2 Hot Stocks to Buy for 2019


Chris Hill: Aside from financials, in terms of individual
stocks, what do you have your eyes on in 2019? Andy Cross: Thanks, Chris, for that. One that I think is set up to do well on a much larger
size is Alphabet, the Google parent business. When you think about all that they are in,
and where they’re taking that business. Obviously, search and online advertising continues
to be the huge driver, but they’re involved in so many other investments
they’re making. It’s a $750 billion business. They have about $100 billion in cash.
They’re making all kinds of investments. Their YouTube business
continues to grow. I think it’s probably more
profitable than what we’re seeing. Online advertising will
continue to evolve and grow. Obviously, a company that size has some
struggles when it comes to regulatory concerns. The online advertising market, while it’s
evolving, is under some pressure, as we saw with the likes of Facebook, when it comes
to privacy issues and what that might mean for the online advertising business. But I just like what’s going on at Alphabet,
with the way that they’ve structured that business with Google and the other businesses
and investments they’re making in other businesses. And, the stock is really not
that expensive. It’s one that I like now. On the financials side, piggybacking back
there, a non-bank that I like is MarketAxess, which operates the largest online bond trading platform.
Hill: Wow, that sounds sexy! [laughs] Sorry! Cross: They’re basically trying to democratize
and open up bond trading much like you’ve seen with platforms and discount
brokerages on the stock side. It’s much more complex, much more done old
school through phones or text messages or e-mails when you’re trying to match up
buyers and sellers of corporate bonds, sovereign bonds, and lots of
other fixed instrument investments. They’re the market leader. They have the largest market share
when it comes to online bond trading. That’s a growing market. They’re led by their founder and CEO, who’s
the largest individual share owner, Richard McVey. It’s extremely profitable. Returns on
capital are exceptional. They’re growing. I expect that market to continue to evolve
and improve over the next few years. So, MarketAxess is one stock
that I like this year and beyond. Hill: To go back to Alphabet for a second,
obviously the FAANG stocks have dominated media coverage for so long. It’s interesting to see, with the pullback
that we saw over the last couple of months, a company like Amazon. The focus is on, “They’re down
from their highs.” Well, they are. But over the past 12 months,
it’s a stock that’s still up about 30%. Whereas, in the case of Alphabet,
Alphabet is basically flat from a year ago. Cross: Yeah. The stock
has basically trodden water. That’s one reason why it sells somewhere in
the 15-18X earnings, when you think about the amount of cash flow they generate and
where they can put those investments into now. They have to make money
on those investments over the long-term. I think they will. Again, it’s a very
large company. It’s widely owned. But I think that’s a business that you can
own and be comfortable with looking at the next few years, regardless of what’s going
to happen to the stock market in the short-term.

6 thoughts on “2 Hot Stocks to Buy for 2019”

  1. Great video, These are 3 stocks that I bought and will continue to buy.
    https://youtu.be/LRGRlOMgfRM

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