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Trading Lessons

Hit or Pass? An Overview of 2017’s Best Ranked Stocks

Commodities / Sector Analysis Jun 14, 2017 - 06:08 AM GMT

By: Submissions

Commodities

Subject to an entire array of occult myths, the stock market is, in fact, the platform through which companies raise money. After an IPO – initial public offering – based on the estimated value of the company at the time, the ownership is split into a number of shares. Each share is a piece of the company.

However, the primary activity of the stock market takes place after the IPO. Having been attributed a value, the shares are constantly being bought or sold on the stock market, increasing or decreasing in price. The largest markets, such as the NYSE or NASDAQ, have millions of shares issued, with thousands of investors who buy or sell in a single day. This high volume of shares that change hands means that in that particular market, it is easy to buy or sell shares.


Source

For companies, the value of their shares after the IPO is a paramount indicator of their performance. If a company is expected to grow and reach high profits, the value of its shares rises. A lively financial year already, 2017 requires an overview of the five best-ranked stocks.

GOOG – Alphabet

Google and its lesser known parent-company Alphabet generate income through supporting advertising on its many services, apps, and content. Found in a sharp rise in the second half of 2015, the company was less successful in 2016, with a stock increase of only 4% despite the 16% growth in earnings.

However, Google reinvested about $85 billion of profits back into its programs and services. 60% of that sum is overseas, so any tax cut upon repatriation in the U.S., as proclaimed by the new administration, would greatly benefit the company and the shareholders. Google is and will remain one of the most resounding names in the IT industry. However, at $1000 per share, investing into Google might take a toll on the budget.

GM – General Motors

After being hit by the 2008 crisis, the mammoth company General Motors is currently still trading at around $30-33 a share. However, it is on a powerful upwards trend, and the price will likely continue to rise. This is because GM is investing into the production of multiple electric and hybrid cars, like the Bolt, which are intended to be sold at prices much lower than those made by Tesla, the perceived leader of this market.

If GM’s current price-to-earnings ratio on the market is 4.3, the company averaged around 12.2 over the past five years. It is therefore currently at a low point, but the indications are that it will rise again and soon.

XOM – ExxonMobil

A giant of the oil industry, ExxonMobil’s activities include everything from the exploration and production of crude oil and natural gas to the production of petroleum products and their sale. Since oil prices are up 50% from January 2016, the company is set to make a big profit. Moreover, Exxon appears to be on its way to cash flow neutrality, not depending on outside money for recapitalization.

Expectations in the oil industry are also looking up as the U.S. policy towards Russia might change with the new administration, giving Exxon access to huge reserves of oil. Also at a low point at around $80 per share, seats in the oil industry are up for grabs for anyone with a meta trader 5 account; and Exxon is a good choice to be made.

RTN – Raytheon
Still playing on the expectations of the market regarding the policy of the new administration, investing into Raytheon, a manufacturer of diverse military equipment, may be very profitable. A cynical beneficiary of the new tensions on the global stage, in 2016 the company’s backlog hit $35.8 billion, an increase of $2.2 billion from 2015. Currently, at $163 and rising, the Raytheon’s stock prices increase when most others fall.

JNJ – Johnson & Johnson

A diverse investment portfolio has to include a company dealing in pharmaceuticals. With an entire array of products and customer-centric services, Johnson & Johnson is a conglomerate of 250 operating companies. The company enjoys an AAA-rated balance sheet, organically produces cash flow and its returns are above average.

Due to uncertainty regarding drug prices, the pharmaceutical industry has not been in its very best shape throughout 2016. In 2017, the market is poised to recover, and Johnson & Johnson will be leading the charge. Trading at $127 a share, the company provides a relatively cheap and secure entry into the pharmaceutical domain, disproving the words of those who say that investing is not unlike gambling.

Overall, 2017 is a year of recovery for some of the most important sectors of the economy. After a slow growth or even a decrease in value, investing in the leaders of each industry while the prices are still low is a golden opportunity for both well-versed investors and first-timers. By holding a diversified portfolio split among the most important companies in IT, car manufacturing, pharmaceuticals, oil and armament, profit from at least a few sources is almost certain – as much as anything on the stock market can be certain.

This is an paid advertorial. Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


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