Company name Netflix Inc
Stock ticker NFLX
Live stock price [stckqut]NFLX[/stckqut]
P/E compared to competitors Fair

 

MANAGEMENT EXECUTION

Employee productivity Good
Sales growth Good
EPS growth Good
P/E growth Good
EBITDA growth Good
Price growth Good
R&D growth Good
Income growth Good
Assets growth Good
Return on Assets growth Good
Income / Rev growth Good
TWCA Plus Good
Standard TWCA Good
Weighted ann. stock price increase Good

 

ANALYSIS

Confident Investor Rating Good
Target stock price (TWCA growth scenario) $671.05
Target stock price (averages with growth) $304.85
Target stock price (averages with no growth) $300.81
Target stock price (manual assumptions) $527.54

 

The following company description is from Reuters: https://finance.yahoo.com/quote/nflx/profile?p=nflx

Netflix, Inc. provides subscription streaming entertainment service. It offers TV series, documentaries, and feature films across various genres and languages. The company provides members the ability to receive streaming content through a host of Internet-connected screens, including TVs, digital video players, television set-top boxes, and mobile devices. It also provides DVDs-by-mail membership services. The company has approximately 167 million paid members in 190 countries. Netflix, Inc. was founded in 1997 and is headquartered in Los Gatos, California.

 

Confident Investor comments: At this price and at this time, I think that a Confident Investor can confidently invest in Netflix Inc as long as the indicators that I describe in my book The Confident Investor are favorable.

If you would like to understand how to evaluate companies like I do on this site, please read my book, The Confident Investor. You can review the best companies that I have found (and I probably invest my own money in most of these companies) in my Watch List.

How was this analysis of Netflix Inc calculated?

For owners of my book, "The Confident Investor" I offer the following analysis (you must be logged in to this site as a book owner in order to see the following analysis). If you have registered and cannot see the balance of this article, make sure you are logged in and refresh your browser.

I hope that this makes you a Confident Investor.

ID-100203460We are halfway through the year! How is your portfolio doing?

I offer my 15 recommended stocks for the 3rd 3 months of 2018 - the third quarter of the year. I cannot list the worst stocks, as there are too many of those to itemize. I can at least list the 15 recommended stocks that will give you a good basis for the next three months of 2018.

Many sites do all year lists, but I am only committing to this list for the next three months. There is a great reason for this limitation. It is almost impossible to predict the market farther out than 3-6 month. In fact, it is quite possible for the market to do a massive correction and even this list would be a fallacy. There is always some risk with any investment and you are encouraged to read this site's disclaimer before acting on this list.

I would expect all of these companies to maintain their status as Good Companies on my Watch List. I would not expect all of them to make a top 15 recommended stocks list in the last quarter of 2018. Some of them will grow a bit slower than I expect, and a couple of the 15 recommended stocks are probably going to lose money. As Peter Lynch famously said:

“In this business if you're good, you're right six times out of ten. You're never going to be right nine times out of ten.”

I hope to be right on this list with 12 of these picks, but Peter says I should be happy with 9. I don’t expect all 15 recommended stocks to be massive growth stocks in the year. I also think the list is successful if the list of 15 beats the Nasdaq Composite and the Dow30. In October, I plan to publish a list for the last quarter of the year.

All of the stocks on this list are rated as Good Companies using the method that I describe in my book The Confident Investor You can purchase my book wherever books are sold such as AmazonBarnes and Noble, and Books A Million. It is available in e-book formats for NookKindle, and iPad.

The 15 recommended stocks were chosen from Good Companies on my Watch List. This means we already know they are fairly well managed and have a history of solid growth. While all of the stocks on the Watch List are well run, these 15 recommended stocks seem to be the most well set up for aggressive growth in the third quarter of 2018.

The 15 recommended stocks for the third quarter of 2018 also performed very well over the past 12 months and the past 3 years. As I have written before, the past is not a perfect indicator of the future, but it is probably the best indicator that we have to use.

To show this strong performance, I will plot the growth of these 15 companies compared to several indices. My 15 stocks significantly outperformed the Dow Jones and Nasdaq Composite. My list had an annual growth of 87.97%, while the others grew at 13.40% and 24.16% respectively.

