Stocks To Watch For In 2016
Stocks To Watch – GoPro (GPRO)
GoPro has had a very tough 2015. The GoPro Session has not lived up to the company expectations with the camera priced too high at $399. Now the camera sells at half that value at $199 in order to boost sales for the holiday season. In addition, GoPro’s content value is not as valuable as initially thought. The company will be spending more money on advertising and branding any new GoPros that are coming out. Investors are concerned with the lack of innovation with the company announcing a stock buyback in the latest quarter. The company however does have potential in the drone market which is expanding rapidly across a wide array of industries outside of just filmmaking. GoPro has potential to be a winner for next year however we need to see more from management on stepping up their investments or through acquisitions. The stock currently trades at 15x P/E and for a company with a strong social media presence, this is the #1 stock to watch for going into 2016.
Stocks To Watch – Chipotle (CMG)
Chipotle ends 2015 on a bad note with cases of E. Coli across multiple locations. This clearly will hurt sales going into the new year however it is also a great opportunity for investors looking for growth to get in. This stock is still one of the best in the fast food industry posting strong EPS and revenue. We believe that the Chipotle will be able to get past this situation and consumers will be back at Chipotle soon.
Seth Klarman: Investors Can No Longer Rely On Mean Reversion
"For most of the last century," Seth Klarman noted in his second-quarter letter to Baupost's investors, "a reasonable approach to assessing a company's future prospects was to expect mean reversion." He went on to explain that fluctuations in business performance were largely cyclical, and investors could profit from this buying low and selling high. Also Read More
Stocks To Watch – Nordstrom (JWN)
Nordstrom is a very cheap retailor selling at 15x PE. The company had a horrible Q3 which made the company tank 20%. However, relative to JcPenney and Macy’s, the company definitely has potential. The company should expect to post robust sales for the holiday season. With a discounted stock price, we recommend looking to pick up some of Nordstrom along with those nice jeans and shirts.
Stocks To Watch – salesforce.com (CRM)
A growth stock that continues to be cash cow. Those who have used any of Salesforce.com’s services understand the value of it. The company is up 40% for the year and 2016 should continue that trend. Invest in this name and leave it, Salesforce has taken up a huge portion of the customer relations management crucial for small businesses.
Stocks To Watch – Time Warner (TWX)
Time Warner is adjusting to the changes in American TV. HBO has had some phenomenal hits such as Game of Thrones and Last Week Tonight with John Oliver, . If you think Netflix (NFLX) is getting too pricy, this is the alternative stock to invest in. The company trades at 15x PE and right now you can pick up this company at its low trough.
Stocks To Watch – American Express (AXP)
American Express is having a tough time competing with Visa (V) and Mastercard (MA). The stock is nonetheless is valued much less than Visa, trading at 12.5x PE and pays out a 1.5% yield. This is another stock to keep on investors’ radar.
Stocks To Watch – Celgene (CELG)
2015 was a boring year for Celgene stock. Nonetheless, the company posted very strong earnings. The product line is strong in many areas such as Multiple Myeloma and Myelodysplastic syndrome. The company is innovative and while it trades relatively high, we see the company continuing the make significant progress in cancer and inflammatory research.
Stocks To Watch – GAP (GAP)
Another retail or that has been clobbered this year with the stock down 38%. Consumer discretionary has not been the strongest however with a company that is priced this low, its hard not to pass up on the 3.5% yield.
Stocks To Watch – Kroger (KR)
Grocery chains usually do not have much appeal. The market is highly competitive. However, Kroger has definitely stood out. The company has made many renovations to its locations and revenue is steadily increasing. While profit may not be the best, the company the balance sheet is healthier than ever. Keep this company on watch and pay attention the next time you do your groceries.
Stocks To Watch – Ford (F)
Automobile sales are doing relatively well. Ford is always a stock that investors want to keep an eye out for. The company should look to benefit from consumer trends and the company is very modestly priced. This company pays a great dividend and is a great candidate for investors who are looking at a stable and dividend paying stock.