Longer Term Equities for 2019... top 10 by one view

20th January 2019

Ranked from Least to Most Desirable as Buys

10. Facebook (NASDAQ: FB): $382.8 billion market cap, down 25.1% over the past year.

There's a surprising bull for the out-of-favor social networking giant. Andrew Left at Citron Research is calling Facebook his S&P 500 stock of the year for 2019, high praise coming from someone who usually makes waves when he's bashing a company. Left argues that the scandal-riddled dot-com is still growing. His price target of $160 suggests 20% of upside for a stock that's shed a lot more than that over the past year. 

9. JPMorgan Chase (NYSE: JPM) (down from 8): $322 billion, down 10.2%.

JPMorgan Chase has had to make a lot of withdrawals this past week. It announced on Wednesday that it will pay $135 million to settle charges of improper handling of pre-released American depositary receipts (ADRs). Turns out the company was issuing shares before it had the foreign shares required to support the new ADRs. Later in the week, Bloomberg reported that Hong Kong regulators were fining JPMorgan Chase $1.6 million for failing to keep up with anti-money laundering and counter-terrorist financing laws. 

8. Johnson & Johnson (NYSE: JNJ): $341.3 billion, down 9.5%.

The pharmaceuticals and consumer-goods giant has fallen lately on claims that its baby powder contained unacceptable levels of asbestos, and at least one financial publication thinks the stock is due to bounce back. Barron's argued last weekend that the sell-off was overdone, even if the conclusion is that there are more deeply discounted healthcare stocks for investors to go after at this point. The stock declined slightly over the past week, so it seems the market disagrees about an overdone sell-off.

7. Pfizer (NYSE: PFE) (up from 9): $248.3 billion, up 18.1%.

Bucking the trend at Johnson & Johnson, Pfizer shares inched higher for the week. There continues to be a flight to quality when it comes to pharmaceutical giants, and Pfizer is one of the beneficiaries of that trend. There are a dozen stocks commanding greater market caps than Pfizer, but it continues to make the cut in the top 10 with its double-digit percentage return over the past year.

6. Visa (NYSE: V): $288.6 billion, up 14.5%.

The leading credit card company is doing some year-end shopping. A Visa subsidiary has agreed to pay roughly $250 million for Earthport, a Europe-based provider of cross-border payment services to banks and businesses. 

5. Berkshire Hathaway (NYSE: BRK-A): $497.2 billion, up 1.1%.

Berkshire Hathaway's market cap continues to clock in below $500 billion, and with nearly $100 billion in cash on its balance sheet, one has to wonder if Warren Buffett will be a buyer in early 2019. The opportunities are there, particularly for the financial services companies that have become a staple of Berkshire Hathaway's stock portfolio.    

4. Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL): $724.6 billion, down 0.9%.

Google parent Alphabet has never found its way into the top three in this weekly list. The same three names have been jockeying around for position, with Alphabet settling for fourth or fifth place. But that may be starting to change. Alphabet's market cap passed Amazon's this past week, and its performance has held up better than Apple. The gap is closing between Alphabet and the Big Three. 

3. Apple (NASDAQ: AAPL): $741.4 billion, down 8.7%.

There's an iPhone problem at Apple, which is a big deal since the iconic smartphone accounts for the lion's share of its business. Apple has responded to sluggish sales for its new iPhone XS and XR models by rolling out a promotional upgrade program for stateside customers, and now it's apparently expanding the offer overseas. Wall Street is paying attention. Citi is the latest to hose down its forecast for Apple's iPhone production, slashing its target for the current quarter by 5 million devices. 

2. Amazon.com: 722.7 billion, up 24.6%.

We already know Amazon did a lot of selling this season, but it also seems the leading online retailer may be working on a buying spree of its own. The Wall Street Journal reports that Amazon may be bidding on YES, the Yankee Entertainment Sports Network that serves as the regional sports broadcaster for New York Yankees and Brooklyn Nets games. Another report argues that Amazon could make a play for Henry Schein (NASDAQ: HSIC), now that the dental-products distributor has unloaded its animal-health business. Either play may seem outlandish at first glance, but Amazon has a history of making unexpected moves. 

1. Microsoft (NASDAQ: MSFT): $770.7 billion, up 17.1%.

The final ranking of 2018 finds Microsoft still on top. It commands a much larger market cap than Apple, and unlike Apple it has also beaten the market over the past year. The software giant is positioned nicely as we head into 2019, but no company can stay on top forever. So far over the past two months, we saw Apple and Amazon on top before Microsoft claimed the pole position.  

And………… this company has a long term belief in the use of brains. Doesn’t always get there but when it does returns are remarkable.

Wells Fargo (NYSE: WFC) is hoping to put an ugly chapter to rest. The banking giant announced on Friday that it will pay $575 million to settle civil cases with all 50 state attorneys general. Wells Fargo was cited for aggressive sales practices in which employees were encouraged to open new accounts that existing clients never requested. Wells Fargo's reputation has taken a hit in the past couple of years, but it's hoping to get back on track. As part of the settlement, Wells Fargo will maintain designated teams to review customer inquiries and offer existing remediation efforts online. 

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