In other words, my list beat the market in the last 12 months by over 350%! For every dollar that you could have earned in an index fund, you would have earned $3.50 (or more) with my Short Term List.

My Short Term Watch List DESTROYS The Market!!

The above chart shows what would have happened if you invested $10,000 in my Short Term list compared to investing $10,000 in an index.

I didn’t try to make this list of 15 recommended stocks to be a balanced portfolio covering multiple industries. I am happy to report that it isn’t terribly unbalanced. The reality is that if you plan to rebalance your portfolio every 3 months, then you really do not have to worry too much about industry balance.

If you want a more balanced portfolio, you should have approximately 30% of your portfolio invested in index funds. These funds should be divided by large and small-cap funds, an index bond fund, and an index international fund. This would help to balance your portfolio.

You could also look at the Watch List of stocks. These stocks have shown that they are well-run companies. If you are concerned about a balanced portfolio, I suggest that you compliment the 15 recommended stocks with a couple stocks from the Watch List.

The list of 15 recommended stocks for the first quarter of 2018

The list of 15 recommended stocks for the first quarter of 2018 sorted alphabetically by stock symbol are:

If you want to know a bit more about the companies that comprise the 15 recommended stocks for the 3rd quarter of 2018, you can read below. The descriptions primarily came from the short paragraph descriptions about the company found on Reuters. https://www.google.com/finance. You can also click on a company name on the right side of this site, under the heading of Most Reviewed Companies (you may need to scroll down) as most of the companies on this list have been reviewed here several times.

