From record highs to the largest single-day loss in the Dow's history, 2018 brought investors a little bit of everything.
That kind of uncertainty might scare some investors away from stocks. It's an understandable sentiment...
But sitting on the sidelines won't make you any money.
For those ready to dive into the stock market and boost their profits in 2019, we're bringing you the best stocks to buy in 2019. These are stocks of well-run, profitable companies in must-have industries. That means these stocks have reliable growth potential no matter what the rest of the market is doing.
Here's our list of the seven best stocks to buy in 2019, along with our favorite "wild card" stock...
Another year, another huge "Singles' Day" for Alibaba Group Holding Co. Ltd. (NYSE: BABA). That's why it comes in at No. 7 on our list of the best stocks to buy in 2019.
Over the last decade, China's biggest online retailer has turned the anti-Valentine's Day tradition into the biggest shopping day of the year across the globe. This past November, Alibaba's $30.8 billion in sales for the day beat the previous year's number by 22%. And it absolutely dwarfed the $7.9 billion in Cyber Monday online sales for all U.S. retailers combined.
The days of living in the shadow of Amazon.com Inc. (NASDAQ: AMZN) are gone for Alibaba. With a market cap over $400 billion, it is one of a handful of global tech heavyweights.
And according to Money Morning Executive Editor Bill Patalon, Alibaba is a "single-stock wealth machine" - one you can buy and plan on holding for decades to come.
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There was plenty of nail-biting on Wall Street when it was announced in 2018 that Alibaba's visionary founder Jack Ma would be leaving the board in 2020. But in fact, the care with which Ma's succession has been handled only demonstrates what an exceptionally well-run company Alibaba is.
CEO Daniel Zhang, who will take over as executive chair in 2019, was the creator of the Singles' Day sales event. Since he took over as CEO in 2015, Alibaba became the first Asian company to pass $400 billion in market value and has emerged as one of the top 10 most valuable public companies in the world.
Even as Ma prepares to step aside, there's no reason to think to the company will slow down. And between Alibaba's lean business model - it acts as a digital retail shelf rather than a warehouse - and rapid growth in Asia, this is the online retail giant with the most room to grow in the next few decades.
To give you an idea of the long-term growth you can expect, Bill Patalon says every share of Alibaba you buy - trading at about $165 at the end of 2018 - will be worth $2.1 million in four decades.
That's why Bill says Alibaba is "one of the single greatest wealth opportunities of our lifetime - meaning it's a stock you have to own."
And that's just the first pick on our list of the top stocks to buy in 2019...
Following Money Morning Defense and Tech Specialist Michael Robinson's mantra that every business is a tech business, our next pick is using technology to connect traditional restaurants to consumers in a new way.
Food delivery has been a staple of American life for decades. But it's been difficult for many people to find delivery options other than pizza or Chinese food.
Enter Grubhub Inc. (NYSE: GRUB), a web and mobile app-based delivery service started by two students at the University of Chicago Graduate School of Business in 2004. Since then, it has grown into a $13 billion juggernaut and leader in this new industry. That makes it a natural selection for our best stocks list.
Users can log into Grubhub and search the menus of a variety of restaurants in their area. Once they place their order - a simple click, with tip included - a third-party driver will go to the restaurant, pick up the order, and deliver the food right to the user's door. No paper menus. No phone calls. No hassle.
And Grubhub keeps the user updated via text so they'll know when the order will arrive.
As of 2017, Grubhub's active user base had grown to nearly 15 million, almost double what it was the year before. And there's still room to capture a bigger market share. According to Statista, the U.S. restaurant industry is valued at about $800 billion, with 10% of that belonging to takeout.
Grubhub closed 2017 with an impressive 38% growth in sales, and in the third quarter of 2018, sales were up 52% from a year earlier.
Michael expects earnings per share (EPS) to continue to grow at about 30% per year - a conservative estimate. At that pace, the stock should double in price within the next two years.
Michael, by the way, can attest to the quality of the service. He and his wife are regular customers and are impressed enough with it to strongly recommend the stock.
"As millions of Americans join my wife and I in online ordering for takeout," he says, "the value of your holdings will keep rising for years to come."
Now, let's get to the top five stocks to buy in 2019...
You probably don't spend much time thinking about the logistics industry - comprising all those processes involved in getting a product or service from the producer to the consumer - but it is a huge business.
