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Our new list of the best stocks to buy now aren’t all tech companies, strictly speaking. But they’re all leveraging technology to position themselves for long-term growth, proving once again that the road to wealth is paved with tech.
First, the Facebook of China is riding a hot streak and is set to keep “soaring,” as its name suggests.
Then, a coffee company’s digital payment system makes it the envy of the tech world.
Next, one of tech’s biggest conglomerates takes a page out of Warren Buffett’s playbook.
Then, the world’s smallest heart pump helps combat the world’s leading cause of death.
And finally, a top biometrics company is flying under Wall Street’s radar.
Best Stocks to Buy Now, No. 1: This Chinese Tech Giant Makes Information (and Your Portfolio) Soar
China’s biggest Internet stocks are on fire in 2017. And a quick look at the numbers shows why.
A report released this week showed that China’s Internet user base grew to 751.16 million in June, up 6% from a year earlier. That’s still just 54.3% of the world’s most populous country, compared to 74.6% in the United States, which means there’s still plenty of untapped upside.
One of the biggest beneficiaries of that growth is Tencent Holdings Ltd. (OTCMKTS: TCEHY), often called the “Facebook of China.” Its English name comes from the Chinese characters tengand xun, meaning “soaring information.” And the stock is indeed soaring, up nearly 75% in 2017. It just became the second Chinese company to pass $400 billion in market cap, after Alibaba Group Holding Ltd. (NYSE: BABA) did it in July.
Tencent’s social media platform WeChat, launched in 2011, dominates the Asian market, with 963 million monthly active users. In addition to social media, WeChat also provides personal messaging, shopping, and payment services, among others, prompting some to call it China’s “app for everything.”
But so far, it’s gaming that’s Tencent’s real bread and butter. It is the world’s largest gaming company by revenue. Its mobile game “Honor of Kings” has more than 50 million daily active users, and in the first quarter of 2017, it was the most downloaded app in the world on Apple Inc.’s (Nasdaq: AAPL) iOS App Store.
The game is, in fact, too popular. Tencent was pressured by parents and teachers to put limits on game use for children over concerns that “Honor of Kings” was addictive. To Tencent’s credit, it has restricted daily use for players who are 18 and under – with stricter limits for those under 12 – and implemented a system to identify and potentially ban players who show signs of addiction.
From a business standpoint, it’s not a bad problem to have. “When you have something with that kind of appeal,” Money Morning Technical Trading Specialist D.R. Barton, Jr., says, “you have a huge winner.”
D.R. told CNBC World in August that Tencent’s growth potential is “double” that of the big U.S. social media companies like Facebook Inc. (Nasdaq: FB).
Particularly if you’re able to pick this one up on a dip, D.R. says, you’ll be “very happy looking back a few years from now.”
Best Stocks to Buy Now, No. 2: Wake Up! This Coffee Company Just Became a Must-Have for Your Portfolio
Branded digital payment systems have been a difficult sell for most companies. eBay Inc. (Nasdaq: EBAY) tried a location-based payment system for mobile phones in 2011, but it never caught on with customers. Apple and Alphabet Inc. (Nasdaq: GOOGL) both have their own payment systems, but about 95% of customers still opt to use cash or credit cards instead.
But one retailer has made it work.
Last quarter, 30% of this company’s orders were paid for via its mobile phone app. Those mobile users become part of a system that enables efficient target marketing and inspires loyalty thanks to rewards based on points that customers collect – or not points, but “stars.”
The company is Starbucks Corp. (Nasdaq: SBUX). This coffee maker was always nice to have in your portfolio – the stock has more than doubled in the last five years, after all. But according to our very own Keith Fitz-Gerald, the effectiveness of its payment system turns it from a “nice-to-have” into a “must-have.”
The 18% of customers who are enrolled in “My Starbucks Rewards” accounted for 36% of sales last quarter. That confirms Keith’s assessment that a program like this “leashes or tethers the customer to the brand” so they keep coming back.
In a year that has been marked by the decline of the brick-and-mortar retail industry, Starbucks has figured out how to grow in the Information Age. Its continued growth in earnings proves that: Earnings per share (EPS) last quarter were 12% higher than the year before and 30% higher from two years ago.
“Starbucks’ move,” Keith says, “is a perfect example of innovation from a company that has two choices – get on board or get left behind.”
Investors face the same choice.
Best Stocks to Buy Now, No. 3: The Berkshire Hathaway of Silicon Valley Could Hand You Life-Changing Profits
You know our next stock pick as a next-generation tech giant. But you probably don’t consider how much of its wealth comes from an old-fashioned source: land.
Silicon Valley is home to some of the most valuable real estate in the world. And this pick, with its 72,000 employees, is one of the area’s largest landlords.
We’re talking about Alphabet Inc. (Nasdaq: GOOGL). Silicon Valley Business Journalreported in July that Alphabet had purchased 52 properties in Sunnyvale, about four miles from company headquarters in Mountain View, for a stunning $820 million. A month earlier, the company won exclusive rights to negotiate for 16 tracts of land in downtown San Jose, which would provide between 6- and 8-million square feet of office space.