  • ABIOMED, Inc. [stckqut]ABMD[/stckqut]
    • ABIOMED, Inc., incorporated on June 4, 1987, is a provider of temporary percutaneous mechanical circulatory support devices. The Company offers care to heart failure patients. The Company operates in the segment of the research, development and sale of medical devices to assist or replace the pumping function of the failing heart. The Company develops, manufactures and markets products that are designed to enable the heart to rest, heal and recover by improving blood flow to the coronary arteries and end-organs and/or temporarily performing the pumping function of the heart. The Company's product portfolio includes the Impella 2.5, Impella CP, Impella RP, Impella LD, Impella 5.0 and AB5000. Its products are used in the cardiac catheterization lab (cath lab), by interventional cardiologists, the electrophysiology lab, the hybrid lab and in the heart surgery suite by heart surgeons.
  • Adobe Systems Incorporated [stckqut]ADBE[/stckqut]
    • Adobe Systems Incorporated, incorporated on May 9, 1997, is a software company. The Company offers a line of products and services used by professionals, marketers, knowledge workers, application developers, enterprises and consumers for creating, managing, delivering, measuring, optimizing and engaging with compelling content and experiences across multiple operating systems, devices and media. The Company operates through three segments: Digital Media, Digital Marketing, and Print and Publishing. The Company markets and licenses its products and services directly to enterprise customers through its sales force and to end users through application stores and its own Website at www.adobe.com. It offers various products through a software-as-a-service (SaaS) model or a managed services model (both of which are referred to as a hosted or cloud-based model), as well as through term subscription and pay-per-use models.
  • Align Technology, Inc. [stckqut]ALGN[/stckqut]
    • Align Technology, Inc., incorporated on April 3, 1997, designs, manufactures and markets a system of clear aligner therapy, intra-oral scanners and computer-aided design/computer-aided manufacturing (CAD/CAM) digital services used in dentistry, orthodontics and dental records storage. The Company operates through two segments: Clear Aligner segment and Scanner and Services (Scanner) segment. The Clear Aligner segment consists of its Invisalign System, which includes Invisalign Full, Teen and Assist (Comprehensive Products), Express/Lite (Non-Comprehensive Products) and Vivera Retainers, along with its training and ancillary products for treating malocclusion (Non-Case). The Scanner segment consists of intra-oral scanning systems and other services available with the intra-oral scanners that provide digital alternatives to the traditional cast models. The Scanner segment includes its iTero scanner and OrthoCAD services. iTero scanner is used by dental professionals, and labs and services for restorative and orthodontic digital procedures, as well as Invisalign digital impression submission.
  • Arista Networks Inc [stckqut]ANET[/stckqut]
    • Arista Networks, Inc., incorporated on December 2, 2011, is a supplier of cloud networking solutions that use software innovations to address the needs of Internet companies, cloud service providers and data centers for enterprise support. The Company develops, markets and sells cloud networking solutions, which consist of its Gigabit Ethernet switches and related software. The Company's cloud networking solutions consist of its Extensible Operating System (EOS), a set of network applications and its Ethernet switching and routing platforms. The programmability of EOS has allowed the Company to create a set of software applications that address the requirements of cloud networking, including workflow automation, network visibility, and analytics, and has also allowed it to integrate with a range of third-party applications for virtualization, management, automation, orchestration and network services. EOS supports cloud and virtualization solutions, including VMware NSX, Microsoft System Center, OpenStack and other cloud management frameworks.
  • Heska Corp [stckqut]HSKA[/stckqut]
    • Heska Corporation, incorporated on March 27, 1997, sells veterinary diagnostic and specialty products. The Company operates through two segments: Core Companion Animal Health (CCA) and Other Vaccines, Pharmaceuticals and Products (OVP). The CCA segment includes, primarily for canine and feline use, blood testing instruments and supplies, digital imaging products, software and services, local and cloud-based data services, allergy testing and immunotherapy, and single-use offerings, such as in-clinic diagnostic tests and heartworm preventive products. Its OVP segment includes private label vaccine and pharmaceutical production, primarily for cattle but also for other species, including equine, porcine, avian, feline and canine. All OVP products are sold by third parties under third-party labels. The Company focuses on supporting veterinarians in the canine and feline healthcare space.
  • LGI Homes Inc [stckqut]LGIH[/stckqut]
