Investors saw the return of volatility in late 2018. Tariffs, rising interest rates and China took center stage. The best stocks to buy for 2019 will need to be strong companies. They must have solid underlying fundamentals, poised to grow regardless of what the future brings. 7 of the best stocks to buy for 2019 look like attractive opportunities for the long-term investor. Here’s a rundown of the top selections for the coming year, and what makes each of them special.
1. Starbucks Corporation (ticker: SBUX)
Starbucks now has its biggest growth opportunity in the China/Asia Pacific region. It opened 278 new stores between July and September alone. Hedge fund titan, Bill Ackman, certainly believes SBUX is one of the best stocks to buy for 2019. He bet over $900 million on shares mere months ago. Even after a 10 percent rally on impressive results, shares trade for 20 times earnings. China sales grew 41 percent last quarter. Even if overall growth is modest, Starbucks is a great company at a fair price.
2. NXP Semiconductors (NXPI)
For years, NXPI was more or less dead money. But not anymore. After the Chinese government failed to approve Qualcomm’s purchase of the large-cap chipmaker, known for its leadership in the automotive and internet of things markets, shareholders got clobbered. NXPI stock plunged from $125 to lows around $69 in late October. So what makes NXP Semiconductors one of the best stocks to buy for 2019? Well, it appears to have found its bottom, with shares surging after better-than-expected third-quarter earnings. NXPI trades for 10 times forward earnings. It is aggressively buying back stock with the $2 billion breakup penalty QCOM paid.
3. Facebook (FB)
Bold long-term investors should consider Facebook’s 2018 data/PR crisis a great entry opportunity. This is the time to buy. After all, the time is right when there’s the proverbial blood in the streets. With 2.2 billion monthly active users, FB’s network is impossible for competitors to replicate without Facebook seeing the threat a mile away. Facebook plans to enter online dating. They want the potential to charge for Facebook Marketplace transactions. These are just two of many potential bullish catalysts that underline why FB is one of the best stocks to buy for 2019.
4. Stitch Fix (SFIX)
This innovative young company is a brilliant hybrid of megatrends in e-commerce, bespoke services, subscriptions, big data and the stay-at-home economy. An online service for those too busy or apathetic to routinely shop for clothes, Stitch Fix offers personal, virtual stylists to send you regular clothing installments based on your preferences. Whatever you don’t want you send back. Be forewarned that SFIX shares have been volatile since its 2017 IPO, but analysts foresee 20 percent growth for the next few years, and its September expansion into big-and-tall clothing boosts its potential. Like Netflix, Stitch Fix harnesses user data to roll out new products under its own brand.
5. Johnson & Johnson (JNJ)
Johnson & Johnson is one of the best blue-chip stocks of the last century. It really seems built to last through whatever economic situation you can throw at it. Three multibillion-dollar divisions – pharmaceuticals, consumer goods and medical devices – give JNJ broad diversification and, combined, make the stock an absolute cash cow. A major reason JNJ remains one of the best stocks to buy for 2019 (and beyond) is its ability to weather the business cycle. Consumers don’t stop skinning their knees (Band-Aid), getting headaches (Tylenol), upsetting their stomachs (Imodium) or wanting to look their best (Neutrogena) when the economy slumps, and patents protect much of its roughly $40 billion pharma business.
6. Apple (AAPL)
Apple remains one of the best stocks to buy for 2019 and beyond, even after September earnings sent shares plunging. Apple’s earnings themselves weren’t bad at all in fact, beating both top-line and bottom-line expectations. Still, a jittery market reading too much into guidance and flattening iPhone sales ultimately overreacted. AAPL may not be the growth dynamo it once was, but its ability to push higher prices on consumers shows no sign of slowing down. At just 17 times earnings, with a modest dividend, growing services revenue (from App Store, iTunes, iCloud, etc.) helping boost margins and Buffett as a shareholder, AAPL is about as safe as stocks get.
7. Sprouts Farmers Market (SFM)
Sprouts Farmers Markets is a lovely combination of value, growth, and predictability. It is a grocery chain focused on healthy, fresh and organic food. This $3.5 billion company is on the right side of a secular trend toward more conscious consumption, with 315 stores (and growing) in 19 states through late 2018. In an industry of typically unimpressive growth, SFM practically doubled revenues from $2.44 billion to $4.67 billion between 2013 and 2017. Private label sales, a great source of margin expansion for grocers, grew from 7 percent to 13 percent of total sales between 2013 and 2018.