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Amazon Widening Moat With Prime, Alexa And Echo Integration


source: Cnet

For the first time ever, Amazon recently released its full-year shipping numbers for Amazon Prime, saying for 2017 it delivered more than 5 billion products around the world, and increased its prime subscriber base at a pace it never has reached in the past.

It also said in the Christmas season of 2016 it delivered 1 billion products – although it didn’t release full 2016 shipping figures.

It also said the biggest seller among its Prime members in the U.S. was Echo Dot and Fire TV Stick. The Fire TV Stick can communicate with Alexa if the remote has a Voice button, further locking in consumers to Amazon’s ecosystem. Most if not all the things you can do using an Echo can be done with a Fire TV is you want.

Besides the lock-in, Amazon (AMZN) has revealed where it’s taking all of this: Developing an ad model around the devices it makes that use Alexa. The significance of Prime members buying the two devices in large numbers points to Amazon having a sizable consumer base to work from.

Combined with other Prime perks, it’s going to be difficult for competitors to dislodge customers from the integrated services and products.

Ad potential

Even though Amazon is easily the market leader in e-commerce, that’s not the case with its advertising business, which is fifth among U.S.. companies. The bulk of Amazon’s ad revenue comes from sponsored placements on its website.

In the third quarter of 2017 ad sales came in at over $1 billion. According to eMarketer, that will grow by 42 percent in 2018, to $2.4 billion. That pales in comparison to Facebook’s (NASDAQ:FB) $21.6 billion and Google’s (NASDAQ:GOOG) (NASDAQ:GOOGL) $40.1 billion. From that reference point, Amazon has nowhere to go but up with its ad growth.

As for voice search and related ad potential, Google said as far back as May 2016 that 20 percent of searches on mobile were from voice. Looking ahead, comScore has said it believes voice-initiated searches will account for about half of all searches by 2020.

This is a powerful ad revenue catalyst for Amazon, which holds close to 75 percent market share at this time, and may have increased that in the Christmas shopping season.

A report from CNBC noted that sources tell them it is in negotiations with a number of large brands, including Clorox (NYSE:CLX) and P&G (NYSE:PG), either to promote products within Alexa skills, or to sponsor products when Alexa provides suggestions. That would be similar to shopping within the existing Amazon interface, with the exception of it being a combination of audio, and now it appears video, with the move toward offering Echo with a screen.

It’ll be interesting to see if it innovates with Fire TV and moves in a similar direction.

The future of Alexa and Echo will probably be immersive

Based upon the response of Amazon to audio ads launched by VoiceLabs in May 2017 for devices using Alexa, it appears the company wasn’t impressed with the results, as it was shut down by Amazon.

Interestingly, CEO Adam Marchick said consumers were highly receptive to the audio ads. He also said there was a lot of advertiser demand from CPG companies, to prompt people to add products to their shopping carts.

It’s possible the results were OK, but Amazon may have been looking for a lot more. I think Amazon sees video being a part of the future of Alexa and Echo, and is probably positioning itself to offer a more immersive ad experience for consumer, by which I mean one that includes all the senses.

The strong sales of Echo Dot doesn’t lend itself to that, since it doesn’t include a screen at this time. But the strategy to me seems to be to get the devices in the home and grow and retain hefty market share, and then promote the idea of a premium device and experience, led now by Amazon Echo Show, which does have a screen.

I think we’ll probably see Amazon eventually roll out a lower cost Echo with a screen in the not-too-distant future, if it is in fact looking to ramp up its video business by including visuals with the audio of Alexa.

Conclusion

Not to be lost in all of this is the ongoing growth of Amazon Prime. While we all know a percentage of the people getting temporary free Prime subscriptions during the Christmas season are going to drop out, but a significant number will stay on as well.

Amazon is obviously building an ecosystem with its Prime, Alexa, Echo, and probably Fire TV, which will make it extremely difficult to compete against.

As it builds that out, not only is it generating more revenue from its Prime members, which most investors know about, but it seems like those using Alexa are highly engaged when ordering from the e-commerce giant.

This is prepping Prime subscribers for the convenience of using Alexa and Echo to accept ads in the future on the device. Ads that won’t be considered intrusive, but part of the experience of being offered suggestions that are based upon the comprehensive database Amazon has on its customer’s buying habits and interests.

Once again, I think Amazon has outmaneuvered its competitors and is about to become a strong player in the digital ad space. This should add yet another solid revenue stream to its growing business.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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7 Stocks Leading the New Year Charge

Stocks are surging higher on Tuesday, the first trading day of 2018, as investors kick off the new year just as they left the old one: With smooth, consistent buying strength.

There is no particular catalyst for the move higher, although seasonality points to first-business-day-of-the-month portfolio inflows and a tendency for the beginning of January to be strong. Can the momentum continue?

The folks at the Almanac Trader note that January has had a volatile reputation since 2000, with 10 of the past 18 years featuring nasty declines starting with the 5.1% pullback that kicked off the dot-com collapse. January 2009 featured an 8.6% loss that was the worst January on record going back to 1930.

If the bulls are going to buck the trend, these seven stocks need to keep pushing higher:

Stocks to Buy: Alphabet (GOOG)

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Alphabet Inc (NASDAQ:GOOG, NASDAQ:GOOGL) shares are on the move, reversing a multi-week downtrend off of the high of near $1,080 set back in the middle of December. Shares are up 15% from the lows seen in September.

The company will next report results Feb. 1 after the close. Analysts are looking for earnings of $9.96 per share on revenues of $31.60 billion. When the company last reported on Oct. 26, earnings of $9.57 beat estimates by $1.17 on a 23.7% rise in revenues.

Stocks to Buy: Facebook (FB)

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Facebook Inc (NASDAQ:FB) shares are pushing back up towards their late November highs, rising off of the low of $170 set in early December.

Overall, the stock is up more than 20% from the lows seen back in early July thanks to steady user growth, the success of Instagram with younger audiences and the ongoing shift to higher margin video ads.