    • LGI Homes, Inc., incorporated on June 26, 2013, is a homebuilder and land developer. The Company is engaged in the design, construction, marketing and sale of new homes in markets in Texas, Arizona, Florida, Georgia, New Mexico, South Carolina, North Carolina, Colorado, Washington, and Tennessee. The Company operates through five segments: the Texas division, the Southwest division, the Southeast division, the Florida division, and the Northwest division. The Texas division includes homebuilding operations in Houston, Dallas/Fort Worth, San Antonio and Austin locations. The Southwest division includes homebuilding operations in Phoenix, Tucson, Albuquerque, Denver and Colorado Springs locations. The Southeast division includes homebuilding operations in Atlanta, Charlotte and Nashville locations. The Florida division includes homebuilding operations in Tampa, Orlando, Fort Myers and Jacksonville locations. The Northwest division includes homebuilding operations in Seattle location. The Company's product offerings include entry-level homes and move-up homes sold under its LGI Homes brand, and its luxury series homes, which are sold under its Terrata Homes brand. As of December 31, 2016, the Company had 59 active communities with its LGI Homes brand and four with its Terrata Homes brand. The Company provides information regarding floor plans and pricing, credit and income qualifications and conduct tours of its homes. In addition, it provides each homebuyer with an introduction to the community and the surrounding area, providing them with information regarding utilities, schools, homeowners association dues and restrictions, local entertainment and nearby dining and shopping options. It offers a set number of floor plans in each community with features that include upgrades, such as granite countertops, appliances, and ceramic tile flooring.
  • Lululemon Athletica inc. [stckqut]LULU[/stckqut]
    • lululemon athletica inc., incorporated on November 21, 2005, is a designer, distributor, and retailer of athletic apparel. The Company operates through two segments: Company-operated stores and Direct to the consumer. The Company is also engaged in the sale from outlets, showrooms, sales from temporary locations, sales to wholesale accounts, warehouse sales, and license and supply arrangements. As of January 29, 2017, the Company had operated 406 stores located in the United States, Canada, Australia, the United Kingdom, New Zealand, China, Hong Kong, Singapore, South Korea, Germany, Puerto Rico and Switzerland. Its direct to consumer segment generates revenue from its lululemon and ivivva e-commerce websites, www.lululemon.com and www.ivivva.com, and other country and region-specific websites. The Company operates and distributes finished products from its owned or leased distribution facilities in the United States, Canada, and Australia. The Company owns its distribution center in Columbus, Ohio, and leases its other distribution facilities. The Company offers a range of apparel and accessories for women, men and female youth. Its apparel assortment includes items, such as pants, shorts, tops, and jackets designed for healthy lifestyle and athletic activities, such as yoga, running, training, most other sweaty pursuits, and athletic wear for female youth. It also offers fitness-related accessories, including an array of items, such as bags, socks, underwear, yoga mats and water bottles. Most of its Company-operated stores are branded lululemon, 55 of its Company-operated stores are branded ivivva and specialize in athletic wear for female youth. Its retail stores are located primarily in street locations, in lifestyle centers, and in malls. The Company competes with Nike, Inc., adidas AG, Under Armour, Inc., The Gap, Inc. and L Brands, Inc.
  • Mastercard Inc [stckqut]MA[/stckqut]
    • MasterCard Incorporated, incorporated on May 9, 2001, is a technology company that connects consumers, financial institutions, merchants, governments and businesses across the world, enabling them to use electronic forms of payment. The Company operates through Payment Solutions segment. The Company allows a user to make payments by creating a range of payment solutions and services using its brands, which include MasterCard, Maestro, and Cirrus. The Company provides a range of products and solutions that support payment products, which customers can offer to their cardholders. The Company's services facilitate transactions on its network among cardholders, merchants, financial institutions, and governments. The Company's products include consumer credit and charge, commercial, debit, prepaid, commercial and digital. The Company's consumer credit and charge offers a range of programs that enable issuers to provide consumers with cards allowing users to defer payment. The Company's debit supports a range of payment products and solutions that allow its customers to provide consumers with access to funds in deposit and other accounts. The Company offers prepaid payment programs using any of its brands, which it supports with processing products and services. The Company focuses on segments, which include government programs, such as social security payments, unemployment benefits, and others; commercial programs, such as payroll, health savings accounts, employee benefits and others, and consumer reloadable programs for individuals and users of electronic payments. The Company also provides prepaid program management services, primarily outside of the United States, that manage and enable switching and issuer processing for consumer and commercial prepaid travel cards for business partners, such as financial institutions, retailers, telecommunications companies, travel agents, foreign exchange bureaus, colleges and universities, airlines and governments.
  • Micron Technology, Inc. [stckqut]MU[/stckqut]
    • Micron Technology, Inc., incorporated on April 6, 1984, is engaged in semiconductor systems. The Company's portfolio of memory technologies, including dynamic random-access memory (DRAM), negative-AND (NAND) Flash, and NOR Flash are the basis for solid-state drives, modules, multi-chip packages and other system solutions. Its business segments include Compute and Networking Business Unit (CNBU), which includes memory products sold into compute, networking, graphics and cloud server markets; Mobile Business Unit (MBU), which includes memory products sold into smartphone, tablet and other mobile-device markets; Storage Business Unit (SBU), which includes memory products sold into enterprise, client, cloud and removable storage markets, and SBU also includes products sold to Intel through its Intel/Micron Flash Technology (IMFT) joint venture, and Embedded Business Unit (EBU), which includes memory products sold into automotive, industrial, connected home and consumer electronics markets. The Company's memory solutions enable computing, consumer, enterprise storage, networking, mobile, embedded and automotive applications. The Company markets its products through internal sales force, independent sales representatives and distributors primarily to original equipment manufacturers (OEMs) and retailers located around the world.
