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There are two fundamental keys to successful investing: buying the right stocks and selling them at the right time. It sounds simple, but every investor knows both of those simple ingredients are far more difficult than they seem.
The ten best of the best stocks to buy for 2018 are all straight-A rated stocks, meaning they have the technicals and fundamentals to make 2018 a strong year for each of them.
These are focused picks, not bets on sectors. And most of them come from a variety of sectors. This gives you a spectrum of choice when choosing which ones you want to buy.
If you’re overloaded in tech, pick a construction materials firm. If you have healthcare stocks, look to a niche retailer that continues to fly under the radar. The options are yours, but the bottom line is, all these stocks will be winners this time next year.
Best Stocks to Buy: Align Technology (ALGN)
Align Technology, Inc. (NASDAQ:ALGN) has a $19 billion market cap, a P/E of 73 and is up 153% this year-to-date. And it makes braces. For your teeth.
The thing is, ALGN has shattered the conventional model for orthodontic devices. Instead of the metal braces and wires, ALGN ‘aligners’ are a hard, clear plastic that are molded to your teeth.
And depending upon how severe your corrective needs are, you can wear them in the privacy of your home, on your commute, wherever.
This aligner system also means more than just kids are going to have straight teeth now. ALGN has broken through moat that has surrounded orthodontics for decades. And now, straight teeth is a cosmetic option like plastic surgery.
With the U.S. market booming, China has just begun.
Best Stocks to Buy: Coherent, Inc. (COHR)
Coherent, Inc. (NASDAQ:COHR) is all about photonics. Lasers to be exact.
That may not seem like much of an industry, much less a big growth industry, but it is.
You see, lasers are now becoming the tools of choice when it comes to a number of sectors. Lasers are replacing surgical tools, especially in opthamalogy and other delicate surgeries. In manufacturing they’re used for scanners and testing equipment and they’re far more accurate and reliable.
And in defense and security, lasers are on the brink of replacing munitions. You can now shoot drones and missiles out of the air with drones or destroy a vehicle on the ground.
What’s more, they’re usually cheaper and more durable than the technologies they’re replacing.
COHR is a pioneer in the field. It was one of the first tech firms to headquarter in Palo Alto — the core of Silicon Valley — back in the 1960s. And it’s still going strong today.
Up 110% year-to-date, and only trades at a P/E in the upper 30s.
Best Stocks to Buy: Arista Networks (ANET)
Arista Networks Inc (NYSE:ANET) is a company I have talked a lot about in the past year. And it looks like 2017 is more the beginning of my commentary on this stock, rather than the end.
ANET is a cloud networking solutions company that is up nearly 130% this year so far, and it’s just starting its climb. If you follow tech, you know cloud computing has been a buzz word for a long time.
But now all that talk is developing into a mature market where working in the cloud is becoming more a necessity than an option. All the next generation tech is dependent upon a robust and blazing fast cloud — Big Data, smart cars/houses/machines, gaming, mobile computing, among others.
And right now, ANET is the go-to firm, like Cisco Systems, Inc. (NASDAQ:CSCO) was back in the dotcom boom.
Best Stocks to Buy: Abiomed (ABMD)
Abiomed, Inc. (NASDAQ:ABMD) has a storied past that has transitioned into a compelling future.
In 1981, ABMD was the first company to build the world’s first total replacement heart. And now it builds the world’s smallest heart pump.
Its Impella brand heart pumps are the only products ABMD makes. And given its reputation in this critical field and the advanced nature of its products, it is a well-moated company with a huge long-term growth market in the U.S., Europe and Asia.
In most of the developed world, populations are getting older, and that means a larger proportion of the population will become victims of heart disease.
What’s more, Impella’s simple insertion process is much cheaper than major surgeries, which will continue to gain appeal with healthcare insurers and hospitals.
Best Stocks to Buy: Trex Company (TREX)
Trex Company Inc (NYSE:TREX) may be well known if you’re looking to replace your home’s deck, but it’s usually not a name that comes up when talking about great growth stocks.
But given the economy, it’s where we are. In the past 6 months, TREX stock is up more than 70%.
This rise also coincides with bank’s efforts to lend money in the form of home equity loans. Homeowners haven’t been putting their houses on the market and even though economic numbers show the economy is recovering, homeowners are choosing to renovate rather than move.
