing us a rare profit opportunity….
According to The Wall Street Journal, renewable energy stocks have “surged more than 80%” in 2020.
But anyone investing in renewable energy knows it’s just getting started.
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It’s only a matter of time before renewable energy stocks really take off…
The stock market went off on a sudden tear this week and there's no signs of it slowing down soon.
The sudden change caught just about everyone by surprise too, so we wanted to show you exactly why.
You might be scratching your head a bit about what's causing that.
Even more importantly, you might want to know how long it's going to last before putting some cash back into this market.
We're going to break it all down for you so you know exactly what's going on before you dive in.
Plus, we'll show you the most profitable way to do it too...
All eyes are on "battleground states" as they race to tally up all their mail-in votes - which could take days, according to the latest reports.
Eventually, we will have an answer, but the uncertainty hasn't slowed down the stock market one bit.
The Dow has raced 5% higher this week and it could be on track to head even higher as we get more clarity on who won.
If you've been keeping your powder dry in these uncertain markets, then right now could be an excellent time to jump in.
As investors, the best action now is to focus on companies that will deliver outstanding returns no matter what the politicians do next year.
Today I'm giving you three stocks we're buying now because of their solid long-term potential, no matter what we learn about who will be in Washington for the next four years.
Before the pandemic, GameStop stock looked like it was headed for oblivion.
GameStop (NYSE: GME) sold new and used video games and consoles out of brick-and-mortar stores.
It was a great business a few years ago, but gaming has increasingly moved online.
Then the situation changed.
The company came back into favor in dramatic fashion and has seen its shares rise by 183% in the last month alone.
Investors are rightly wondering what on earth is going on here.
Is GameStop now a must-own growth stock? Or is it a clunker about to fizzle out? I’ll break down what’s going on with this stock and show you whether it’s worth stashing in your portfolio right now… .
Garmin Ltd.
(NASDAQ: GRMN) has undergone a rather large transformation.
But when you think about its primary products, you cannot help but wonder how Garmin stock is becoming valuable again.
Money Morning’s Andrew Keene takes us way back to primitive times when we were all excited to have a GPS device in our cars.
After years of unfolding large paper maps to find our way, and then never being able to re-fold them to put back away, a GPS device that plugged into your cigarette lighter was better than cavemen getting fire.
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If this year is like every other year, we will hear all sorts of guesses involving turnarounds, emerging technologies, and wild guesses about how the markets will play out in 2021.
I love turnarounds and emerging technologies as much as the next guy.
If I can find those opportunities throughout the year, I'll bring them to you right away.
However, for the core of our 2021 portfolio, we want to own the stocks with the very best fundamentals and powerful tailwinds from existing long-term demographic, economic, and social trends.
These are the stocks that should deliver substantial gains no matter what new brand of madness the world brings us in 2021.
Markets are noisy again this week.
With momentum teetering between positive and negative, many investors are looking for a place to hide.
The challenge is discovering which stocks are safe right now.
Far too many people are willing to leave the search for safe stocks up to the court of popular opinion.
Analysts are pushing investors into the big blue chips like FANMAG because they "feel" safe.
These firms produce popular products that are always in demand.
be true - I crunched some numbers and came up with a set of characteristics that define safe stocks.
Tech stocks have been the superstars of the market in 2020.
Two of the leading cloud and data management stocks appear to have incredible long-term opportunities.
Both have already had huge gains in 2020, but the outlook shows massive gains for the years ahead as well.
Today, we're looking for the better buy: Snowflake (NASDAQ: SNOW) or Fastly (NASDAQ: FAST).
You're hearing a lot about bargains lately.
Stocks are at generational lows.
But some of those bargains are not what they seem.
The S&P 500 is still down 17.5% from its all-time high.
It looks like smorgasbord of cheap stocks for the picking, and that it is.
Check out some of these blue chip stocks from the Dow Jones Industrial Average...
U.S.-China relations might be deteriorating exponentially with the coronavirus outbreak.
But that doesn't necessarily mean you have to stop making money from Chinese industry just yet.
Today, we're going to talk about how investing in China could still make sense today.
We'll even show you a potential Chinese growth stock with 717% growth potential.
