It is best to be prepared for a turbulent stock market in 2015—an assessment that’s come directly from some of the best stock pickers in Seattle.
The volatility we experienced in the US stocks during the tail end of 2014, has continued into 2015. With such an unstable start, it is best to nitpick the right companies to invest, in addition to your personal investment strategy.
The stock picks below, from the world’s two stock exchange leaders—NYSE and NASDAQ, are expected to be good investments for the year 2015.
Top NASDAQ Stocks
When it comes to market share and volume traded, this all-electronic stock exchange is the largest in the US. Holding a market cap of $8.5 trillion, the NASDAQ has many of the world’s top tech companies listed under it. We look at the three best stocks to invest in 2015.
A triumphant 2013 did not continue in 2014 for Google (NASDAQ:GOOGL). The challenges faced in 2014 has had an impact on the Google stock. While the stock gained close to 59% by the end of 2013, the GOOG stock dropped by 5.2% by end of 2014. A number of factors contributed to this including the company’s general tax risks, European Union investigation, and Android investigation. To add to this, Google’s main earning source has been in trouble partly due to competition, and the shift from desktop to mobile advertising. Google Q4 earnings results were mediocre too. (See: Google stock analysis video)
The company is taking measures to improve Google ad revenue and despite setbacks in 2014, the company is expected to bounce back in 2015. Its video site, YouTube, and play store for Android apps are witnessing healthy growth. They are expected to boost the company’s value this year, contributing an overall 20% to revenue. Over the next half a decade, Google has the potential to grow about 15% to 20%, and in a single year its share can go up to 20%. These factors make Google’s stock a valuable investment.
Micron Technology (NASDAQ:MU)
A peek into the last year’s growth of Micron (NASDAQ:MU) is a good indicator about the company’s potential. The company’s shares have grown a whooping 61% in 2014, sending good news to stock investors.
Source: Micron stock price chart by Amigobulls
Micron Technology is one of the leading companies that manufactures DRAM, a type of random access memory for computers. Seeing the price of DRAM doubling in two years, many investors have believed that it may lead to overproduction and ultimately its value will plummet. But, the point to consider here is that, along with Micron there are only three major companies that manufacture DRAM. With only a few competitors, Micron doesn’t have to worry about the decrease in value for its products in the near future. With these factors in mind, the company is expected to grow up to 40% in 2015, yielding good returns for investors. (See: Micron valuation video)
Cognizant Technology Solutions (NASDAQ:CTSH)
A worldwide provider of consulting, information technology, and business process outsourcing services, this American MNC has done a good job of strengthening client relationships and broadening their scope of services.
Looking at the growth that Cognizant (NASDAQ:CTSH) has enjoyed in the past decade you’ll see that it has earned twice more than the IT industry’s average standards. While it is impractical to expect such growth to continue in the coming decade, it is sensible to predict that growth will stay above average. The company’s stock shows both defensiveness and growth, maintaining an impressive balance sheet without debt. These attributes give green signal to predicting a stable future for the company’s stocks, thereby proving to be a viable stock investing choice. (See: Cognizant stock analysis)
Top NYSE Stocks
Nicknamed the Big Board, the New York Stock Exchange is the world’s largest and one of the oldest stock exchanges, with a market cap of US $25.3 trillion as of 2014. Many top companies in the world with rich legacy and long-standing stability are listed under the NYSE. Let’s see which of the biggest conglomerates rank top in our best pick of the year.
United Technologies Corporation (NYSE:UTX)
Founded in the year 1975, United Technologies (NYSE:UTX) is known as a master of many trades. The company contributes in research, development, and manufacturing in many fields such as helicopters, aircraft engines, fuel cells, elevators, and HVAC amongst others. The diversity of the company comes not just from the fields but also in its various locations.
This protean company has a stellar track record in its financial performance—consistently profitable in stock market for the past 10 years, double digit EPS growth, and excellent cash generation. While there are a few downsides, like decelerating growth outside the US and the abrupt departure of CEO Chenevert, the company is still expected to be a favorable stock market investment for patient investors.
JP Morgan Chase (NYSE:JPM)
JP Morgan (NYSE:JPM) has total assets worth US$2.515 trillion and is the largest bank in the US. Forbes magazine has rated it as the world’s third largest public company. It also has the second largest hedge fund unit in the US.
Although the bank carries many accolades to its name, it has been going through a rough patch for the past few years. But in the coming years, the company’s fundamentals are expected to improve because of the following reasons:
- The housing market is stabilizing.
- Unemployment rates are declining.
- Regulatory uncertainties are expected to gain more clarity.
- Interest margins are expected to improve due to high interest rates.
- Capital ratios are sturdy.
JPMorgan is expected to give handsome rewards, especially for long-term investors.
Yum! Brands (NYSE:YUM)
Three of the drool-worthy fast food companies in the world are run by Yum Brands (NYSE:YUM) — KFC, Pizza Hut, and Taco Bell. This Fortune 500 company is the world’s largest fast food restaurant conglomerate.
The major downside of Yum Brands in the recent years is its negative publicity due to food safety issues in China — a market which contributes to around 50% of the company’s revenue. This downside has lowered its EPS in 2014. After facing such a downfall, the company is expected to make a comeback this year, especially in China, making it a good stock market investment option. The below stock chart shows Yum stock EPS for 2014. (See: Yum Brands stock analysis)
Source: Yum EPS Chart by Amigobulls