Our latest roundup of the best stocks to buy now includes a diversified range of picks that cover four of the most profitable trends on earth.
You can expect each of these five stocks to deliver strong gains for years to come.
Here's a preview of what you'll find below:
- The Internet has become an absolute necessity for enterprises large and small, which is why our first pick is still adding to its 150 million users.
- Solar energy is now cheap enough that it's becoming the go-to choice for new energy capacity, and we've got the best solar company to capitalize on the trend.
- Just about every car company on earth is moving from gas to electric, but your best play on electric vehicles is a company you might have never heard of.
- Corporate spin-offs now represent $1.6 trillion in annual value, and we've got a way to play it for just over $50.
- If last year's sell-off has you wary of putting your money in the stock market, we've got a rock-solid pick to anchor your portfolio and hold up in good times and bad.
And now, our latest list of the best stocks to buy now...
Best Stocks to Buy Now, No. 5: After 30 Years, the Internet Still Offers Huge Profit Potential for This Web Company
With more than half the world's population now online, according to Statista, it's hard to believe the World Wide Web is only 30 years old as of March.
Web presence is indispensable for any business of any size. And thanks to our next pick, small businesses don't have to shell out top dollar to get a beautiful, functional website.
Wix.com Ltd. (NASDAQ: WIX) was founded in 2006 to make the website-building process easier. Wix's cloud-based service comes with a wide variety of customizable templates with drag-and-drop functionality. So smaller organizations can learn the ropes on their own and set up and maintain their site with a minimal investment of time.
The real reason Wix is such a great investment is its e-commerce functionality. According to Statista, e-commerce sales in the United States will reach $735.4 billion by 2023, up 64% from $446.8 billion in 2017.
Wix gives sellers access to this booming market for $25 a month, or $195 for the year.
Wix's low-cost, high-quality model has earned it a huge - and growing - following. In 2019, just 13 years into its existence, Wix passed the 150 million-user mark. And that user base is growing at a 19% annual pace.
Users who pay for premium services now total 4 million and are growing 26% faster than those using the basic service.
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Wix's services are only going to become more essential in the coming years. Cybersecurity Ventures projects that Internet users will grow to 6 billion by 2022, a nearly 50% jump from 2018.
And the Web isn't getting simpler, either. Individuals and organizations of all types are going to need dynamic, multifunctional websites that can be easily viewed not only on desktop and laptop computers but on tablets and smartphones.
For those hundreds of millions of potential clients, Wix is going to be the obvious choice.
Money Morning Defense and Tech Specialist Michael Robinson says that makes Wix "one of those stocks that can turbocharge your portfolio for years to come."
Best Stocks to Buy Now, No. 4: As Solar Energy Hits Critical Mass, This Company Enjoys 40% Revenue Growth
Trade wars aside, the rise in renewable energy is unstoppable. That's not just because customers want cleaner sources of energy, although that's true.
It's also because renewable sources are increasingly the more cost-effective option.
According to a 2018 report by the International Renewable Energy Agency (IRENA), renewable energy sources will be consistently cheaper than fossil fuels by next year.
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Solar energy in particular has dropped in price by an average of 73% since 2010.
But to whatever extent the makers of photovoltaic (PV) panels are feeling the pinch of lower per-unit prices, our next pick sidesteps that by concentrating on the products that convert PV-generated electricity into an efficient, usable form for homes and businesses.
As a result, SolarEdge Technologies Inc. (NASDAQ: SEDG) reported a 39% year-over-year revenue increase in its most recent quarter. And that's not an anomaly: Revenue has grown tenfold in just the last five years.
SolarEdge's innovative and indispensable products include...
- Power optimizers, which constantly track and adjust the settings of every individual cell in a solar array in order to keep it running at maximum efficiency.
- Inverters, which convert the DC power that solar panels pump out into AC power that's usable in the electricity grid for homes and businesses.
- Cloud-based monitoring systems that can be accessed from a smartphone or tablet to keep track of a solar power system and make sure everything is working as it should be.
Research firm IHS Markit ranked SolarEdge No. 1 in the world in terms of single-phase PV inverters shipped. In total, its products have been installed in over 750,000 monitored solar power systems in 133 different countries around the world.
Money Morning Resource Specialist Peter Krauth lists SolarEdge as one of his favorite renewable energy stocks for its cutting-edge technology but also for its top score from our Money Morning Stock VQScore™ system.
On top of that, both its price-to-sales ratio and forward price/earnings-to-growth ratio come in at just half the industry average. The market has let this one slip through the cracks, which is to your gain if you pick it up now.
Best Stocks to Buy, No. 3: This Electric Car Company You've Never Heard of Is the Industry's Top Play
The world's biggest automaker, Volkswagen AG (OTCMKTS: VWAGY), made a lot of noise last month when it announced its plans to produce 22 million electric vehicles over the next 10 years - up from its previous goal of 15 million.
That accelerated output is sure to set the tone for the $1.7 trillion global auto sector. And it comes after Allied Market Research's forecast that electric vehicle sales will increase to $567 billion in 2025, a 380.5% gain from the 2017 figure.
But Volkswagen is not our top stock pick to capitalize on EV technology. In fact, you might have never heard of this industry leader.