The company will next report results on Jan. 31 after the close. Analysts are looking for earnings of $1.93 per share on revenues of $12.5 billion. When the company last reported on Nov. 1, earnings of $1.59 beat estimates by 31 cents on a 47.3% rise in revenues.

Stocks to Buy: Disney (DIS)

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Walt Disney Co (NYSE:DIS) shares are surging more than 3% higher on Tuesday, encouraged by an upgrade from analysts at Macquarie.

Star Wars: The Last Jedi has officially become the highest grossing movie of 2017 bolstering sentiment after some internet-driven blowback against the plot line and Luke Skywalker’s role. Nerds.

The company will next report results on Feb. 6 after the close. Analysts are looking for earnings of $1.60 per share on revenues of $15.5 billion. When the company last reported on Nov. 9, earnings of $1.07 per share missed estimates by five cents on a 2.8% decline in revenues.

Stocks to Buy: General Electric (GE)

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General Electric Company (NYSE:GE) is a stock that Wall Street has seemingly left for dead after suffering more than a 43% decline from its summer 2016 highs.

This on frustration with the company’s direction, lack of confidence in its new management, and an underwhelming corporate restructuring plan that didn’t do enough, apparently, to trim weak performing areas like transportation.

A possible relief rally could be underway now, however, with shares pushing up and off of a three-month consolidation range near $17.50.

The company will next report results on Jan. 24 before the bell. Analysts are looking for earnings of 30 cents per share on revenues of $33.6 billion. When the company last reported on Oct. 20, earnings of 29 cents missed estimates by 20 cents on an 11.5% rise in revenues.

Stocks to Buy: Schlumberger (SLB)

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Schlumberger Limited. (NYSE:SLB) shares are pushing further away from its 200-day moving average, breaking above a seven-month trading range to return to levels not seen since May.

The bulls are being encouraged by the steady rise in energy prices with crude oil rising above the $60-a-barrel threshold today.

The company will next report results on Jan. 19. Analysts are looking for earnings of 45 cents per share on revenues of $8.1 billion. When the company last reported on Oct. 20, earnings of 42 cents per share matched estimates on a 12.6% rise in revenues.

Stocks to Buy: Chevron (CVX)

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Chevron Corporation (NYSE:CVX) shares are pushing to new highs, up nearly 30% from their summertime 2017 lows to push well beyond the previous highs hit in the summer of 2014 before the Saudis started their energy price way in the first place.

Analysts are Cowen recently raised their price target on optimism surrounding the company’s free cash flow and Permian basin performance.

The company will next report results on Jan. 26 before the bell. Analysts are looking for earnings of $1.30 per share on revenues of $38.6 billion. When the company last reported on Oct. 27, earnings of $1.03 beat estimates by six cents on a 20.1% rise in revenues.

Stocks to Buy: Netflix (NFLX)

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Netflix, Inc. (NASDAQ:NFLX) shares are surging nearly 5% higher on Tuesday, closing in on its previous high near $205 set back in October. Analysts at Loop Capital recently upgraded their price target and named the company one of their best trading ideas of the year.

The company will next report results on Jan. 22 after the close. Analysts are looking for earnings of 42 cents per share on revenues of $3.3 billion. When the company last reported on Oct. 16, earnings of 29 cents per share missed estimates by three cents on a 30.3% rise in revenues.

Anthony Mirhaydari is the founder of the Edge (ETFs) and Edge Pro (Options) investment advisory newsletters. Free two- and four-week trial offers have been extended to InvestorPlace readers.

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Shares of ExxonMobil (XOM) traded up as much as 1.5% this morning after the oil giant beat earnings forecasts. They’ve been coming in ever since.

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Exxon reported a profit of 95 cents a share, beating forecasts for 88 cents, on sales of $63.3 billion, missing forecasts for $66.4 billion.

In a note released before the open this morning, Wells Fargo’s called the result “neutral” for the stock. He explains why:

Versus our expectations, XOM beat on better downstream performance, as chemicals fell short of expectations and upstream net income was in line with our estimates. Capex was meaningfully below expectations and run rate for FY2017 guidance. Cash flow from operations was slightly below our expectations, but net cash flow after capex and dividends exceeded $2.0 billion.

stock trading software: HD Supply Holdings, Inc.(HDS)

Advisors’ Opinion:

  • [By WWW.THESTREET.COM]

    Next, on Tuesday, Cramer’s eyes will be on HD Supply (HDS) , the little-known construction supplier with 500,000 customers. This is one investors need to know about, Cramer said.

  • [By Chris Lange]

    HD Supply Holdings Inc. (NASDAQ: HDS) saw a few analysts bolster its position with upgrades after the firm beat expectations in its most recent earnings report. The price target raises included: Raymond James to $42 from $40, RBC to $45 from $40, SunTrust Robinson Humphreyto $42 from $35 and Wells Fargo to $45 from $42.

  • [By Trey Thoelcke]

    HD Supply Holdings Inc.s (NASDAQ: HDS) latest quarterly earnings report is expected before Wednesday’s open. The consensus estimates call for a profit of $0.64 in per share and $1.35 billion in revenue. Shares closed trading most recently at $33.02, in a 52-week range of $28.97to $44.73. The consensus price target is $39.00.

  • [By Lisa Levin]

    Benzinga's newsdesk monitors options activity to notice unusual patterns. These large volume (and often out of the money) trades were initially published intraday in Benzinga Professional . These trades were placed during Wednesday's regular session.

stock trading software: Popular, Inc.(BPOP)

Advisors’ Opinion:

  • [By Peter Graham]

    Founded in 1893, mid cap Popular Inc (NASDAQ: BPOP) is the leading banking institution by both assets and deposits in Puerto Rico and ranks among the top 50 U.S. banks by assets. Popular provides retail, mortgage and commercial banking services through its principal banking subsidiary, Banco Popular de Puerto Rico, as well as auto and equipment leasing and financing, investment banking, broker-dealer and insurance services through specialized subsidiaries. In the United States, Popular has established a community-banking franchise providing a broad range of financial services and products with branches in New York, New Jersey and Florida under the name of Popular Community Bank.