The Council of Supply Chain Management Professionals reported in June 2018 that annual spending on logistics in the United States had reached a record $1.15 trillion, or 7.7% of GDP. That's up $250 billion from the total in 2008.
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There are some giant conglomerates out there with large logistics technology divisions, such as Verizon Communications Inc. (NYSE: VZ). The problem in those cases is that logistics represents a relatively small portion of the overall enterprise, and shareholders can't pick and choose which parts of the company they want to invest in.
So we've got a pure play on logistics for you instead: Expeditors International of Washington Inc. (NASDAQ: EXPD). It's a natural selection for our best stocks to buy list.
Headquartered in Seattle, EXPD has 322 locations across six continents. It specializes in supply chain management for all kinds of industries, including autos, aerospace, energy, healthcare, retail, and technology.
Expeditors International works with clients to maximize productivity from order inception to delivery. That might include optimizing production, packaging, and shipment processes. Or it could mean handling shipping and customs: Expeditors have relationships with every major carrier by air, land, and sea.
Where this company really flexes its muscles, though, is in developing custom logistics software. That way, clients can take over the reins of the supply chain themselves, with an interface that works seamlessly with their specific needs.
The company boosted sales by 13.5% in 2017, up to nearly $7 billion. Its EPS for 2018 will be up by 33% if estimates for the last quarter hold up. And according to FactSet, earnings are projected to keep rising through at least 2020.
And as Michael Robinson explains, this is one company that doesn't have to worry about trade wars.
That's because warehouse space to store goods is at such a premium right now. According to CBRE Group Inc., industrial vacancies have been falling for 32 consecutive quarters.
With demand for space steadily outstripping supply, the companies tasked with moving the stock inside those spaces will have their hands full regardless of any intervention by governments in the next few years.
"Add it all up," Michael writes, "and you can see that Expeditors has the right tech tools at the right time. It's ready for a boom in shipping and logistics."
Here's the next pick on our best stocks for 2019 list...
While some investors are busy speculating on the next mobile app or wearable device, this pick keeps delivering steady gains by providing essential services that are constantly in demand.
After all, you're not going to stop throwing out your trash any time soon. And neither is anybody else.
For Waste Management Inc. (NYSE: WM), your trash is its treasure.
With more than 21 million customers, WM is the largest provider of waste management and residential recycling services in North America.
According to CSIMarket, Waste Management holds the largest market share in the United States for every major segment of environmental services - and a 37% share overall. That's compared with a 22% share for its top competitor.
But the moneymaking opportunities don't stop when the trash is picked up. WM is also a leader in converting trash to LNG fuel. In turn, that fuel can go into its truck fleet or even into natural pipelines or local electric grids.
In other words, Waste Management is not just a trash company. It's also an energy company.
It's solving one of humanity's more pressing problems - how to deal with a growing population using the same amount of space - by turning it into a new resource for communities and more profits for shareholders.
WM's dividend has increased 14 consecutive years and currently yields a solid 2%. But that stable income generation hasn't kept WM from being a growth stock. The stock has risen 112.3% over the last five years, compared to 52.1% for the S&P 500.
Those gains worked out well for subscribers to Keith Fitz-Gerald's High Velocity Profits service.
Last November, Keith recommended a Jan. 19 call option on WM. He recognized that it was a great stock, and an option trade allowed subscribers to put up a relatively small amount of money and enjoy big, fast gains if it did well.
That's exactly what happened. By the time the options expired, about two and a half months after the initial recommendation, they had gained 275% in value.
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Don't worry. There's plenty more fuel to propel this stock upward in the coming months and years. And if you want to go for truly fast profits, a call option may be the way to go.
But if you'd rather have a stock you can hold onto forever - or as long as people keep producing trash - Waste Management is exactly that.
Best of all, we still have three more picks on our best stocks to buy list...
Nothing is certain but death and taxes. So naturally, the top provider of tax preparation software is one of the most dependable investments you can make.
But Intuit Inc. (NASDAQ: INTU) is much more than its wildly popular TurboTax software. Its QuickBooks software has long been a favorite of small businesses. And in 2014, it launched QuickBooks Self-Employed, tapping into an enormous and growing market.
As of late 2018, the United States was riding an impressive 95-month job creation streak. What's even more striking is that the freelance workforce - now accounting for $1.4 trillion annually - is growing three times faster than the overall labor force.
