Our new list of the best stocks to buy now is heavy on tech, proving once again that the road to wealth is paved with tech. We've got five new stock picks from our investing and trading experts to get you on that road.
First, we take a look at a "pick-and-shovel" play in the booming legal marijuana industry.
Then, we'll see how marijuana legalization is making its way into the pharmaceutical industry, with potentially world-changing effects.
Next, we'll highlight a biotech firm that stands to gain in a more politically friendly environment.
Then we have a tech company that's helping chip manufacturers create the world's biggest supercomputer.
And finally, we'll look at a real estate trust that's bringing the brightest minds in science and technology together.
Here's our list of the best stocks to buy now.
Best Stocks to Buy Now No. 1: This Iconic Software Company Is Selling Picks and Shovels for Today's Gold Rush
Legal marijuana is an industry with incredible growth potential as legalization spreads across North America. And Nevada just showed us how that growth looks...
Less than two weeks after marijuana became legal for recreational use in Nevada, the state is already running out of product.
That's a problem for Nevada, which collects a 10% tax on cannabis sales. Sales of weed generated $500,000 for the state in just the first four days of legalization.
In order to keep that revenue coming in, Nevada's government has declared a state of emergency to address the roadblocks in the supply chain.
If Nevada's rollout is any indication, there are major events coming up soon for sales of legal pot. Legalization is expected in early 2018 for both Canada and California, the United States' most populous state.
A 2016 report by ArcView Market Research projects annual sales of legal marijuana in North America to grow from $6.7 billion in 2016 to $22.6 billion by 2021.
But if you want to cash in on the "Green Rush," as Money Morning Director of Technology & Venture Capital Research Michael Robinson calls it, you don't have to invest in cannabis producers themselves. You can opt for a "pick-and-shovel" play instead.
During the Gold Rush in the 1800s, some people got rich by finding gold and mining it. And some found nothing and simply ruined themselves. But a lot of others got rich by selling products like picks and shovels to miners.
If you want to take a similar approach to legal weed, look no further than software giant Microsoft Corp. (Nasdaq: MSFT).
Because pot is such a young and politically complicated industry, it's incredibly important that cannabis companies keep their affairs in good order and in compliance with regulations. Increasingly, Microsoft's Azure cloud computing service has been the tool they turn to.
The Next States to Legalize Marijuana
"Ever since June 2016," Michael writes, "Microsoft has used its ultra-powerful software and cloud services to become the go-to source for the cannabis industry."
Sales for Azure grew 93% in the last quarter. And Microsoft is in the process of shifting its core focus to cloud computing.
So along with the benefits of a stable organization with a long track record of growth, you can also get a piece of the nascent pot industry as it gets set to explode.
Best Stocks to Buy No. 2: This Pioneer in the War on Pain Is Nearing a Lucrative Milestone
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Opioid-related fatalities in the United States rose over 15% to 33,091 in 2015. Last year's numbers won't be available until December, as drug death counts take a long time to make official, but early indications suggest another dramatic increase. Current estimates on drug-related fatalities in 2016 are over 59,000.
If that holds up, it would be a 19% increase from the previous year.
The rate of drug deaths has nearly tripled since 1999. More people now die from drug overdoses than from car accidents or gun violence.
But a study using data from 1999 to 2010 concluded that opioid fatalities dropped 25% in states that approved medical marijuana.
That makes sense, if marijuana-based pain treatments are replacing opioid-based medications. Prescription drugs account for 40% of all drug overdoses, according the American Society of Addiction Medicine.
GW Pharmaceuticals Plc. (Nasdaq ADR: GWPH) is one of the major pioneers in developing marijuana-based prescription drugs. After publishing positive phase 3 data, GW is hoping for FDA approval on its epilepsy drug Epidiolex in the coming months. It would be the first approval for a drug whose active ingredient is cannabidiol, the compound thought to be responsible for marijuana's therapeutic effects. That could open the floodgates for more cannabis-based drugs, especially to treat pain.
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Sativex, GW's cannabis-based spray to treat pain in cancer patients, was approved in the UK in 2010. Unlike Epidiolex, Sativex contains THC, marijuana's psychoactive component. The drug is not yet approved for medical use in the United States, but we could see that change in the near future.
As Michael Robinson put it, "We're at the beginning of a sea change in how we treat chronic pain, shifting from opioid-based medications to cannabis-based ones. And with first-mover advantage, we're in the perfect spot to profit."
Michael originally recommended GW to Money Morning readers in March 2014. It's up 77.5% in that time, compared to 33.2% for the S&P 500.
Find out all the reasons why he still thinks it's a winner.
Best Stocks to Buy No. 3: A More Favorable Political Tide Is Music to This Biotech's Ears
Drug companies have been weary of President Trump's talk of getting drug prices down. But most reports suggest that the executive order Trump plans to issue on drug pricing will lack the teeth that had pharma investors scared a few months ago.