  • [By Ben Levisohn]

    We believe investors should continue to own three types of bank stocks: “Return of Capital (RC) Stocks”, “Risk On (RO) Stocks”, and “Multiple Revaluation (MR) Stocks.” RC stocks include M&T Bank (MTB), PNC Financial Services Group (PNC), and SunTrust Banks (STI); RO stocks include Bank of America, Popular (BPOP), Citigroup, JPMorgan, and KeyCorp (KEY); and MR stocks include BB&T (BBT) and PNC Financial Services Group (PNC).

stock trading software: Allegheny Technologies Incorporated(ATI)

Advisors’ Opinion:

  • [By Dan Caplinger]

    The stock market performed well on Tuesday, responding to steady improvement among many companies as earnings season kicked into high gear. Although political issues are likely to remain in the spotlight for some investors for the foreseeable future, many market participants are looking to economic and business issues in driving their investing decisions. Major market benchmarks finished the day with gains of 0.5% to 1%, but some stocks did much better. Among the best performers on the day were Allegheny Technologies (NYSE:ATI), II-VI (NASDAQ:IIVI), and Beazer Homes (NYSE:BZH). Below, we’ll look more closely at these stocks to tell you why they did so well.

  • [By Lisa Levin]

    Tuesday morning, the basic materials shares climbed by 0.95 percent. Meanwhile, top gainers in the sector included Allegheny Technologies Incorporated (NYSE: ATI), up 5 percent, and Mechel PAO (ADR) (NYSE: MTL), up 5 percent.

stock trading software: Facebook, Inc.(FB)

Advisors’ Opinion:

  • [By Adam Levy]

    Facebook (NASDAQ:FB) doesn’t disclose how much revenue Instagram generates, but if the numbers it does provide are any indication, it’s a lot. Most recently, the company announced it surpassed 1 million active advertisers. That’s up from 500,000 just six months ago and 200,000 around this time last year.

  • [By Craig Jones]

    Jim Strugger of MKM Holdings, spoke on Bloomberg Markets about his options trades in Facebook Inc(NASDAQ: FB) and Twitter Inc (NYSE: TWTR).

    Both companies are going to report earnings this week and Strugger wants to use options to set up a position going into earnings. He wants to buy the October 170/185 calls spread for $4 in Facebook. The trade breaks even at $174 and it can maximally make a profit of $11.

  • [By Michael A. Robinson]

    Tech Wealth Gem No. 1
    The iShares North American Tech ETF (NYSE Arca: IGM) covers the big leaders in tech. Apple Inc. (Nasdaq: AAPL), Microsoft Corp. (Nasdaq: MSFT), Amazon.com Inc. (Nasdaq: AMZN), and Facebook Inc. (Nasdaq: FB) anchor this fund, making up 30% of its portfolio. IGM has a great track record. It rose 16.6% in 2016, and over the past five years it has clocked 17.4% yearly gains. Plus, it’s up 8.3% since I brought it to you back on Jan. 6. IGM trades at roughly $136.50, with a 0.48% expense ratio.

  • [By Sreekanth Anasa]

    In its latest research report, eMarketer states that the search giant will maintain its dominance in digital ads taking in40.7% of US digital ad revenues in 2017more than double of what Facebook (NASDAQ:FB) would make. TheeMarketer research “expects Googles share of the search market to grow 16.1% to $28.55 billion in 2017. The search giant will claim roughly 78% of total US search ad revenues this year”.eMarketer forecasting analyst Monica Peart states that Google is set to benefit greatly from users’ behavioral shift to mobile search on increasing usage of smartphones. An important point to note here is that the ongoing ad fiasco is largely related toGoogle’s Display Network, where Google lags Facebook by some distance, but in that too eMarketer projectsDisplay Network revenue will rise to $5.24 billion in 2017. The above-cited research had just come recently before the YouTube ad exodus. However, as highlighted by the Morgan Stanley analyst above, the impact on the Google’s bottom line due to current ad woes could be minimal and the above estimates may not vary in a drastic way.

  • [By Evan Niu, CFA]

    Unsurprisingly, Apple has already assembled a team of experienced hardware and software engineers, while also tapping “talented outsiders,” according to the report. The team includes engineers who have worked on Facebook’s (NASDAQ:FB) Oculus Rift and Microsoft’s HoloLens. Some special effects artists from the movie industry are supposedly even in the mix. The company has also made a handful of AR-related acquisitions to accelerate its efforts, such as the 2015 purchase of AR start-up Metaio or the 2016 acquisition of spatial perception start-up Flyby, among others.

  • [By Kumar Abhishek]

    It has been a very good year for Facebook Inc (NASDAQ:FB) stock investors. The shares of eCommerce giant have delivered over 55% return this year, outperforming widely outperforming the Nasdaq Composite. Not only that, Facebook stock is also one of the best performersin the so-called’FAANG’ grouping comprising of tech giants like Apple, Amazon, Netflix and Microsoft. Only Netflix stock has performed better, that too by a slight margin.

stock trading software: MDU Resources Group, Inc.(MDU)

Advisors’ Opinion:

  • [By Lisa Levin]

    In trading on Monday, utilities shares fell by 1.08 percent. Meanwhile, top losers in the sector included South Jersey Industries Inc (NYSE: SJI), down 4 percent, and MDU Resources Group Inc (NYSE: MDU), down 4 percent.

10 Stocks to Buy for Surefire Gains in 2018 and Beyond

With everyone looking ahead now to 2018, investors are getting bombarded with ideas regarding the best stocks to buy.

Everyone has their own suggestion about which stocks are going to hit the big time in the coming months, but fear not! Here we have a list of 10 sure-fire winners that tick all the boxes. These stocks to buy are not purely subjective. Instead, they have big support from the Street’s top analysts and the upside potential to match based on the average analyst price target.