That would be Magna International Inc. (NYSE: MGA), which doesn't produce cars under its own brand. But its 300-plus manufacturing sites deliver the industry's most in-demand electric powertrains.
In some cases, like the Z4 from BMW (OTCMKTS: BMWYY), Magna is even contracted to build the entire car.
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Other clients include Mercedes-Benz, Jaguar, and AB Volvo (OTCMKTS: VLVLY), which has committed to making its entire product line electric. Magna also struck a deal with Chinese state-owned auto giant BAIC last year, which could lead to a slew of new electric vehicles in the world's largest country very soon.
It's not only electric cars that Magna builds, though. The company is also at the forefront of advanced driver-assistance systems (ADS). And it's part of a joint enterprise with some of the top automobile and technology companies in the world to develop a self-driving platform to launch in 2021.
Magna is also the company that ride-hailing firm Lyft Inc. (NASDAQ: LYFT) has turned to in order to create a turnkey self-driving system. When it launches, this system will be able to be added to any existing car, thus potentially automating Lyft's entire ride-hailing fleet.
The auto industry in general is subject to ups and downs, but Magna gives you access to some of the strongest long-term trends in the stock market today. Michael Robinson calls this a great stock that "you can buy on the dips as it moves your portfolio into high gear."
Best Stocks to Buy, No. 2: How to Play the $1.6 Trillion Spin-Off Market Without Investing a Fortune
Mergers and acquisitions get a lot of attention from Wall Street. But savvy investors would do well to take note of the opposite phenomenon: spin-offs.
That's when a division of a larger company is separated into its own independent firm. Usually it means that the new, spun-off company will be able to boost its value from more focused management. As Michael Robinson puts it, spinoffs "unlock a lot of hidden value - and give shrewd investors market-beating gains."
In fact, according to Dealogic, spinoff activity accounts for as much as $1.6 trillion per year. And a study from Penn State University showed that in the last three decades, spinoff stocks returned an average of 76% in the first three years - 145% better than the S&P 500.
For a typical investor, though, buying up spin-off stocks when they become available is both tedious and expensive. That's where the Guggenheim S&P Spin-Off ETF (NYSEARCA: CSD) comes in.
CSD holds over 45 stocks across a range of industries, all of which have been spun off in the last four years. Some of the highlights include...
- PayPal Holdings Inc. (NASDAQ: PYPL) is nearing the four-year mark since its spin-off from eBay Inc. (NASDAQ: EBAY), but what a successful run it's been. Over last two years, Paypal has delivered 125% gains, compared to 22% for the S&P 500 and 9% for its former parent company.
- Ingevity Corp. (NYSE: NGVT) is a specialty chemicals business that spun off from WestRock Co. (NYSE: WRK). Over the last two years, NGVT has returned 80% while the parent company lost 33%.
- Lamb Weston Holdings Inc. (NYSE: LW) specializes in potato products and was spun off from packaged foods giant Conagra Brands Inc. (NYSE: CAG). Since then, Lamb Weston has outperformed its former owner with 67% gains, compared to 21% losses.
Overall, the Guggenheim Spin-Off ETF has gained 9% over the last 12 months while the S&P 500 has lost 2.5%.
Clearly there's plenty of money to be made as successful divisions take over their own operations, giving them the freedom to take risks and maximize profits.
Michael Robinson says corporate boards have taken notice of this success and are on the lookout for strong candidates to spin off in the next several years. That means we can expect plenty of opportunities for this ETF and more strong performance ahead.
Best Stocks to Buy, No. 1: If You Only Buy One Pick on This List, Make It This One
One thing we learned over the last year or so is that we're never "in the clear." There's always a risk of a sudden downturn, and that may leave some investors wary of taking a risk by leaving their money in stocks.
That's why a diversified mutual fund with an impeccable track record is a great foundational holding to let you rest easy at night.
The Vanguard Wellington Fund Investor Shares (MUTF: VWELX) has been around since 1929, meaning it has weathered the worst storms our economy could throw at it and is still holding strong.
At the moment, the fund is made up of about 32.5% bonds and 66.3% stocks across a broad range of industries, with the rest going to short-term reserves.
You're not sacrificing growth for stability with VWELX, either. Over the last two years, the fund has gained 22%.
This is a pick that would fit well into Money Morning Chief Investment Strategist Keith Fitz-Gerald's 50-40-10 model to balance your portfolio. That's 50% of your portfolio in foundational positions, 40% in solid growth stocks, and 10% in more speculative plays.
The Wellington Fund fits into the 50%. And once you have that stability in your portfolio, you can feel more comfortable taking advantage the advice you read on Money Morning and adding some more exciting investments to the mix.
There are some restrictions to buying VWELX, but they are minor. The minimum investment is $3,000. And while you may have heard that it's not open to new investors, that's not quite true. All you need is to either 1) invest through a broker who has had a relationship with Vanguard since 2013 or earlier, or 2) set up an account directly with Vanguard yourself.
When the next wave of instability comes, the Vanguard Wellington fund should let you rest easy knowing that it has made it through all the other storms that came before it, and it will make it through this one too.
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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.