As Leerink analyst Geoff Porges put it in June, "The Trump threat to regulate drug prices in a harmful way is receding."
Another reason investors are breathing a sigh of relief is that the president has indicated that he wants to speed up the process for FDA approval. Trump met with pharmaceutical company heads in late January and floated the idea of a faster, easier approval process to encourage companies to manufacture in the United States. According to Drugs.com, it currently takes an average of 12 years and over $350 million to get a drug from the lab to the market.
Biotech, it seems, is looking like a good investment again.
One of Michael's favorite picks in this field is Dublin-based Jazz Pharmaceuticals Plc. (Nasdaq: JAZZ).
Jazz currently has six drugs on the market, including Xyrem, a narcolepsy drug whose sales increased 16% in 2016. Sales of Defitelio, for the treatment of hepatic VOD, also known as sinusoidal obstruction syndrome (SOS), increased 54%.
This year Jazz has announced positive phase 3 results for drugs to treat obstructive sleep apnea and excessive sleepiness associated with narcolepsy, meaning a significant boost in revenue could be on the way.
Earnings have been rising steadily, posting a healthy $2.31 EPS last quarter, and that's expected to continue. Bernstein Research expects Jazz to beat estimates when it releases its latest earnings report on July 14.
Jazz Pharmaceuticals stock is up 42% for the year. It currently trades at $155.03.
Best Stocks to Buy No. 4: The Race to Build the World's Biggest Supercomputer Goes Through This Company
In June, the U.S. Department of Energy announced $258 million in grant money to American tech companies, including computer chipmakers Advanced Micro Devices Inc. (Nasdaq: AMD), Intel Corp. (Nasdaq: INTC), and Nvidia Corp. (Nasdaq: NVDA). The aim is to develop the nation's first supercomputers that can perform a billion calculations per second.
Really, the United States wants to take the computer technology lead back from China, which currently has the two fastest computers in the world.
Will it work? From an investor's standpoint, it doesn't really matter. The race is on, and that means big gains for those savvy enough to spot the trend.
Like Microsoft in the cannabis industry, Lam Research Corp. (Nasdaq: LRCX) is a pick-and-shovel play. In fact, it's even another step removed: a company that sells necessary equipment to the pick and shovel makers. Chipmakers, whether they're in the United States or China, need fabrication equipment in order to create the circuits they sell to Apple, Microsoft, and others. Lam Research is a leading provider of that equipment, and it has a strong presence in both countries. So it stands to benefit regardless of who wins the technology race.
Since Michael Robinson picked Lam on June 29, it's already up more than 10%, compared to 1.6% for the S&P 500.
Last week Morgan Stanley raised its price target for Lam from $135 to $168 ahead of SEMICON West, an annual semiconductor technology trade show held in San Francisco from July 11-13. It currently trades at $156.90.
Best Stocks to Buy No. 5: This Company Brings Tech's Brightest Minds Together for Your Financial Gain
Real estate investment trusts, or REITs, are often seen as a higher-yield alternative to bonds - especially in the extremely low-interest-rate environment we've been in for the past several years.
So with the Fed now indicating that it will seek to ever-so-gradually increase rates, some investors are concerned that higher rates will adversely affect REITs.
That concern is not entirely off base, but there are several mitigating circumstances that suggest you shouldn't write off REITs altogether even when interest rates are rising.
In fact, REITs don't always suffer when interest rates rise. As Money Morning Chief Investment Strategist Keith Fitz-Gerald writes, "Between 1994 and 2017, for example, there were nine time periods when interest rates rose by more than 1%... Six out of nine of those times, REITs provided positive returns."
And those rate hikes were substantially higher than the incremental 0.25% increases the Fed is planning.
More than that, not all REITs are created equal. Some are more sensitive to interest rates than others. Mortgage REITs, for example, which invest in agency-issued securities and then collect the interest, will certainly get hit when rates rise.
But equity REITs, which invest in properties and then collect rent, can often do quite well when rates are rising - especially when they're rising as slowly as they are now.
One trust that's likely to hold up well is Alexandria Real Estate Equities Inc. (NYSE: ARE). ARE invests in clusters of properties for life sciences and technology firms. It specifically focuses on placing world-class organizations in close proximity to each other in order to foster an environment of cutting-edge research and capital creation.
Since 1998, ARE has outperformed the S&P 500 by 292%. And for Money Map Report subscribers who followed Keith's research, it's returned 49% since December 2014.
Here Keith explains how to pick the REITs with the best chances of long-term gains.
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About the Author
Stephen Mack has been writing about economics and finance since 2011. He contributed material for the best-selling books Aftershock and The Aftershock Investor. He lives in Baltimore, Maryland.