I found these stocks using a nifty Top Analyst Stocks tool on TipRanks. This pulls up stocks with bullish recent ratings from multiple top analysts. Scanning through this list, I was able to identify 10 top stocks that make compelling investing opportunities right now. Just to note, I purposefully eliminated stocks that only have big upside potential because share prices are plummeting.

With that in mind, let’s dive in and see which stocks make the cut for 2018:

Stocks to Buy: Micron (MU) Stocks to Buy: Micron (MU)investorplace.com/wp-content/uploads/2017/09/mumsn-300×165.jpg 300w, investorplace.com/wp-content/uploads/2017/09/mumsn-55×30.jpg 55w, investorplace.com/wp-content/uploads/2017/09/mumsn-200×110.jpg 200w, investorplace.com/wp-content/uploads/2017/09/mumsn-162×88.jpg 162w, investorplace.com/wp-content/uploads/2017/09/mumsn-400×220.jpg 400w, investorplace.com/wp-content/uploads/2017/09/mumsn-116×64.jpg 116w, investorplace.com/wp-content/uploads/2017/09/mumsn-100×55.jpg 100w, investorplace.com/wp-content/uploads/2017/09/mumsn-91×50.jpg 91w, investorplace.com/wp-content/uploads/2017/09/mumsn-78×43.jpg 78w,https://investorplace.com/wp-content/uploads/2017/09/mumsn-170×93.jpg 170w” sizes=”(max-width: 728px) 100vw, 728px” />Source: Shutterstock

Over the last three months, semiconductor stock Micron Technology, Inc. (NASDAQ:MU) has received a whopping 19 buy ratings and just 3 hold ratings. As a result, the stock has a ‘Strong Buy’ analyst consensus rating. These analysts believe (on average) that Micron has big upside potential of over 30% from the current share price. This would take MU from $44.12 all the way to $57.65. Bear in mind, MU has already doubled year-to-date!

Five-star Rajvindra Gill assigned a buy rating to MU with a very confident $76 price target on Dec. 20 (72% upside). He says the market is undervaluing MU and he sees serious potential in: 1) 3D NAND transition, which generates a significant cost advantage (30%-35%); and 2) technology limitations in DRAM supply growth.

“We believe investors are focusing too heavily on a NAND pricing decline to see the big picture. With another record quarter and guide (beat revenue and EPS consensus by 5.6% and 11.4%, respectively) in the bag, Micron is on track to generate quarterly EPS of nearly $2.50 or roughly $10 per share of annualized earnings” said Gill on Dec. 20.

Note that this is a top analyst worth following. He is ranked No. 43 out of over 4,700 analysts tracked by TipRanks.

Stocks to Buy: Spark Therapeutics (ONCE)

Stocks to Buy: Spark Therapeutics (ONCE)investorplace.com/wp-content/uploads/2017/08/oncemsn-300×165.jpg 300w, investorplace.com/wp-content/uploads/2017/08/oncemsn-55×30.jpg 55w, investorplace.com/wp-content/uploads/2017/08/oncemsn-200×110.jpg 200w, investorplace.com/wp-content/uploads/2017/08/oncemsn-162×88.jpg 162w, investorplace.com/wp-content/uploads/2017/08/oncemsn-400×220.jpg 400w, investorplace.com/wp-content/uploads/2017/08/oncemsn-116×64.jpg 116w, investorplace.com/wp-content/uploads/2017/08/oncemsn-100×55.jpg 100w, investorplace.com/wp-content/uploads/2017/08/oncemsn-91×50.jpg 91w, investorplace.com/wp-content/uploads/2017/08/oncemsn-78×43.jpg 78w,https://investorplace.com/wp-content/uploads/2017/08/oncemsn-170×93.jpg 170w” sizes=”(max-width: 728px) 100vw, 728px” />

Spark Therapeutic Inc’s (NASDAQ:ONCE) innovative gene therapy has just received a critical approval from the Food and Drug Administration. Excitingly, this is the first gene therapy to restore sight to individuals with a rare inherited eye disease that can cause blindness. The treatment, known as Luxturna, can treat both children and adults. Following the news, three analysts quickly reiterated their Spark buy ratings.

“Today’s approval marks another first in the field of gene therapy — both in how the therapy works and in expanding the use of gene therapy beyond the treatment of cancer,” said FDA commissioner Scott Gottlieb. “This milestone reinforces the potential of this breakthrough approach in treating a wide range of challenging diseases.”

Overall this ‘Strong Buy’ stock has a bullish average analyst price target of $73 (38% upside potential). We don’t know the drug’s price just yet, but Phil Nadeau, a top Cowen & Co analyst, says: “$500,000 per procedure is reasonable for a once-per-lifetime therapy that has the potential to be curative.”

Meanwhile, Raymond James’ Reni Benjamin notes that: “1) with no negative surprises, the label is slightly better than expected, only excluding the use of this gene therapy in infants under 12 months of age; 2) Spark also received a Rare Pediatric Disease Priority Review Voucher, which we estimate is worth approximately $125 million based on recent transactions.”

Stocks to Buy: Alcoa (AA) Stocks to Buy: Alcoa (AA)investorplace.com/wp-content/uploads/2016/06/aamsn-300×165.jpg 300w, investorplace.com/wp-content/uploads/2016/06/aamsn-55×30.jpg 55w, investorplace.com/wp-content/uploads/2016/06/aamsn-200×110.jpg 200w, investorplace.com/wp-content/uploads/2016/06/aamsn-162×88.jpg 162w, investorplace.com/wp-content/uploads/2016/06/aamsn-65×36.jpg 65w, investorplace.com/wp-content/uploads/2016/06/aamsn-100×55.jpg 100w, investorplace.com/wp-content/uploads/2016/06/aamsn-91×50.jpg 91w, investorplace.com/wp-content/uploads/2016/06/aamsn-78×43.jpg 78w, investorplace.com/wp-content/uploads/2016/06/aamsn-170×93.jpg 170w” sizes=”(max-width: 728px) 100vw, 728px” />Source: Josh Hallett via Flickr (Modified)

Pennsylvania-based Alcoa Corp (NYSE:AA) is the world’s sixth largest producer of aluminum with locations all over the world. The stock is catching the attention of investors following a bullish upgrade from Credit Suisse. On Dec. 20, five-star Credit Suisse analyst Curt Woodworth ramped up his price target from $42 to $61. This now suggests 22% upside potential from the current price. Woodworth is anticipating that tighter aluminum supply will push up prices due to alumina and bauxite closures.

