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Each month, we ask our freelance writers to share the top US stocks with investors – here’s what you want to buy in January!
[Just beginning your investing journey? Check out our guide on how to start investing in the UK.]
Amazon
What we do: Amazon is the largest e-commerce company in the world. It is also a major player in cloud computing.
By Edward Sheldon, CFA. Amazon (NASDAQ: AMZN ) shares fell sharply in 2022 and are now back at pre-pandemic levels. I think this is a great buying opportunity for me.
I do not expect explosive returns from the stock in the near term. With interest rates still rising, it’s not the best environment for an expensive growth stock like Amazon right now.
However, in the long run, I think the stock has higher potential. Not only seems to enjoy the tailwinds of the expansion of the online shopping industry, but also seems to benefit from the growth of several other industries including cloud computing, video streaming, digital advertising, digital health, self-driving. cars (having Zoox), and artificial intelligence.
So, I think building a position in the stock now – while it’s still a long way off – is a smart move for me.
Edward Sheldon has a position at Amazon.
Intuitive surgery
What he did. Intuition Surgery is a world-renowned designer and manufacturer of robotic surgical machines for minimally invasive treatments.
By Zaven Boyrazian. Medical technology is developing rapidly. And one of the most exciting areas, in my opinion, is robot-assisted surgery.
While still an expensive procedure, the patient’s risk is reduced, as is the recovery time. and Intuitive surgery (NASDAQ:ISRG) controls around 80% of the global market share with da Vinci systems!
Today, more than 7,000 da Vinci machines are deployed worldwide, with more than 60,000 surgeons trained to use them. But selling the device isn’t what drives cash flow. However, recurring purchases of consumable products are required to use this machine, such as scalpels.
This razor-and-blade business model has generated ever-growing cash flow for investors. And it’s a trend that continues to increase. On a value basis, it is definitely not a cheap stock. And that opens the door to share price volatility. But because of its monopoly-like status, the premium I feel is worth paying.
Zaven Boyrazian has a position in Intuitive Surgery.
Kraft Heinz
What we do: Kraft Heinz is a food and beverage producer with eight brands with annual sales of $1 billion or more.
By Royston Wild. Kraft Heinz (NASDAQ:KHC) is one of legendary investor Warren Buffett’s favorite stocks. In fact he is Berkshire Hathaway The investment company owns more than a quarter of the food and beverage producer’s shares.
I think this is the best US stock to own in this uncertain economic climate. This is because various popular brands like Heinz Ketchup gravy, Philadelphia spreadable cheese and Oscar Mayer hot dog.
The label has been around for decades. And as a result customers remain very loyal to them, even though their spending power has decreased. This provides Kraft Heinz with exceptional earnings stability at all points of the economic cycle.
In fact, this brand loyalty allows businesses to raise prices without significant volume loss. This means it can confidently and effectively pass on the cost of increases to consumers.
Indeed, Kraft Heinz’s net sales rose 3% (to $6.5bn) in the three months to September. This was due to a 15.4% increase in prices that offset a 3.8% decrease in the volume sold.
Royston Wild has no position in Kraft Heinz or Berkshire Hathaway.
PayPal
What we do: PayPal is a fintech company that operates a payment system that supports online money transfers, and is an electronic alternative to traditional paper methods.
By John Choong. PayPal (NASDAQ: PYPL) stock may be off at an all-time high of $308, but the stock price now presents a lot of upside, which is why I’m planning to buy more in the coming days. Here is the reason.
After the first warning of the slow holiday season, fears of a slowdown in spending were arguably rebuffed in the latest Black Friday and Cyber Mondays figures, which PayPal is expected to benefit from, given that the majority of these transactions take place online. In fact, spending for the current holiday season is predicted to reach a record $209.7bn.
With the fintech firm also looking to cut costs in the new year, and expand its user base with better functionality and synergies across multiple entities such as Honey and Buy Now Pay Later, analysts now expect the stock to reach $108 next year. year. And with the stock currently trading below that, with a PEG ratio of 0.3, expanding my position in the stock just doesn’t make sense.
John Choong has a position in PayPal.
Axon Company
What we do: Axon Enterprise develops software and non-lethal weapons for law enforcement, the military, and civilians.
By Ben McPoland. Axon Company (NASDAQ: AXON) was formerly known as TASER International. It still sells legacy electroshock weapons, but the company’s additional technology products now span the entire law enforcement ecosystem.
For example, the ubiquitous in-vehicle and body cameras are supported by a digital evidence platform (called Evidence.com). Captured evidence is immediately uploaded to this cloud-based platform, where it can be stored, retrieved, managed, transferred, and shared.
That’s what makes this high-margin subscription platform so sticky. Net revenue retention is very strong at 120%. That means keeping all your customers and spending more.
Axon has expanded its customer base to include fire departments, paramedics, prisons, and various federal agencies. And it has since entered the vast Indian and Brazilian law enforcement markets.
One risk is that the company’s total dominance in the industry attracts the attention of regulators. However, companies with no real competition usually make neat investments.
Ben McPoland has a position at Axon Enterprise.
Alphabet
What it does: Alphabet is the parent company of Google and owns other online properties, including Youtube.
By Christopher Ruane. 2022 has seen a distinct cooling in investor enthusiasm for Alphabet (NASDAQ: GOOG). The online giant has seen its stock drop 37% over the past 12 months.
Part of the reason is the negative impact that advertising will have on the company’s earnings. While profits in the third quarter rose 6% compared to the same period last year, net income was 26% lower.
I think it could get worse because the advertising market seems far from ready to return to growth. However, as a long-term investor, I see Alphabet’s current share price as a portfolio buying opportunity if I have spare funds to invest.
The company generates huge profits and has a large customer base. It benefits from economies of scale that make it difficult for new market entrants to even think about trying to compete.
Christopher Ruane has no position at Alphabet.
McDonald’s
What it does: operating in more than 100 countries, McDonald’s is the world’s largest restaurant chain by revenue – and home to the Big Mac.
By Paul Summers. As I have taken advantage of the big sell-off in US tech stocks this year, I understand the need to stay sector-diversified. Invest in fast food giants McDonald’s (NYSE: MCD ) is one way to balance that.
The company has generated the best returns for investors over the long term due to its resilient brand and business model.
It is also a great source of income in times of inflation. When the price increases, the company will take a larger fee for all product sales by the franchisee. That’s pretty good considering the dire predictions for 2023 offered by some economists.
Of course, the defensive qualities of McDonald’s have not been noticed by the market. As a result, the stock is unlikely to disappear in 2022 and is not cheap to buy.
Still, as a stable and recession-proof stock, McDonald’s was the top spot in the US to buy in January.
Paul Summers has no position in McDonald’s Corp.
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