In just a few weeks, markets will end the third quarter — a back-to-school time if ever there was one, because what was true in 2015 has turned false in 2016. Or, if you prefer: For some investments, the thrill is gone and the chill’s hit home.
And if you’re hoping at least the rest of the year will be smooth sailing with that portfolio crystal ball of yours, hold on, hang tight and hide your head. One of the wildest presidential elections on record promises to rock the stock market in ways to defy even the most self-assured pundit.
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Still, some stocks have tilted one way or the other enough to maintain their trajectories in the face of election year headwinds. Here we present seven stocks ripe for rating on the hot-or-not scale.
Oneok (OKE): Cooking with gas. It’s uncertain when the energy sector will rebound and by how much. But Oneok is already lighting a profit flame. Based in Tulsa, Oklahoma, this natural gas company has seen its stock catapult more than 80 percent since January, and trades at $45 per share. Oneok has benefited from a jump-start in one key energy sub-sector, oil and gas storage and transportation. “This group has gained 33.7 percent in value on a year-to-date basis,” says Andrew Birstingl, research analyst at FactSet Research Systems in the greater New York City area.
Netflix (NFLX): A chilly stream. Think back to 2015, when Netflix dominated, finishing the year up 130 percent. Investors got giddy as experts predicted the demise of cable, due to consumers “cutting the cord” for streaming services. But 2016 has been an opposite story for the House Reed Hastings Built. NFLX has tumbled close to 30 percent since December and nagging questions remain as to how Netflix will build its subscriber base. Nor did it help when rumors of an investment by Alibaba Group Holding (BABA) were quashed earlier this month.
McDonald’s Corp. (MCD): Fire up the grill. “MCD is a behemoth,” says Bob Johnson, president and CEO of The American College of Financial Services in Bryn Mawr, Pennsylvania. “It has a market cap of more than $100 billion,” and profits are on the menu following CEO Don Thompson’s departure in 2015. MCD has rallied 20 percent the last 12 months to $119 per share — not quite the record of $131.60 hit in May, but a solid indication new CEO Steve Easterbook has put the world’s largest fast food chain back on track.
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Eagle Pharmaceuticals (EGRX): Uncommon cold. This Eagle soared from $14 per share in mid-July 2014 to an eye-popping $91 in mid-July 2015. But since then, Eagle has surrendered more than 40 percent of those profits with share prices down to $56. In February 2014, Teva Pharmaceutical Industries (TEVA) entered into an exclusive licensing agreement for the drug bendamustine, used to treat leukemia and lymphomas. But the blockbuster sequels some industry experts forecast haven’t materialized, leaving the buy-and-hold crowd to wonder whether their hold on profits is slipping.
Tronc (TRNC): Tepid expectations. It’s too soon to tell whether the risky rebranding of the storied Chicago Tribune newspaper franchise will bear e-fruit. The name change is all about promoting digital content, though it’s also inspired laughter. But those down on the moniker, and media stocks in general, might be surprised to learn TRNC stock is up two-thirds this year, trading at $15 per share. What’s more, tronc could hit profitability by 2019, according to analysts following the company.
Twitter (TWTR): #frozen. After Microsoft Corp. (MSFT) bought LinkedIn Corp. (LNKD) for $26.2 billion in June, Twitter shareholders could only look on in envy. Twitter has lost close to three-fourths of its value since January 2014, and has skidded throughout 2016. True, Twitter is arguably indispensable for its 300 million-plus monthly active users. But turning that volume into revenue has posed a problem. “Twitter’s biggest enemy is its simplicity,” says Andy Kapyrin, director of research at RegentAtlantic Capital in Morristown, New Jersey. “It’s a social network with only one feature: sound-bite comments.”
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Volkswagen Group: Cold road ahead. The wreckage of last September’s scandal, where the German automaker got caught cheating on U.S. emissions tests, is a year in the rearview. After dumping CEO Martin Winterkorn, VW stumbled back. Its stock is up 19 percent since the scandal, trading at $141 per share. But the bump may be short-lived, says K C Ma, director of the Roland George Investments Institute at Stetson University in DeLand, Florida. “We are pessimistic. It will take a long time for the market to realize that VW has been investable.”
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7 Hot (or Not) Stocks in 2016 originally appeared on usnews.com