“We note three smelters curtailed production last week, and the government is set to sharply increase inspections in January. We expect the aluminum market to tighten into late 1Q-18 as downstream demand sharply recovers.” Plus, China’s increased commitment to environmental policy will further curtail supply according to Woodworth.

Overall, AA has a ‘Strong Buy’ rating, with only buy ratings from top analysts in the last three months. At the same time, the average analyst price target of $60 stands at 20% upside from the current share price.

Stocks to Buy: MasTec (MTZ) Stocks to Buy: MasTec (MTZ)investorplace.com/wp-content/uploads/2017/01/mtzmsn-300×165.jpg 300w, investorplace.com/wp-content/uploads/2017/01/mtzmsn-55×30.jpg 55w, investorplace.com/wp-content/uploads/2017/01/mtzmsn-200×110.jpg 200w, investorplace.com/wp-content/uploads/2017/01/mtzmsn-162×88.jpg 162w, investorplace.com/wp-content/uploads/2017/01/mtzmsn-400×220.jpg 400w, investorplace.com/wp-content/uploads/2017/01/mtzmsn-116×64.jpg 116w, investorplace.com/wp-content/uploads/2017/01/mtzmsn-100×55.jpg 100w, investorplace.com/wp-content/uploads/2017/01/mtzmsn-91×50.jpg 91w, investorplace.com/wp-content/uploads/2017/01/mtzmsn-78×43.jpg 78w,https://investorplace.com/wp-content/uploads/2017/01/mtzmsn-170×93.jpg 170w” sizes=”(max-width: 728px) 100vw, 728px” />Source: Shutterstock

Keep a close eye on Florida-based specialty contractor engineer MasTec, Inc. (NYSE:MTZ) in 2018. The company’s work spans electric power infrastructure, oil and natural gas pipelines, renewable energy facilities and wireless networks. Strength across the board has resulted in 100% Street support with seven analysts publishing recent buy ratings. Indeed, MTZ has received no hold or sell ratings from the Street for over 8 months.

“We reiterate a BUY on MTZ ahead of what we expect to be increasing 2018 estimates and an expanding multiple. With all segments poised for growth in 2018, a more diversified positive top line performance is likely to be enhanced on the bottom line by better Oil and Gas margins and a generally improving pricing and mix environment from large projects” writes top Canaccord Genuity analyst Robert Burleson. His buy rating comes with a $58 price tag (15% upside). We can also see that he has an incredible track record on his MTZ ratings with a 100% success rate and 51.6% average return.

Stocks to Buy: TherapeuticsMD (TXMD) Stocks to Buy: TherapeuticsMD (TXMD)investorplace.com/wp-content/uploads/2017/12/txmdmsn-300×165.jpg 300w, investorplace.com/wp-content/uploads/2017/12/txmdmsn-55×30.jpg 55w, investorplace.com/wp-content/uploads/2017/12/txmdmsn-200×110.jpg 200w, investorplace.com/wp-content/uploads/2017/12/txmdmsn-162×88.jpg 162w, investorplace.com/wp-content/uploads/2017/12/txmdmsn-400×220.jpg 400w, investorplace.com/wp-content/uploads/2017/12/txmdmsn-116×64.jpg 116w, investorplace.com/wp-content/uploads/2017/12/txmdmsn-100×55.jpg 100w, investorplace.com/wp-content/uploads/2017/12/txmdmsn-91×50.jpg 91w, investorplace.com/wp-content/uploads/2017/12/txmdmsn-78×43.jpg 78w,https://investorplace.com/wp-content/uploads/2017/12/txmdmsn-170×93.jpg 170w” sizes=”(max-width: 728px) 100vw, 728px” />Source: Shutterstock

I have already banged on about TherapeuticsMD Inc (NASDAQ:TXMD) in my recent piece on top healthcare stocks. But this is an intriguing stock pick that I felt was worth including again. TXMD is a unique biotech making waves in the world of female healthcare. The company develops and commercializes products exclusively for women. Its lead product candidate is the TX-004 soft gel capsule for post-menopausal pain. This approach clearly has the backing of the Street, as TXMD has a Strong Buy analyst consensus rating.

In fact, in the last three months, TherapeuticsMD has received seven back-to-back buy ratings. Plus the $15.30 average analyst price target represents a huge 161% upside from the $6 current share price. Crucially, even the lowest price target of $9 from Noble Financial and Deutsche Bank still suggests 55% upside potential.

The most bullish analyst of the pack is top Cantor Fitzgerald analyst William Tanner. He reiterated his TXMD buy rating on Dec. 19 with a $28 price target. Tanner notes that the FDA has opted to conduct a longer Class 2 review of TX-004. But ultimately, he calls the drug ‘an important new therapy’ for atrophy. He says: “We believe the likelihood of approval is high, 85% probability, the highest we use to account for some revenue forecasting uncertainty.”

