There are two commonly used ways of picking excellent stocks; one is the top earning companies, and the other is to pick a stock with a great upside because it is undervalued. Given the state of energy sector, the rapid expansion of mobile devices and computing, and rapid advances in medical care, it is not surprising that some of the high-profit companies are in airlines, communications and pharmaceuticals. However, it is somewhat surprising to find undervalued stocks in these areas. A depressed stock in a growth sector is a powerful combination that attracts investors. The below-described stocks are a mix of high performers and overlooked issuers.
Global Air Travel
Alaska Air Group is a top rated financial condition and on the basis of lower fuel costs this regional workhorse will have a strong fist quarter in 2015. Normally the weakest time of the year, a strong first quarter bodes well for the year. With kerosene prices at a remarkable low, the airline will enjoy its regional dominance and have a profitable prospect for the year. The stock has not responded to the fuel advantage and with strong earnings the stock should rise. Precision Castparts is not an airline, but it makes it possible for them to fly. This manufacturer has a niche in the jet engine parts area. It will help build the next generations of Airbus and Boeing 767. With business and profits rising in air travel, the airlines are eager to modernize and build. This stock fell recently by about 15 percent on reports of lower than expected earnings. Analysts feel the stock is under-appreciated given the prospects for growth in 2015.
Pharmaceuticals Will Rise
Abbott Labs is an excellent choice in the pharmaceuticals sector. They recently sold off their international generics line for $5 billion and have shifted focus to emerging markets. Gilead Sciences has developed newly approved medicines for Hepatitis C and HIV. Coming off a year of strong earnings. Analysts have predicted the profit range for 2015 in the twenty percent range. The stock trades at a short multiple of the earnings; many analysts consider it a stock with a modest price and a significant upside.
Apple set a record $18 billion third quarter in 2014. They were boosted by 72 million iPhones sold, mostly in Europe, the U.S. and China. They probably cannot duplicate that feat and the China market is not close to saturation. Apple has shown time and again that they can roll out new products and score incredible levels of sales. The next great Apple toy may be a wearable computer, and mobile device. Google has grown by about twenty percent per year in recent years and showed no signs of fading. With online search and advertising as its base, Google is a global entity. The stock is not undervalued; it has a reasonable relationship to earnings. The ideal investment for those seeking capital and equity growth, it is featured in a number of leading mutual funds. As an island in a noisy sea, Google is a tranquil place for investors.
Eye for the Future
General Motors has endured some rough sailing with record numbers of recalls, lots of litigation, and having to allay some doubts about its product development. One area that is not in dispute is the imminent conversion of driving habits worldwide from gasoline power to electric power. Given the sovereign commitments to climate change, the gas burning automobile is a great target for conversion to an environmentally friendly benign mode of travel. GM has introduced its concept-car for a 200 mile electric cruising range vehicle, and they plan to take it to the market in 2017. It may be enough to set the stock in motion that will move with the success of the mass market electric vehicle.