For 2019, TheStreet has compiled a list of the top 25 stocks of the year, looking at everything from stock performance and quarterly results versus expectations to execution against strategy and each stock’s overall story.
We polled a group of 18 writers and editors at both TheStreet and RealMoney and asked them to nominate candidates, and then winnowed that list down to the top 25 stocks. We then asked each of those writers and editors to rank the top 25 from top to bottom, and assigned 25 points for a No. 1 rank, 24 points for a No. 2 rank, 23 points for a No. 3 rank, etc. We then totaled the points for each stock to arrive at our final rankings.
The result is a comprehensive list of the stocks that performed and executed the best this year, helping drive the S&P 500’s overall stellar year-to-date gains of 25% in 2019.
We’ll be rolling out the results over the next week, with round-ups for the 25th-ranked through the 6th-ranked stocks, and then individual articles on our top five picks, with our top pick to be revealed on Friday, Dec. 20.
Please check TheStreet.com each day between now and then to read about our latest picks.
25. Procter & Gamble
2019 stock performance*: +39%
As 2019 commenced, sales, profits and share price expectations for Procter & Gamble (PG) - Get Report were subdued as consumer packaged goods companies were under attack by generics and by alternative product offering experiences on Amazon (AMZN) - Get Report and elsewhere. Nevertheless, as the year progressed, P&G differentiated itself from other consumer non durable companies (such as Campbell Soup (CPB) - Get Report and Kraft Heinz (KHC) - Get Report) by delivering superior year-over-year comp gains and stronger operating results than the consensus expected. That momentum strengthened in the second half of the year as EPS estimates were raised for the company at a time in which many of its competitors continued to falter.
2019 stock performance*: +37%
Since the end of 2018, Starbucks (SBUX) - Get Report has proved it can grow same-store-sales at a 3% plus clip for the mid to long-term, up from sub 2% for most of 2018. In 2019, the company has improved its digital experience and relied heavily on its app, which it uses to grow customer loyalty and understand its customer base, enabling it to market the right products to customers. Management has also improved foot traffic and store efficiency through several in-store tweaks, helping increase operating margins to above 17.5% from 16% in 2018. Starbucks is also expanding aggressively in China, so added stores are a key part of the total revenue growth story. Analysts are now expecting 11% to 12% annual earnings growth for the next several years, and the stock’s multiple has expanded to 29 times next year’s earnings.
2019 stock performance*: +89%
Xerox’s (XRX) - Get Report rise to to post-financial crisis highs has been driven by restructurings put in place by Carl Icahn-backed board members and executives. In February the company launched efforts to cut costs by $640 million this year. Icahn had long criticized Xerox for being inefficient and failing to control costs. In June, the company expanded its relationship with HP, with the companies agreeing to cross-sell and support each other’s products and services. The imaging business is seeing development of so-called device-as-a-service deals in which companies subscribe to plans that include software, hardware and services for a single recurring fee. Armed with a better stock price, Xerox launched an outright bid for HP in November and after its bid was rejected, began pursuing a hostile takeover. Shares have lost some ground since the takeover battle began, but Icahn is likely to keep the pressure on, having criticized HP earlier this month for its rejection.
22. Kosmos Energy
2019 stock performance*: +31%
Kosmos (KOS) - Get Report is an international exploration and production company with current producing assets at $55 per barrel and drilling prospects that can produce up to 8-10% compound annual production growth. The stock is up 37% in a year when the energy sector has underperformed broader asset classes. It has solid cash and strong management discipline from producing assets, generating a 3% dividend yield and a net debt of $1.9 billion, as of the end of Q2 2019. Next year with new wells to be drilled, the risk reward is asymmetric with upside as much as 100%+ and downside limited to current production at the base case oil price.
21. Bank of America
2019 stock performance*: +40%
With the Fed cutting rates and the economy just muddling through, Bank of America (BAC) - Get Report has managed to break through some stout resistance and run to levels not seen in over 10 years. Brian Moynihan is one of the top operators around, and with Merrill Lynch and Countrywide under the company’s umbrella, BofA has two of the best in mortgage services and brokerage services. Amazingly, the stock is not far from an all-time high, far away from the days in 2008 when the stock was trading at a paltry 3 bucks.
* As of Dec. 11 close