At this rate, according to a 2017 study by Upwork and Freelancers Union, freelancers will be a majority of the U.S. workforce by 2027.
Some of those new freelancers are making the switch out of pure entrepreneurial spirit, and some are simply adapting to economic realities. Either way, this trend puts Intuit, which already has 5.5 million small businesses and freelancers as customers, in an ideal position to serve this growing segment of the population.
QuickBooks Self-Employed is available at a very reasonable subscription price of $10 per month. It allows users to track every aspect of their finances, including mileage for work purposes, and to keep personal and business transactions separate along the way. And it can all be done seamlessly between the user's computer, tablet, and smartphone.
Upgrading to the $17-per-month package gives them TurboTax too, which is fully integrated into QuickBooks to make the user's yearly tax return a cinch. It will even calculate estimated taxes automatically over the course of the year.
Intuit's overall sales grew by 12% year over year in the first quarter FY2019, but EPS nearly tripled from $0.11 to $0.29.
As the workforce changes over the next decade and more, Intuit is going to be one of a small number of companies prepared to reap the rewards. That makes it one of the best stocks you can buy now.
"This is one of those dependable tech leaders that you can count on for the long haul," writes Michael Robinson, "to keep you squarely on the road to wealth."
The autonomous vehicle market is expected to reach $54.2 billion in 2019, according to Allied Market Research. By 2026, it will be more than 10 times that.
So it's no surprise that we'd have a play on self-driving cars on our list. But you might not know it's a company that used to be known for making graphics cards for video games.
Nvidia Corp. (NASDAQ: NVDA) has been transforming itself in recent years. Now it's a leader in all kinds of game-changing technologies, from cryptocurrency mining to virtual reality to artificial intelligence.
But perhaps most exciting is its Nvidia Drive AGX, a self-driving platform being installed in many auto models currently on their way to sales lots around the world.
That includes Volkswagen AG (OTCMKTS: VLKAF), which has put self-driving capabilities for all its cars in Nvidia's hands. And Drive AGX-equipped cars will be coming soon from Audi AG (OTCMKTS: AUDVF), Volvo AB (OTCMKTS: VLVLY), and Tesla Inc. (NASDAQ: TSLA).
Nvidia self-driving is not just for cars either. Trucks made by PACCAR Inc. (NASDAQ: PCAR) are sporting Drive AGX, and so are fleet vehicles deployed by Deutsche Post AG (OTCMKTS: DPSGY).
A partnership with Daimler AG (OTCMKTS: DDAIF), which makes Mercedes-Benz autos, shows off even more of what Nvidia can do. The voice-activated Mercedes-Benz User Experience (MBUX) learns a driver's preferences over time and can make smart suggestions about music, directions, and various other settings in the car. It converses in plain language and features a beautiful 3D touchscreen display.
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It's no surprise then that Nvidia's fortunes are skyrocketing. Sales have nearly doubled since 2016, and profits are on pace to jump more than 50% for the fiscal year ending January 2019.
But as Michael Robinson says, Nvidia "hasn't even hit its stride yet." He sees shares rising 65% in 2019. And as self-driving technology takes over the automotive world, Michael says, "the sky is truly the limit."
That assessment is borne out by our Money Morning Stock VQScore™ system, which gave NVDA a top score. That indicates that it's undervalued and due for a rise.
Keep reading for the No. 1 pick on our best stocks to buy in 2019 list, along with a wild card stock with incredible profit potential...
For years, Wall Street analysts have been wringing their hands over every little bit of bad news for Apple Inc. (NASDAQ: AAPL). Whether it's an earnings miss or a production slowdown or the specter of hitting "Peak iPhone," there's always a reason for investors to jump ship.
And in late 2018, it seemed like they were finally right.
AAPL shares slipped 26% in October and November. That was due to a number of factors, including unimpressive iPhone sales, tariffs threatened by President Trump, and the general downturn in the market.
But none of these are real long-term threats for Apple. In fact, this stock is still a great buy.
Customers have already demonstrated that they're willing to pay higher prices for new iPhones, keeping sales figures up even if the gadgets don't fly off the shelves at record-breaking speed.
More importantly, as Keith Fitz-Gerald points out, Apple is not a device company anymore.
That is, it's not unit sales of Apple devices that are driving the company's growth. It's the services Apple delivers to the devices people already own.