Alphabet is not so much an Internet company as a holding company with its feet in a variety of industries – think Silicon Valley’s version of Berkshire Hathaway.
In fact, when the company restructured itself and changed its name from Google to Alphabet in 2015, Chair Eric Schmidt says it was in large part to emulate Berkshire CEO Warren Buffett’s management model. Schmidt and Google co-founders Sergey Brin and Larry Page were impressed to learn that, in spite of the scale and success of Berkshire Hathaway, its executive offices took up just one floor of an office building.
Under its new structure, Alphabet goes even further than that. Its executive offices take up only half a floor.
That’s pretty lean for the second-largest company in the world. But it gives Alphabet the agility to move quickly into new ventures and fund groundbreaking innovations for decades to come. The list of its business interests ranges from artificial intelligence, to driverless cars, to biotechnology, to space transportation – and it goes on.
And that’s on top of its massive real estate wealth.
Michael Robinson points out that if Alphabet stock grew to just 5% of Berkshire Hathaway’s share price, that would translate to a 1,294% gain from today. And given Alphabet’s current trajectory, he thinks that’s a conservative projection.
“Simply put,” Michael says, “Alphabet is laying the foundation now for what will become the ultimate high-tech conglomerate.”
Best Stocks to Buy Now, No. 4: This Tiny Heart Pump Could Mean Big Returns for Investors
Coronary artery disease affects more than 100 million people each year around the globe and is the No. 1 cause of death. Heart disease and heart failure together account for one out of every three deaths in the United States.
But many high-risk patients don’t qualify for transplants or surgical coronary bypass treatments due to the risks involved. In those cases, a minimally invasive intervention procedure may be the only available option.
And thanks to the world’s smallest heart pump, those procedures can now be performed with considerably less risk to the patient.
The company behind the device is Massachusetts-based Abiomed Inc. (Nasdaq: ABMD), and to date its Impella pump has helped more patients than could fill Fenway Park.
It’s not only angioplasty that the pump can assist with, either. When Jara Herron of Tulsa suffered a spontaneous coronary artery dissection (followed by cardiac arrest, kidney failure, respiratory distress, and gastrointestinal bleeding), she was lucky that the hospital she went to had purchased an Impella two weeks earlier. It kept her blood pumping for several days while doctors stabilized her.
Her heart had stopped beating for an hour. But less than five months later, she was back at work part-time.
According to Cardiovascular Business, heart failure in the United States – already at epidemic levels – is expected to rise 46% by 2030. That would mean 8 million new diagnoses every year. So Abiomed’s device, currently only used in 1% of percutaneous coronary intervention procedures, fills a desperate need in the healthcare industry.
According to Michael Robinson, “over the past three years, Abiomed has grown sales an average of 38%. If that rate holds, sales will double again in less than two years. Even better, earnings per share are growing nearly twice as fast.”
“This is the kind of stock,” he adds, “that really puts you in the fast lane of high tech’s road to wealth.”
Best Stocks to Buy Now, No. 5: Grab Silicon Valley’s Go-To Biometrics Developer Before Wall Street Catches On
Biometrics is no longer the stuff of high-tech spy movies. Today we have smartphones that can recognize our fingerprints, our faces, and even our patterns of speech in order to provide security, analytics, and a better user experience.
Investors know this and scramble for shares of Apple or Alphabet when a device comes out with the latest biometric technology. But what they’re not looking for are the companies who are developing the technology for the next generation of devices.
That’s why one of our favorites is available at a discount – for now.
That’s Synaptics Inc. (Nasdaq: SYNA), the company that Alphabet, Intel, Microsoft, and Qualcomm all turn to in order to enhance their tech products.
“And they’re all willing to pay big dollars” for it, Michael Robinson says.
Synaptics pioneered the touchpad for Apple’s PowerBook 500 laptops in the 1990s. It was also a major player in developing capacitive touch screens for smartphones, which respond to the electrical fields in your skin rather than requiring a stylus.
Biometrics is already a $10 billion industry. But Grand View Research projects that to grow to $60 billion by 2025. Market intelligence firm Tractica puts it at $68 billion by 2024.
Shorter term, Digitimes Research reported in August that it expects a 191% increase in TDDI (touch and display driver integration) chip shipments worldwide in the second half of 2017. A good chunk of that business will go to Asian manufacturers, but Michael expects Synaptics to get 60% of that market.
SYNA has suffered recently due to “mild” guidance and the June rollout of new fingerprint technology from a rival company. But that only means it’s a perfect buying opportunity.
“By the end of this year,” Michael said in August, “you could have up to three new iPhone launches, new Samsung models, and of course, new Google Pixels. Going into the year-end holidays, the personal assistants and household concierges from Amazon, Google, and Apple will be huge.”
He continues: “Take advantage of that at $40 or lower, and watch as these shares rocket toward $80.”
But hurry up, because SYNA has already creeped back above $40 since then.