“Best stocks to invest in 2017”. Now, before we make our recommendations, you must have known that there would be a disclaimer first. Well, here it is! While we recommend stocks using financial diligence, there is no way we can fully fathom several different factors that come into play in the equity markets.
The state of a larger global economy, possibility of war or political unrest, competition, market fads, social trends and corporate management quality are just few of many critical factors that can derail or bolster a company’s prospects in the future.
So, while the following recommendations as best stocks to invest in 2017 are of companies with great prospects as of the moment, things can change and change quite drastically in the future.
Also, please understand that these stock recommendations are made with a long investment timeline in mind. Think 5-15 years. If you need stock ideas to invest so you can cash out in a few days, months or just 2-3 years, you are better off following trading sites or not investing at all. Investments with short timelines are tricky. Read our post on where to invest for the short term.
Best stocks for 2017 (with a 5-15 year investment timeline)
Netflix has been a phenomenal story. Since its introduction to the markets,the stock has shot up an astonishing 10,131%. What is even more impressive is that the potential for growth is still quite staggering.
With about 126 Million viewers in the U.S., growth has slowed a bit. Though disappointing, it is understandable, considering that market penetration has been sensational. Despite its very aggressive domestic penetration in the U.S., the company confidently expects to have about 145 million viewers by 2019, showing that growth is still quite strong. Please note that viewers are not the same as paying subscribers. Since Netflix allows multiple users per account, there’s an average of about 2.5 viewers per paying account.
The company has also issued a statement saying that the subdued 2016 financials were inevitable, caused by the difficult decision to increase subscription prices. But, the company said that it was a hit it was quite willing to take, as the price hike just had to be done. Management expects growth to continue on an uptrend, once the first time price hike disappointment settles down, with time.
The company’s real honey pot lies overseas. With services launched in as many as 130 countries, the market penetration potential is enormous. Netflix has very little market share in overseas markets but it steadily making inroads. Though overseas growth is hampered by market barriers and the currently high to very-high cost of generating content, it is expected to become more cost friendly as Netflix finds best practices to implement across the board, internationally.
And all is not subdued in terms of growth prospects in the U.S. In the U.S., Netflix stands to gain from its significant partnership with Walt Disney, a partnership that will allow it to reap profits from the box office, a mercurial niche with potential for great windfalls.
The company predicts that its net viewer base can easily go into the billions, if it can get the traction it wants in overseas markets.
While Netflix is a good pick, you must keep a very wary eye on Amazon Prime Video. Amazon is a giant innovator and has already made fantastic strides with Prime Video, offering a service that is cheaper than Netflix, though not as up to date as Netflix.
Tesla is a phenomenal company. Staggering battery powered performance aside, the company has posted solid sales figures. The Tesla S, competing against Audi, BMW, Lexus and other biggies has blown the competition out of the water, so much so that two Tesla Model S cars have been sold for every one BMW 7 series. That is impressive, considering how revered the BMW 7 is, as an envious car to own.
Tesla is banking on self-driving cars becoming legal and a staple in the future. If that assumption plays out, Tesla is going to have a giant head-start in the game, since all its existing cars can pretty much easily receive a “self-driving update”.
Tesla also has blueprints and plans ready to enter the lower priced markets car markets as well. With the power of a green initiative combined with performance that actually surpasses similarly priced gasoline cars, Tesla can emerge as a super car manufacturer, taking the stock price along for a sensational ride.
Amazon is easily one of the biggest players in E-Commerce. But, even with its mammoth presence in the e-commerce space, Amazon’s real market share of all e-commerce in the world stands at just 3%. This means potential, massive potential for growth.
This growth aside, many financial analysts are licking their lips at the growth potential from Amazon’s Web Services businesses, an extremely profitable business venture that targets cloud computing.
With cloud computing ticketed as the next big item on e-revolution agenda, Amazon has already made a name for itself, prepping itself to become to go-to providers of various services, at extremely healthy margins.
Amazon’s drone deliveries are poised to take Amazon’s e-commerce business to the next level. More market share in a growing e-commerce space, at hopefully higher and more stabilized margins will mean that Amazon can post very smart gains on two fronts.
Just the fact that this stock is on Warren Buffet’s portfolio makes it a good pick for 2017, if you are a Buffett fan that is. Buffett holds (at the time of writing this post) about 325 Million shares in Kraft Heinz! It is worth about $30 staggering Billions.
The fact is that Buffett actually initiated the massive deal between Heinz and Kraft. Not surprisingly, the now massive company underwent fiscal discipline changes after Buffet’s deal making. Thousands of workers were let go. While that might sound bad right off the bat, it isn’t always bad when Buffett is behind such moves.
With a lighter operational footprint, one of the world’s largest companies has a better chance of making profits, and making those profits at better margins. The food industry is an “essential” industry, meaning that it is least susceptible to market downturns and recessive economic cycles, where discretionary spending can otherwise very quickly pull down a company’s growth prospects.
If you don’t like the above picks, you can maybe try picking out a stock yourself. Using fundamental analysis, you can pick great stocks yourself. Read this post on investing in stocks for beginners, to know how you can get started.