Stocks to Buy: Amazon (AMZN) Stocks to Buy: Amazon (AMZN)investorplace.com/wp-content/uploads/2016/05/amznmsn2-300×165.jpg 300w, investorplace.com/wp-content/uploads/2016/05/amznmsn2-55×30.jpg 55w, investorplace.com/wp-content/uploads/2016/05/amznmsn2-200×110.jpg 200w, investorplace.com/wp-content/uploads/2016/05/amznmsn2-162×88.jpg 162w, investorplace.com/wp-content/uploads/2016/05/amznmsn2-65×36.jpg 65w, investorplace.com/wp-content/uploads/2016/05/amznmsn2-100×55.jpg 100w, investorplace.com/wp-content/uploads/2016/05/amznmsn2-91×50.jpg 91w, investorplace.com/wp-content/uploads/2016/05/amznmsn2-78×43.jpg 78w, investorplace.com/wp-content/uploads/2016/05/amznmsn2-170×93.jpg 170w” sizes=”(max-width: 728px)100vw, 728px” />Source: Mike Seyfang via Flickr

Year-to-date Amazon.com, Inc. (NASDAQ:AMZN) has already soared by 56%. But even with shares at $1,176, we can see that the Street still sees AMZN spiking over 11% to $1,311. In fact, in the last three months this stock has received an eyebrow-raising 33 buy ratings vs. just one hold rating.

The most recent rating comes from top RBC Capital analyst Mark Mahaney. He has just carried out a survey on Amazon’s intelligent personal assistant Alexa. And he likes what he sees. “Following our third annual Alexa survey, we are more impressed with the traction of these devices and more convinced of their potential long-term impact. With tens of millions of users and 20K+ skills, we see Alexa’s value prop as becoming increasingly powerful as awareness and ownership ramp. We think AMZN could see $10-$11B in Alexa-related Rev by 2020.”

In fact, recent reports suggest Alexa made a popular holiday gift. On Christmas Day, Amazon’s Alexa app took the No. 1 spots on both the U.S. Google Play and iPhone App Stores’ free app charts.

Stocks to Buy: Comcast (CMCSA) Stocks to Buy: Comcast (CMCSA)investorplace.com/wp-content/uploads/2016/09/cmcsamsn-300×165.jpg 300w, investorplace.com/wp-content/uploads/2016/09/cmcsamsn-55×30.jpg 55w, investorplace.com/wp-content/uploads/2016/09/cmcsamsn-200×110.jpg 200w, investorplace.com/wp-content/uploads/2016/09/cmcsamsn-162×88.jpg 162w, investorplace.com/wp-content/uploads/2016/09/cmcsamsn-65×36.jpg 65w, investorplace.com/wp-content/uploads/2016/09/cmcsamsn-100×55.jpg 100w, investorplace.com/wp-content/uploads/2016/09/cmcsamsn-91×50.jpg 91w, investorplace.com/wp-content/uploads/2016/09/cmcsamsn-78×43.jpg 78w, investorplace.com/wp-content/uploads/2016/09/cmcsamsn-170×93.jpg 170w” sizes=”(max-width: 728px)100vw, 728px” />Source: Mike Mozart via Flickr

The cable sector has been down in the dumps, but it is now looking for a comeback in 2018. And there is one company that stands out in particular: mass media king Comcast Corporation (NASDAQ:CMCSA). In the last three months, Comcast scores 10 out of 10, with 10 consecutive buy ratings from the Street. These analysts have an average price target of $45- 10% upside from the current share price.

Top Pivotal Research analyst Jeffrey Wlodarczak is confident that the stock is setup for a solid 2018. On Dec. 19, he told investors: “Recall, our belief that the cable malaise would be winding down by year-end ’17 and we continue to believe that this is the case. Comcast management’s data guidance raise in 4Q, implied material acceleration in capital returns and ’18 cable EBITDA margin expansion helped alleviate these investor fears.”

Plus, he believes that “the elimination of net neutrality laws, which effectively gave regulatory cover for video/phone competitors to freely use the cable plant, should also help with monetization.” His $50 price target translates into 22% upside potential.

Stocks to Buy: Smart Global Holdings (SGH) Stocks to Buy: Smart Global Holdings (SGH)investorplace.com/wp-content/uploads/2017/12/SGHmsn-300×150.jpg 300w, investorplace.com/wp-content/uploads/2017/12/SGHmsn-768×384.jpg 768w, investorplace.com/wp-content/uploads/2017/12/SGHmsn-60×30.jpg 60w, investorplace.com/wp-content/uploads/2017/12/SGHmsn-200×100.jpg 200w, investorplace.com/wp-content/uploads/2017/12/SGHmsn-400×200.jpg 400w, investorplace.com/wp-content/uploads/2017/12/SGHmsn-116×58.jpg 116w, investorplace.com/wp-content/uploads/2017/12/SGHmsn-100×50.jpg 100w, investorplace.com/wp-content/uploads/2017/12/SGHmsn-78×39.jpg 78w, investorplace.com/wp-content/uploads/2017/12/SGHmsn-800×400.jpg 800w,https://investorplace.com/wp-content/uploads/2017/12/SGHmsn-170×85.jpg 170w” sizes=”(max-width: 950px) 100vw, 950px” />Source: Shutterstock

SGH is a global leader in specialty memory, storage and hybrid solutions for the electronics industry for over 25 years. On the back of a strong beat and raise quarter, three analysts reiterated their Smart Global Holdings Inc (NASDAQ:SGH) buy ratings on Dec. 22. Shares popped 10% on the news. And now these analysts say shares can move another 25% from the current share price to hit $43.

SGH CEO Iain MacKenzie commented that the company enjoyed “strength across the board.” Revenue, gross margin and earnings-per-share all exceeded the high ends of previous guidance. He now has even higher hopes for the coming quarters, due to Brazil and the improving global memory market. Indeed, current strength in Brazil is expected to continue throughout the year as the economy recovers.

