As we head into 2020, the following 5 stocks are well-positioned and worth adding to your watchlist. These stocks span the technology, media, finance, retail, and consumer goods industries which should provide some diversification too. CFDs on all these stocks can be traded on the One Financial Markets platform.
Nvidia is one of the most important suppliers for manufacturers creating the world of tomorrow. This includes artificial intelligence, connected devices, and autonomous vehicles and machines. Over the last year, the company has been dealing with a backlog created when the crypto bubble burst. However, that is now in the past and Nvidia’s share price is beginning to perform once again.
Nvidia is worth $136 billion and has annual revenues of around $10 billion. The price multiple based on the last year of earnings is quite high at 62, but that is expected to unwind quite quickly. When that happens, the stock will look cheap and the momentum should continue.
The Walt Disney Company (DIS)
The Walt Disney Company has come a long way since it was founded in 1923. Under the leadership of Bob Iger, Disney has acquired an enviable portfolio of businesses, including its theme parks, ESPN, and the largest content library in the world. Pixar, the groundbreaking animation studio which produced Toy Story and Finding Nemo was purchased in 2006. Marvel, 21st Century Fox, and other companies were also acquired over the last 10 years. In addition, several new theme parks have been opened around the world.
The latest development for Disney is its entry into the streaming TV business with Disney Plus. While the streaming business is very competitive, Disney has a unique advantage – its massive portfolio of content. This means the company doesn’t have to produce or buy content like Netflix, Amazon, and other competitors do. The lower cost base has allowed Disney Plus to launch with a monthly subscription 50% cheaper than Netflix.
Disney is worth $269 billion and has annual sales of nearly $70 billion. The company is also very profitable with an operating margin of 25% and a ROE of 19%.
Under Armour Inc. (UAA)
Over the last decade, Under Armour has been one of the only new clothing companies to establish a strong brand in a market dominated by the likes of Nike. Between 2012 and 2016, Under Armour became a market favourite as growth surged. But then the wheels came off and the share price collapsed from over $50 to as low as $12 in 2017. This happened because the company lost focus and tried to appeal to the mass market.
Since 2017, Under Armour has been refocusing and streamlining its operations. The turnaround has taken longer than expected but is finally beginning to bear fruit. Although revenue growth is still slowing, margins and profits are improving due to better inventory management.
This is a turnaround story that looks promising, Under Armour has a strong brand in the market worth $168 billion and growing. When sales begin to improve again, the share price will respond rapidly.
Visa Inc (V)
Visa is the global leader in credit card and debit card transactions, with a market share of over 60%. It has the unique advantage of being able to benefit from both e-commerce and in-store sales. It’s safe to say that the share of payments being made using companies like Visa is growing, as are the number of people with credit cards. For this reason, Visa is one of the best US shares to invest in for the long term.
Despite being the market leader, Visa tends to trade at a slight discount to its largest competitor, Mastercard. It is worth $394 billion and earns revenues of over $22 billion a year. Visa is very profitable, with a ROE of 40% and an operating margin of 65%. The 0.6% dividend yield is a further bonus.
Unlike many “bricks and mortar” retailers which are struggling to compete with the digital economy, Walmart is prospering. It took the company a while to get its in-store offering on the right path, but its online sales are now starting to accelerate.
Because Walmart already has so many stores and warehouses in the US and elsewhere, it is the only company with any hope of competing with Amazon. Online grocery sales are now a major growth driver for e-commerce, and Walmart is ideally placed to benefit.
The retailing giant is worth $336 billion and earned $521 billion in revenue over the last 12 months. Sales growth may be slow, but the company knows how to use its size to improve earnings. Its stock price has also broken a major technical level, leaving room for further upside. Walmart pays a generous dividend worth around 1.7% of the share price.