Five stocks outperforming in 2020
AsTesla and Apple made news last month with their stocks splits driving some stocks higher, the stock market is cooling off in September. Stocks in the long run will do well but expect some stock swings in the near future.
This month these stocks are cooling off as the price drops down a little.
Other than one stock, these stocks are well-known companies you may have heard of and may want to invest in some of these.
The stock prices listed are from the close of business on September 8, 2020. Prices you see may differ from what I present.
Alibaba Group Holding (BABA)
Alibaba provides online and mobile commerce businesses in China and other countries. Alibaba has been called the Amazon of China. The company operates in four segments, cloud computing, core commerce, digital media, and entertainment. The company is a big e-commerce company that provides a mobile commerce platform for retailers, pharmaceutical and healthcare products, a restaurant and travel platforms, and AliExpress, an online wholesale marketplace. Alibaba has a big cloud computing business similar to Amazon. Growth has been strong for years and investors think there is plenty of upside. The companies revenue was up 18% in the last quarter. Cloud services have increased by 58% in the past quarter after averaging triple digits over the past five years. The company plans to support over a billion people and create over $1.4 trillion over the next four years.
Draft Kings (DKNG)
The company operates as a digital sports entertainment and gaming company. The company provides sports updates, sports betting, and opportunities for iGaming. States are desperate for money and involved in various forms of gambling. Draft Kings may be an option and have the first movers advantage as well as numerous partnerships. Recently, Michael Jordan joined as a board advisor and received an unspecified amount as equity interest. Draft Kings has recently accepted the PGA Tour’s first betting operator. The company has partnerships with Major League Baseball and Casino Queen Sportsbook in Illinois. As sports are reopening, betting interest will also increase. Analysts expect $500 million in revenue this year and a 51% increase by 2021. Revenue is expected to reach $4 billion with 25% in cash flow.
Pinterest Inc. (PINS)
The company went public last year and the visual photo and video platform is seeing some growth this year. The website allows people to find recipes, children’s activities, home and style designs, travel destinations, and others. Pinterest had a very bullish earnings report recently. Revenue was up 4% as the bottom line was still in the negative. There was a huge increase in user activity with a record 416 million monthly users this spring, a 39% increase from 373 million. Estimates are the company has a lot more room to grow with some expecting to see Pinterest reach 700 million users. Advertising is going well for the company as they generate $3 per user. SNAP makes $6.00 and Facebook makes $30 per user.
Roku, Inc. (ROKU)
ROKU operates as a TV platform along with its related systems. Two segments make up the company as it has a Platform and Player. The platform allows users to watch movies and TV shows, and live sports and music. The company provides services in North and South America, and Western European countries such as the United Kingdom, France, and Ireland. Video streaming has exploded this year with the virus as 56% of Americans are watching movies and shows at home. The global market for streaming reached $42.6 billion in 2019 and expected to grow by 20% in 2027. ROKU allows users to access free streaming channels you would normally find on Netflix, Disney +, Hulu, Amazon Prime, HBO Go, Vudu, Apple TV, Sling, and Pandora. This new way to watch TV has benefited ROKU tremendously. Year over year account service for ROKU has grown 70%as streaming hours increased 80%. Health and fitness shows increased 130% in May as fitness centers closed temporarily. Advertisement sales are down in North America and soon in the United Kingdom. This hasn’t affected ROKU much as they have 1% of the $70 billion ad market. ROKU serves a big share fo the TV market and the potential for growth is enormous.
Taiwan Semiconductor Manufacturing Co. (TSM)
This company manufactures and sells integrated circuits and semiconductors. They also offer engineering services account management and customer service. Taiwan Semiconductor offers services to customers in North America, Europe, Japan, China, and South Korea. Chipmakers are vital for delivering information and powering devices. Taiwan Semiconductor is the leader in this space. They provide hardware in cars, cell phones, computers, and household appliances. The stock remained strong this year as Q2 sales totaled $10 billion and earnings per share of 78 cents nearly doubled from last year. Smartphones made up half of the sales. Chips for cloud computing were also a big driver in the sales with a 38% increase in the quarter. This accounted for one-third of the sales. The company expects this segment to be a big factor in the coming years. Management achieved 21% higher revenue in Q3 in line with analysts’ estimates.
Note: The writer previously owned PINS but sold the stock in August for a 60% gain. The writer’s teenage son has owned ROKU since the stock IPO date September 28, 2017.
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Tom Handy is a top Writing, Finance, Investment, and Bitcoin writer on Medium, and the father of two kids. He retired from the Army and sits on several non-profit boards. You can find him on Twitter @tomhandy1.
This article is for informational purposes only. It should not be considered Financial or Legal Advice. Not all information will be accurate. Consult a financial professional before making any significant financial decisions.