Stocks to Buy: Aerie Pharmaceuticals (AERI) Stocks to Buy: Aerie Pharmaceuticals (AERI)investorplace.com/wp-content/uploads/2017/07/biotechmsn-300×165.jpg 300w, investorplace.com/wp-content/uploads/2017/07/biotechmsn-55×30.jpg 55w, investorplace.com/wp-content/uploads/2017/07/biotechmsn-200×110.jpg 200w, investorplace.com/wp-content/uploads/2017/07/biotechmsn-162×88.jpg 162w, investorplace.com/wp-content/uploads/2017/07/biotechmsn-400×220.jpg 400w, investorplace.com/wp-content/uploads/2017/07/biotechmsn-116×64.jpg 116w, investorplace.com/wp-content/uploads/2017/07/biotechmsn-100×55.jpg 100w, investorplace.com/wp-content/uploads/2017/07/biotechmsn-91×50.jpg 91w,https://investorplace.com/wp-content/uploads/2017/07/biotechmsn-78×43.jpg 78w, investorplace.com/wp-content/uploads/2017/07/biotechmsn-170×93.jpg 170w” sizes=”(max-width: 728px) 100vw, 728px” />Source: Shutterstock

Eye disease pharma Aerie Pharmaceuticals Inc (NASDAQ:AERI) received an early holiday gift from the FDA. The US regulatory body has just approved Aerie’s lead product Rhopressa two months ahead of schedule. Aerie is now set to hire a 100-person strong sales force in preparation for launch in 2Q18.

“The FDA has approved Aerie’s Rhopressa drug for the treatment of patients with open angle glaucoma or ocular hypertension. We see this announcement as a positive for the company and also a positive read-through for the potential upcoming approval of Roclatan in 2019,” writes five-star Mizuho analyst Difei Yang.

Intriguingly, she also adds: The approval of Rhopressa reinforces our view that Aerie Pharmaceuticals is a strong takeout candidate.” Yang has an $87 price target on the stock and a very strong AERI track record (86% success rate and 73% average return).

Overall, AERI boasts 100% Street support with 7 buy ratings in the last three months. These analysts believe (on average) that AERI can leap a further 32% in the coming months.

Stocks to Buy: Facebook (FB) Stocks to Buy: Facebook (FB)investorplace.com/wp-content/uploads/2017/11/fbmsn-300×150.jpg 300w, investorplace.com/wp-content/uploads/2017/11/fbmsn-768×384.jpg 768w, investorplace.com/wp-content/uploads/2017/11/fbmsn-60×30.jpg 60w, investorplace.com/wp-content/uploads/2017/11/fbmsn-200×100.jpg 200w, investorplace.com/wp-content/uploads/2017/11/fbmsn-400×200.jpg 400w, investorplace.com/wp-content/uploads/2017/11/fbmsn-116×58.jpg 116w, investorplace.com/wp-content/uploads/2017/11/fbmsn-100×50.jpg 100w, investorplace.com/wp-content/uploads/2017/11/fbmsn-78×39.jpg 78w, investorplace.com/wp-content/uploads/2017/11/fbmsn-800×400.jpg 800w,https://investorplace.com/wp-content/uploads/2017/11/fbmsn-170×85.jpg 170w” sizes=”(max-width: 950px) 100vw, 950px” />Source: Shutterstock

Social media giant Facebook Inc (NASDAQ:FB) has a big catalyst heading its way for 2018. The company has already premiered its ‘Watch’ tab, but 2018 could be the year where it really takes off. (Of course, this is on top of all the stock’s other catalysts like Instagram, WhatsApp and a new Direct messaging app.)

One of TipRanks’ top 100 analysts, Brent Thrill, believes the ‘Watch’ tab is about to make a sizeable impact on user video consumption. He says the tab will drive video engagement alongside improved network effects and sharing. Plus, Facebook’s data-driven approach to content and partner revenue share agreements is the smart way to go. He is now looking for revenue purely from the Watch tab to hit $12 billion in 2022. Thrill’s $225 price target suggests considerable upside of 27% from the current share price.

Strong Buy stock FB has scored 30 buy ratings and just 1 sell rating in the last three months. Meanwhile, the average analyst price target of $210 indicates 19% upside potential.

TipRanks offers investors the latest insight into eight different sectors by tracking the activity of 4,700 analysts, 5,000 financial bloggers and even 37,000 corporate insiders. As of this writing, Harriet Lefton did not hold a position in any of the aforementioned securities.

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U.S. Concrete – Financially And Geographically Positioned For Growth

U.S. Concrete (USCR) is situated in the top position of each major market where they supply Ready-Mix and Aggregate concrete supplies. USCR currently services the fastest growing residential, commercial, and infrastructural real estate markets in the U.S. They provide their patented quick drying and eco-friendly mix of concrete to markets such as New York City, Dallas-Fort Worth, and the San Francisco Bay area. U.S. Concrete has agreed to contracts with high-margin commercial companies such as Google (NASDAQ:GOOG), FaceBook (NASDAQ:FB), and Toyota (NYSE:TM), as well as LaGuardia International Airport. Their current strategy of organic and acquisition growth, combined with their high-profile project outlay, shows that USCR has positioned itself for major growth as 2018 approaches. Using my pro forma valuation, the one-year price target is just under $105.

Recent Earnings Performance

U.S. Concrete currently sits slightly above the trends of the Construction Materials and Products Sector Index. However, that does not tell the whole story. I am not suggesting that readers buy the index; rather, I’m suggesting a buy that, within the year, will outperform the index significantly. Despite a dip in Q3 performance due to two major acquisitions, inclement weather, and the effects of three major Hurricanes, USCR was able to increase consolidated revenue 7.9% year over year, to $354.6M. Total revenue increased 18% to $1.313B, and the total adjusted EBITDA increased 1.3% to $54.7M.

The reason behind USCR’s success is the position they hold in the fastest growing commercial, residential and industrial real estate markets in the country. USCR has agreed to be the top supplier to commercial projects with high margins, such as Facebook Data Center in Fort Worth, LaGuardia Airport in Queens, and Google’s Bayview Campus in Mountain View, Calif. Due to these contracts and the positive outlook the industrial sector has seen under the Trump administration, there is an extremely positive attitude for current and future revenue and margin growth.

