Good Stocks To Buy For 2018

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It may not be the biggest of the online brokers, but TD Ameritrade (AMTD (opens in new tab), $60.16) may well be one of the best online brokerage stocks to nab before it tacks on any more gains.

After a surge in U.S. markets during 2017, it could be time to start moving some capital to international equity markets. At CressCap our computer analysis employs a multi-factor quant model which focuses on well-balanced fundamentals. In this model we identify buy ideas with the collective traits of value, growth, strong EPS revisions, profitability and good long-term price momentum. All of these characteristics are measured and ranked on a sector relative basis with academic letter grades (A-F). Employing these core metrics has allowed our product to identify what we believe will be successful buys in 2018.

Our systematic trading model searches almost 7,000 stocks everyday to find companies that fulfill our time-tested parameters and criteria. Through this process and methodology, we have identified several international companies that we anticipate will perform incredibly well in 2018.

The banking sector was one of the strongest parts of the stock market in 2017, and it's not hard to understand why. Rising interest rates are boosting margins, deposits and assets are growing, and many banks are getting more efficient. Bank earnings are up nearly across the board. However, 2018 could be another good year for the industry, and our contributors think Goldman Sachs (GS 1.86%), Zions Bancorp (ZION -1.22%), and JPMorgan Chase (JPM 1.21%) in particular could have lots of room to grow.

Best of all, Zions trades for roughly 1.6 times tangible book value, while peers trade at 2 times tangible book value or more. It's my view that the valuation differential should compress, as rising net interest margin allows its true earnings power to show up in its bottom line, driving Zions stock higher throughout 2018.

Tax reform also has the potential to help JPMorgan to an even greater extent than some of its peers. Currently, JPMorgan ranks No. 2 on the list of 10 most profitable companies in the S&P 500, and although its international scope gives it a diverse exposure to tax systems across the globe, many believe that the bank could stand to benefit handsomely from the reduction in the corporate tax rate that took effect at the beginning of 2018. With major corporate clients also likely benefiting from tax reform, JPMorgan finds itself on the ground floor of what could be a new period of prosperity for the financial industry. That's already sent the stock to new all-time highs, but it looks like there's more room for further gains if conditions remain as good as they are right now.

Dan Caplinger has no position in any of the stocks mentioned. Jordan Wathen has no position in any of the stocks mentioned. Matthew Frankel has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

The banking industry is doing better today than it has in years, thanks to rising wages, a growing economy, and interest rates that are slowly creeping higher and higher. In 2018, American banks will get yet another boost as a lower corporate tax rate sends more of their earnings power to the bottom line.

In the article below, three Fool.com contributors explain why Toronto-Dominion (TD 0.79%), Citigroup (C 1.78%), and Huntington Bancshares (HBAN 0.54%) make the cut as top bank stocks to buy now.

Dan Caplinger has no position in any of the stocks mentioned. Jordan Wathen has no position in any of the stocks mentioned. Sean Williams has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Growth stocks have crashed. The time to buy is when there is blood on the streets, when no one else wants to buy. I have provided for Best of Breed Growth Stocks subscribers the Tech Stock Crash List (including the most recent update), the list of names I am buying amidst the tech crash.

Buffett has long benefited from owning stocks that reward shareholders through both methods. In an interview with CNBC this week, when asked whether investors should be worried about the stock market at a record level, he said that buybacks make owning the iPhone maker a no-lose situation right now.

Unlike dividends, which are typically implemented with the understanding that they will always be paid to shareholders unless there is a dramatic change in a business's situation, buybacks offer management the opportunity to do what Buffett likes best: buy undervalued stocks.

He said the same about Apple at the 2018 meeting: \"I'm delighted to see them repurchasing shares. ... You can say we own 5 percent of it. But I figure with, you know, with the passage of a little time we may own 6 or 7 percent simply because they repurchase shares. ... I find that if you've got an extraordinary product, and ecosystem, and there's lots to be done, I love the idea of having our 5 percent, or whatever it may be, grow to 6 or 7 percent without us laying out a dime. I mean, it's worked for us in many other situations.\"

When questioned at the 2018 Berkshire annual meeting about Apple not using its huge cash pile for acquisitions, Buffett said if the tech company doesn't see an acquisition that's even more attractive, buying more shares is the right decision. Buffett also noted it is very hard for a company of Apple's size to find an acquisition that would be accretive to earnings, probably in the $50 billion to $100 billion, or even $200 billion range.