  • Netflix, Inc. [stckqut]NFLX[/stckqut]
    • Netflix, Inc., incorporated on August 29, 1997, is a provider an Internet television network. The Company operates through three segments: Domestic streaming, International streaming, and Domestic DVD. The Domestic streaming segment includes services that streams content to its members in the United States. The International streaming segment includes services that streams content to its members outside the United States. The Domestic DVD segment includes services, such as digital optical disc (DVD)-by-mail. The Company's members can watch original series, documentaries, feature films, as well as television shows and movies directly on their Internet-connected screen, televisions, computers and mobile devices. It offers its streaming services both domestically and internationally. In the United States, its members can receive DVDs delivered to their homes. The Company had members streaming in over 190 countries, as of December 31, 2016. Its subsidiaries include Netflix Entretenimento Brasil LTDA, Netflix K.K., Netflix International B.V., Netflix Streaming Services, Inc., NetflixCS, Inc. and Netflix Studios, LLC.
  • Insperity, Inc. [stckqut]NSP[/stckqut]
    • Insperity, Inc. (Insperity), incorporated on August 9, 1995, provides a range of human resources (HR) and business solutions. The Company's HR services offerings are provided through its Workforce Optimization and Workforce Synchronization solutions (together, its professional employer organization (PEO) HR Outsourcing solutions), which encompass a range of human resources functions, including payroll and employment administration, employee benefits, workers' compensation, government compliance, performance management, and training and development services, along with its cloud-based human capital management platform, the Employee Service Center (ESC). In addition to its PEO HR Outsourcing solutions, the Company offers various other business performance solutions, including Human Capital Management, Payroll Services, Time and Attendance, Performance Management, Organizational Planning, Recruiting Services, Employment Screening, Financial and Expense Management Services, Retirement Services and Insurance Services, which are offered through desktop applications and cloud-based delivery models. These other products and services are offered separately, along with its PEO HR Outsourcing solutions or as a bundle, such as its Workforce Administration solution that provides a human capital management and payroll service solution.
  • NVIDIA Corporation [stckqut]NVDA[/stckqut]
    • Nvidia Corporation, incorporated on February 24, 1998, focuses on personal computer (PC) graphics, graphics processing unit (GPU) and also on artificial intelligence (AI). The Company provides service to its customers through PC, mobile and cloud architectures. The Company operates through two segments: GPU and Tegra Processor, which are based on a single underlying architecture. The Company's processor has created platforms that address four markets: Gaming, Professional Visualization, Datacenter, and Automotive. The Company's GPU product brands are aimed at specialized markets, including GeForce for gamers; Quadro for designers; Tesla and DGX for AI data scientists and big data researchers, and GRID for cloud-based visual computing users. The Company's Tegra brand integrates an entire computer onto a single chip, and incorporates GPUs and multi-core central processing units (CPUs) to drive supercomputing for mobile gaming and entertainment devices, as well as autonomous robots, drones and cars.
  • TriNet Group Inc [stckqut]TNET[/stckqut]
    • TriNet Group, Inc. (TriNet), incorporated on January 26, 2000, is a provider of human resources (HR) solutions for small to medium-sized businesses (SMBs). The Company's HR solutions include services, such as multi-state payroll processing and tax administration, employee benefits programs, including health insurance and retirement plans, workers' compensation insurance and claims management, employment and benefit law compliance, and other services. The Company provides an HR technology platform with online and mobile tools that allow its clients and their worksite employees (WSEs) to store, view and manage their HR-related information and conducts a range of HR-related transactions anytime and anywhere. The Company's clients are distributed across a range of industries, including technology, life sciences, not-for-profit, professional services, financial services, property management, retail, manufacturing, and hospitality.
  • WellCare Health Plans, Inc. [stckqut]WCG[/stckqut]
    • WellCare Health Plans, Inc., incorporated on February 5, 2004, is a managed care company. The Company focuses on government-sponsored managed care services, primarily through Medicaid, Medicare Advantage (MA) and Medicare Prescription Drug Plans (PDPs), to families, children, seniors and individuals with medical needs. The Company operates in three segments: Medicaid Health Plans, Medicare Health Plans, and Medicare PDPs. As of December 31, 2016, it served approximately 3.9 million members in 50 states and the District of Columbia. As of December 31, 2016, it operated Medicaid health plans in Arizona, Florida, Georgia, Hawaii, Illinois, Kentucky, Missouri, New Jersey, New York and South Carolina. As of December 31, 2016, it offered MA coordinated care plans (CCPs) in certain counties in Arizona, Arkansas, California, Connecticut, Florida, Georgia, Hawaii, Illinois, Kentucky, Louisiana, Mississippi, New Jersey, New York, South Carolina, Tennessee and Texas. As of December 31, 2016, it also offered standalone Medicare PDPs in 50 states and the District of Columbia.