Industry Outlook

U.S. Concrete is well positioned in the construction products industry because of the markets that they currently serve. USCR is an industry-leading ready-mixed concrete and aggregate supplier in the New York metropolitan, Dallas Fort Worth, and San Francisco markets. These three metropolitan areas are some of the fastest growing industrial and residential areas in the country. Due to USCR’s specific regional dominance, they have a large competitive advantage in their industry.

Additionally, USCR has the ability to provide a superior ready-mixed concrete that uses their EF and Aridus Technology to allow a stronger, quicker drying, and eco-friendly product. Because USCR offers a superior product than its competitors, they have the ability to sell their ready-mixed concrete at a premium price of $136.62 per cubic yard vs. the industry average of $107.17.

Source: USCR Investor Presentation Slides

U.S. Concrete has utilized vertical integration approach in order to increase their margins and return on capital. Although they are second to Vulcan Materials (VMC) in aggregate ownership, USCR’s recent acquisitions have allowed them to increase their internal aggregate sourcing, helping to reduce costs and improve margins.

Segment Analysis

U.S. Concrete focuses on two key segments, Ready-Mix Concrete and Aggregate supplies. USCR’s Ready-Mix segment has seen its 26th straight quarter of year over year growth, and its backlog has grown 7.7% since the beginning of 2017. The outlook for Ready-Mix is extremely positive considering that the construction spending is estimated to outpace the national average for the next 18 months in San Francisco, Dallas-Ft. Worth, and the five boroughs of New York. Compared to 2016 the Ready-Mix sales volume has grown 13.9% to 8.91 million cubic yards. The Ready-Mix segment should see continued growth due to their market position in the New York Metro area that has just passed a $32 billion budget to increase infrastructure spending that highlights U.S. Concrete as the main Ready-Mix supplier.

Currently, USCR is the main supplier for World Trade Center Construction (400,000 cubic yards), Hudson Yards (375,000 cubic yards), LaGuardia Airport (375,000 cubic yards), the Goethals Bridge (80,000 cubic yards), the Tappan Zee Bridge (~45,000 cubic yards), and the Bayonne Bridge (40,000 cubic yards). The Aggregate segment took a bit of a dip in 2017 due to the inclement weather and three major hurricanes that shut down a quarry. It was expected that sales volume would decrease, and it did by 5.8% in quarter three. However, the rise in Aggregate price by 2.7% to $12.25 somewhat offset the dip in sales. Overall, the year over year revenue increased 18% to $1.313B despite the shortcomings in Aggregates.

Acquisition Growth

U.S. Concrete is constantly looking for ways to expand their robust plant layout. They are no strangers to acquisitions, and have recently locked in a deal with Polaris Materials located in British Columbia to be approved on Nov. 15th. USCR also acquired Action Supply located in Philadelphia, which has the potential to infiltrate a new market, but really offers the ability to synergize their recently acquired Corbett Aggregates Companies in New Jersey.

The main focus for their acquisitions are companies that produce Aggregates. Aggregates provide roughly 6.5% of revenue, but allow USCR to vertically integrate their internal production. The ability to vertically integrate allows USCR to reduce costs by limiting the need to purchase from the open market. USCR currently sources roughly 1/3 of their Aggregates internally, but the acquisition of Polaris is estimated to increase their Aggregate production significantly. Estimates project the ability to produce nearly double the amount of internal Aggregate sourcing.

CEO Bill Sandbrook said that the Polaris deal will provide the company with more Aggregate reserves that will help the company’s strategic operations in northern California markets. Additionally, Polaris currently operates in Long Beach, Calif., which could potentially allow U.S. Concrete to expand into the Los Angles market. USCR is able to finance their acquisitions through long-term debt. The book value of long-term debt is $688.4M, and $610.3M is due in 2024. However, due to the organic acquisitions, the steady increase in revenues and the limitation of costs, long-term debt is not a significant liability.

Competitors

Although U.S. Concrete might be small in regard to market capitalization when compared to its competitors, they make up for it in the contracts that they have with large commercial companies, as well as the markets in which they operate. USCR significantly beats their competitors in return on equity and return on assets, due to their contracts with high margin companies. Their adjusted EBITDA is steadily growing, but is limited due to their acquisition costs that they finance in part by revenue (the majority is long-term debt). Considering USCR’s market capitalization is much smaller than its nearest competitor, their EBITDA is comparable to the median in terms of size.

Source: Bloomberg

USCR’s gross margin is slightly below the median, however this should rise as the budget for spending in the New York Metro area has been set at $32B over the next 10 years. Most importantly, USCR’s revenue is slightly below the median; however, it is greater than Ash Grove Cement Co., and is slightly trailing Summit Materials (SUM). Both of these competitors are nearly three times the size of USCR, but generate comparable revenues. It is important to consider the types of projects that USCR is undertaking as well as the projects in their backlog.

Risks

Along with it’s competitors, USCR is concerned with the volatility of oil prices as well as the uncertainty of Trump’s $1 trillion infrastructure spending executive order. USCR is also faced with paying off short-term liabilities that might put a stress on their cash on hand. However, with their recent acquisition and revenue growth, there shouldn’t be an overexaggerated concern here.

Conclusion

USCR is well-positioned in their primary markets of New York Metro, Dallas-Fort Worth, and San Francisco Bay. USCR has constantly managed to grow its revenue and number of high margin projects because of their organic and acquisition growth strategy. USCR will continue to benefit from an increase in infrastructure spending while decreasing their costs by improving vertical integration. They have industry-leading return on assets and return on equity, although they have the smallest capital expenditure compared to competitors. I believe that a one-year target return of 22% is extremely achievable for USCR.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

About this article:ExpandAuthor payment: $35 + $0.01/page view. Authors of PRO articles receive a minimum guaranteed payment of $150-500.Tagged: Investing Ideas, Long Ideas, Industrial Goods, General Building MaterialsWant to share your opinion on this article? Add a comment.Disagree with this article? Submit your own.To report a factual error in this article, click here