Sales of those services, including Apple Music, iCloud, and the App Store, have grown to an annual pace of $40 billion. And some projections have that surpassing $50 billion within the next year, even faster than CEO Tim Cook's ambitions.
Those service sales are largely what drove Apple's impressive 29% growth in EPS for the 2018 fiscal year. Not that it will stop the skeptics from chattering about the headwinds Apple faces. But by now, we're used to that kind of noise from Wall Street.
Michael Robinson expects AAPL - conservatively - to keep growing to $250 per share in the next couple years. And Money Morning's resident Apple expert, David Zeiler, puts it at $300 per share during the same period.
Also, just like Nvidia, Apple received a top score from our Money Morning Stock VQScore™ system.
Because of Apple's long-term performance and reliability, Bill Patalon considers it one of his "Accumulate" stocks. That means it's a stock you can keep buying more of year after year and keep gaining wealth from it.
But regardless of whether you buy it in installments or in one chunk, you should look forward to Apple's performance in 2019.
Now that you've seen our list of the best stocks to buy in 2019, you may have a few other questions about investing in stocks.
But before we answer those questions, let's get to our "wild card" stock to buy in 2019. This pick involves a little more investing risk, but could pay off handsomely in 2019...
Some Money Morning readers have already seen big gains from our next pick. After Money Morning Chief Investment Strategist Keith Fitz-Gerald recommended it last November, the stock price of Canopy Growth Corp. (NYSE: CGC) shot up 165% over the next year.
Over the same time span, the S&P 500 was up just 8%.
That was Keith's first cannabis pick, as he recognized that the industry was entering the mainstream. Since then, recreational cannabis has become legal in Canada, and Canopy - the country's biggest grower - got a listing on the New York Stock Exchange.
Also, beverage giant Constellation Brands Inc. (NYSE: STZ) upped its stake in Canopy from $191 million to $4 billion.
Take that as a hint of what's to come. Cannabis-infused beverages aren't yet included in Canada's legalization, but they will be soon. And Canopy is in a prime position to be among the biggest beneficiaries when the time comes.
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In fact, beverages are a prime candidate to take over as the cannabis consumption method of choice for a number of reasons...
First, they are simply a more familiar option than smoking to many people. A Canadian government survey showed 77% of adult residents drink alcohol, but only 17% smoke.
And unlike alcohol, cannabis is calorie-free, giving drinkers an alternative that won't contribute to weight gain. (Researchers are currently working out ways to eliminate the infamous "munchies" experienced by some marijuana users.)
Plus, cannabis doesn't cause hangovers.
So Constellation and Canopy have a chance to attract not just cannabis users looking for new consumption methods, but also drinkers who want the kick without the side effects.
For the fiscal year ended March 2018, Canopy more than doubled its revenue. And that's before Canada had legalized recreational cannabis. With one phase of legalization out of the way and more coming in the next couple years, this company is set to dramatically expand its business.
"If you want to make a profit on the booming cannabis sector," Michael Robinson says, "then I suggest jumping on board Canopy, where the opportunities and gains are seemingly endless."
Now that we've covered the full list, here are our answers to some of the most popular stock questions we hear from readers...
Yes, stocks are a good addition to any investment portfolio. Over time, stocks can be the most successful way to build wealth.
Stocks typically offer higher returns than other investment vehicles, like real estate and bonds. We identify the factors that make stocks a good long-term wealth builder and give investors those picks regularly.
Trading stocks by trying to time the market for short-term gains is much riskier. It can be done successfully - and profitably - but if it's done without proper research and analysis, it often results in big losses.
One key step to picking the best stocks to buy is examining a company's earnings reports over time to analyze the firm's financial health. The most important metrics to measure are earnings per share (EPS) and price/earnings (P/E) ratio.
EPS is the portion of a firm's profit distributed to each share of stock. It's the most basic and important number for measuring a company's profitability and helps to calculate valuation metrics like the P/E ratio.
The P/E ratio shows how much investors can invest in a stock to recoup one dollar of earnings. In other words, it shows how much people will pay for every dollar a company earns. The ratio is calculated by dividing the most recent share price by the most recent EPS.
The eight we mentioned here are a great place to get started. But if you're looking to expand your portfolio, keep up with Money Morning throughout the year.
We'll be offering expert recommendations periodically, and every few weeks, we publish a list of the best stocks to buy based on the most up-to-date information available.
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