My typical disclaimer says that I may or may not have a holding of the stocks discussed in this article. This would be a bit misleading for this particular article. You can assume that I am currently invested in every one of these stocks at the time of this writing.

The glass globe image at the top of this article is courtesy of suphakit73 at FreeDigitalPhotos.net

Company name Netflix, Inc.
Stock ticker NFLX
Live stock price [stckqut]NFLX[/stckqut]
P/E compared to competitors Fair

MANAGEMENT EXECUTION

Employee productivity Good
Sales growth Good
EPS growth Good
P/E growth Good
EBIT growth Good

ANALYSIS

Confident Investor Rating Good
Target stock price (TWCA growth scenario) $614.72
Target stock price (averages with growth) $904.97
Target stock price (averages with no growth) $614.72
Target stock price (manual assumptions) $614.1

The following company description is from Reuters: https://www.reuters.com/finance/stocks/company-profile/nflx

Netflix, Inc., incorporated on August 29, 1997, is a provider an Internet television network. The Company operates through three segments: Domestic streaming, International streaming, and Domestic DVD. The Domestic streaming segment includes services that streams content to its members in the United States. The International streaming segment includes services that streams content to its members outside the United States. The Domestic DVD segment includes services, such as digital optical disc (DVD)-by-mail.

The Company's members can watch original series, documentaries, feature films, as well as television shows and movies directly on their Internet-connected screen, televisions, computers and mobile devices. It offers its streaming services both domestically and internationally. In the United States, its members can receive DVDs delivered to their homes. The Company had members streaming in over 190 countries, as of December 31, 2016. Its subsidiaries include Netflix Entretenimento Brasil LTDA, Netflix K.K., Netflix International B.V., Netflix Streaming Services, Inc., NetflixCS, Inc. and Netflix Studios, LLC.

 

Confident Investor comments: At this price and at this time, I think that a Confident Investor can confidently invest in Netflix, Inc. as long as the indicators that I describe in my book The Confident Investor are favorable.

If you would like to understand how to evaluate companies like I do on this site, please read my book, The Confident Investor. You can review the best companies that I have found (and I probably invest my own money in most of these companies) in my Watch List.

How was this analysis of Netflix, Inc. calculated?

For owners of my book, "The Confident Investor" I offer the following analysis (you must be logged in to this site as a book owner in order to see the following analysis). If you have registered and cannot see the balance of this article, make sure you are logged in and refresh your browser.

I hope that this makes you a Confident Investor.

Amazon Spheres

If there’s one thing that connects the three biggest streaming companies—Hulu, Amazon Prime Video, and Netflix [stckqut]NFLX[/stckqut]—it’s that they like to keep their numbers to themselves. That’s why it’s always intriguing when anything leaks out, like on Wednesday, when Reuters published a report detailing Amazon’s internal viewership statistics for Prime Video. Amazon [stckqut]AMZN[/stckqut] declined to comment on the findings, but the documents, which contain data from 2014 to early 2017, highlight how the company evaluates its original video content.

Amazon is far more than a streaming company, which separates it from Hulu and Netflix. Amazon’s customers are there for more than watching content: It’s a gateway for the company to get even more people hooked on streaming services to purchase items online. Still, the streaming arm of Amazon has seen better days, between the ousting of former Amazon Studios head Roy Price in light of sexual harassment allegations and the cancellation of several of the service’s critically acclaimed showsin the past few months. Reuters’s findings provide a literal by-the-numbers approach to the struggling service’s strategy.

Amazon evaluates its shows with a “cost per first stream” method, dividing a program’s marketing and production costs by the number of people who tune in to the first episode, or “first streams.” (Reuters has a handy interactive graphic that shows you how 10 Amazon Originals seasons stack up, and how the company perceives their respective value.) For example, despite the first season of alt-history drama The Man in the High Castle costing $72 million, it drew 1.15 million first streams, which amounts to an average cost of $63 dollars per subscriber. The only show more profitable of the ones featured in the Reuters graphic was Season 1 of The Grand Tour—the motorsports series featuring Top Gear alums Jeremy Clarkson, Richard Hammond, and James May—at $49 dollars per subscriber with 1.5 million first streams at a $78 million production cost.

All told, the documents show that there are 26 million customers who use Amazon’s video service. It’s pennies compared with Netflix—which boasted having 94 million subscribers in the final quarter of 2017—but Amazon is far more than a streaming company. As Bezos put it in 2016: “When we win a Golden Globe, it helps us sell more shoes.”

Amazon’s strategy isn’t infallible, and its execution is even worse: The amount the company spent on Good Girls Revolt is staggering, and, in just one season, The Man in the High Castle went from being its most successful endeavor to its third-worst; suddenly, based on the numbers, the show can be deemed cancellation-worthy. However, if Amazon wants to grab a foothold in the streaming wars, it will need to take bigger risks to reach for a bigger reward. That’s just math.