Through the first two quarters of 2018, Apple repurchased $43.5 billion in shares, a record for a half-year period, according to S&P Dow Jones Indices data. Berkshire's stake in Apple shares, built in the past few years, is now valued at over $57 billion, almost twice as large as Buffett's last big acquisition, Precision Castparts, which was valued at roughly $32 billion in equity when the deal was struck in 2015.

More than a year removed from the deadly mass shooting at a concert at its Mandalay Bay hotel in Las Vegas, Jeff Rottinghaus, manager of the T. Rowe Price U.S. Large-Cap Core fund, is placing a bet on MGM Resorts International shares. While the stock is down about 40 percent from its January 2018 peak, the fund manager says its earnings and cash flow will get a boost next year from the ramp-up of its new MGM Cotai property in Macau, the reopened and renovated Park MGM Las Vegas, and a rebound in convention bookings after the tragic mass shooting on Oct. 1, 2017. \"Given the market's decelerating earnings growth, we are focusing on ideas or companies with easy earnings comparisons and on new product cycles that will allow for growth rates to look better than the broader market,\" Rottinghaus says.

Despite benefits from tax cuts and gains in net income, bank stocks performed far worse than the broad market in 2018. But Bill Nygren, manager of the Oakmark fund, thinks they are setting up for a good year in 2019. One bank stock he likes is Capital One, a leading credit card lender that the value investor says sells at a much cheaper price relative to its earnings than other big banks, such as JPMorgan Chase, Citigroup and Wells Fargo. While noting \"there is risk to any loan in a bad economy,\" Nygren doesn't see a recession next year. That's good news for Capital One, he says, which continues to seek out new customers to lend to, even those with lower credit ratings but which they charge a higher interest rate. Nygren also likes that the bank is using its excess capital to buy back its shares, which he believes are undervalued.

Cree, thanks to its silicon carbide components, better known as SiCs, is also on Landis' stocks-to-buy list. The company, he says, has \"finally found a great end market for this esoteric material\": its use in the emerging electric vehicle market. One of its newer switching devices, for example, power the drivetrain of electric vehicles, the company said earlier this year. \"The stock,\" says Landis, \"has a lot of upside.\" One benefit of owning Cree, he adds, is it is not an overly popular stock that every investor around the globe has heard about.

Who says cash is dead, replaced by plastic payments Those Brink's trucks you see in front of retail outlets with armed guards are still relevant, says Ward Sexton, manager of William Blair Small Cap Growth Fund. \"There's still money to be made moving money by truck,\" he says. Brink's, which serves customers in more than 100 countries, began bolstering its management ranks back in 2016 with the appointment of CEO Douglas Pertz. The new team, Sexton says, is focused on \"driving returns, taking out costs and being more efficient,\" moves that helped boost its operating profit by 25 percent in 2018's third quarter. Brink's recent partnership with Canopy Growth, Canada's leading cannabis producer, will provide a business boost. Brink's will not only provide secure logistics and cash management services for the the pot company, it will also provided transport services for its growers and retail customers.

The investment in the knowledge base that makes a company competitive goes far beyond R&D expenditures. In fact, in 2018, only 43% of companies in the S&P 500 Index recorded any R&D expenses, with just 38 companies accounting for 75% of the R&D spending of all 500 companies. Whether or not a firm spends on R&D, all companies have to invest broadly and deeply in the productive capabilities of their employees in order to remain competitive in global markets.

JPMorgan Chase has constructed a time series for 1997 through 2018 that estimates the percentage of buybacks by S&P 500 companies that have been debt-financed, increasing the financial fragility of companies. In general, the percentage of buybacks that have been funded by borrowed money has been far higher in stock-market booms than in busts, as companies have com