And this is a perfect scenario for TREX. Durable and attractive wood-alternative decking and railing materials are gaining more popularity, especially when you look at how easy they are to maintain. This market has legs.
Best Stocks to Buy: Westlake Chemical (WLK)
Westlake Chemical Corporation (NYSE:WLK) is a global plastics maker. Everything from films for food packaging to industrial-sized PVC piping is made at one of their numerous facilities around the globe.
The biggest challenge in this industry was the global recession. When the economy isn’t growing, there is slack demand for all the various products and components WLK makes.
But this is one of those sectors that is a strong forward looking indicator of economic strength. For example, if developers are bullish they start to buy supplies for housing projects. That means growing orders for PVC pipe and other construction materials.
Plastics are so ingrained in our day to day lives, we hardly even notice how ubiquitous they are.
But when WLK stock makes a nearly 80% move in the past year, it’s time to pay attention.
Best Stocks to Buy: Paycom Software (PAYC)
Paycom Software Inc (NYSE:PAYC) is a cloud-based human capital management (HCM) firm.
Basically PAYC is the next generation human resources firm with powerful analytical tools that can evaluate employees from the want ad they responded to, to the exit interview when they moved on.
It can then take all the data accumulated between those two points and evaluate how good an employee they were, how best to attract more employees like that, how to create an environment that promotes productivity and rewards effort. HCM helps build salary ranges, as well as benefit packages.
And, it’s a contract service, so it doesn’t mean hiring a bunch of people to do it.
Up 74% YTD, this new kind of management tools is just getting traction.
Best Stocks to Buy: Pilgrim’s Pride Corporation (PPC)
Pilgrim’s Pride Corporation (NASDAQ:PPC) is one of the largest chicken companies in the US. And it also has significant distribution in Mexico as well.
While a chicken company may not be the first be the first investment to come to mind for most growth investors, PPC has had a stupendous year so far. It’s up 96% and trades at a current P/E of just 14.
Demand for leaner meat is growing and formerly scrap parts like wings, have taken off globally. That growing demand has helped increase margins and broaden distribution.
Granted, this is a more long-term winner than some of the tech or healthcare choices, but it is a key industry player that knows how to make money in its given sector. That may not be sexy, but given its returns, it doesn’t have to be.
Best Stocks to Buy: Five Below (FIVE)
Five Below Inc (NASDAQ:FIVE) is a specialty retailer that focuses on merchandise for teen and pre-teen consumers. Basically everything in the store is $5 or less.
Because it has developed a specific niche in the dollar store sector, it has been able differentiate itself and succeed.
Also, because it caters to youth, it becomes a great place to pick up gifts and goodies for birthdays or, during this time of year, stocking stuffers. As with many discount retailers, FIVE had strong Q3 numbers that bode well for Q4 and beyond.
Another reason FIVE has longer-term potential is the fact that while employment numbers are strong, wages are still stagnant. That means lots of consumers are still keenly interested in stretching the value of their money.
Up nearly 70% YTD, it’s not too late to grab some upside here.
Best Stocks to Buy: Nvidia (NVDA)
Nvidia Corporation (NASDAQ:NVDA) is one of the biggest beneficiaries of the next leg in the Digital Age.
The stock is up 100% in the past year and more than 1,500% in the past 5 years. And every year there are people who say that the growth for NVDA is overrated and it can’t continue to grow at the pace it’s growing.
The fact is, NVDA has heard stories of its demise, even when it was producing high-end graphics processing units (GPUs), usually for hardcore gamers and scientists.
But all that has changed now. And with the advent of cloud computing, the huge demand for mobile computing, the growth of the Internet of Things (IoT) and new virtual and augmented reality technologies, NVDA is at the center of it all.
Even after all this massive growth, it still only sports a P/E of 48.
Louis Navellier is a renowned growth investor. He is the editor of five investing newsletters: Blue Chip Growth, Emerging Growth, Ultimate Growth, Family Trust and Platinum Growth. His most popular service, Blue Chip Growth, has a track record of beating the market 3:1 over the last 14 years. He uses a combination of quantitative and fundamental analysis to identify market-beating stocks. Mr. Navellier has made his proven formula accessible to investors via his free, online stock rating tool, PortfolioGrader.com. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.