Source: To Win the Streaming Wars, Amazon Will Need to Take More Risks - The Ringer

ID-100203460It is time to start the year with strength! In that vein, I offer my 15 recommended stocks for the first 3 months of 2018. I cannot list the worst stocks, as there are too many of those to itemize. I can at least list the 15 recommended stocks that will give you a good basis for the first three months of 2018.

Many sites do all year lists, but I am only committing to this list for the first three months. There is a great reason for this limitation. It is almost impossible to predict the market farther out than 3-6 month. In fact, it is quite possible for the market to do a massive correction and even this list would be a fallacy. There is always some risk with any investment and you are encouraged to read this site's disclaimer before acting on this list.

I would expect all of these companies to maintain their status as Good Companies on my Watch List. I would not expect all of them to make a top 15 recommended stocks list in the second quarter of 2018. Some of them will grow a bit slower than I expect, and a couple of the 15 recommended stocks are probably going to lose money. As Peter Lynch famously said:

“In this business if you're good, you're right six times out of ten. You're never going to be right nine times out of ten.”

I hope to be right on this list with 12 of these picks, but Peter says I should be happy with 9. I don’t expect all 15 recommended stocks to be massive growth stocks in the year. I also think the list is successful if the list of 15 beats the S&P 500 and the Dow30. In April, I plan to publish a list for the second quarter of the year.

All of the stocks on this list are rated as Good Companies using the method that I describe in my book The Confident Investor You can purchase my book wherever books are sold such as AmazonBarnes and Noble, and Books A Million. It is available in e-book formats for NookKindle, and iPad.

The 15 recommended stocks were chosen from Good Companies on my Watch List. This means we already know they are fairly well managed and have a history of solid growth. While all of the stocks on the Watch List are well run, these 15 recommended stocks seem to be the most well set up for aggressive growth in the first quarter of 2018.

The 15 recommended stocks for the first quarter of 2018 also performed very well over the past year and the past 3 years. As I have written before, the past is not a perfect indicator of the future, but it is probably the best indicator that we have to use.

To show this strong performance, I will use a tool from Google Finance to plot the growth of these 15 companies compared to several indices. According to Google, my 15 stocks significantly outperformed the Dow Jones, S&P5oo, and Nasdaq. My list had an annual growth of 99.82%, while the others grew at 27.12%, 21.10%, 29.39% respectively.

In other words, my list beat the market in 2017 by over 300%! For every dollar that you could have earned in an index fund, you would have earned $3 (or more) with my Short Term List.

 

I didn’t try to make this list of 15 recommended stocks to be a balanced portfolio covering multiple industries. I am happy to report that it isn’t terribly unbalanced. The reality is that if you plan to rebalance your portfolio every 3 months, then you really do not have to worry too much about industry balance.

If you want a more balanced portfolio, you should have approximately 30% of your portfolio invested in index funds. These funds should be divided by large and small-cap funds, an index bond fund, and an index international fund. This would help to balance your portfolio.

You could also look at the Watch List of stocks. These stocks have shown that they are well-run companies. If you are concerned about a balanced portfolio, I suggest that you compliment the 15 recommended stocks with a couple stocks from the Watch List.

The list of 15 recommended stocks for the first quarter of 2018

The list of 15 recommended stocks for the first quarter of 2018 sorted alphabetically by stock symbol are:

  • ABIOMED, Inc. [stckqut]ABMD[/stckqut]
  • Adobe Systems Incorporated [stckqut]ADBE[/stckqut]
  • Align Technology, Inc. [stckqut]ALGN[/stckqut]
  • Applied Materials, Inc. [stckqut]AMAT[/stckqut]
  • Amazon.com, Inc. [stckqut]AMZN[/stckqut]
  • Arista Networks Inc [stckqut]ANET[/stckqut]
  • Alibaba Group Holding Ltd [stckqut]BABA[/stckqut]
  • Installed Building Products Inc [stckqut]IBP[/stckqut]
  • LGI Homes Inc [stckqut]LGIH[/stckqut]
  • Lam Research Corporation [stckqut]LRCX[/stckqut]
  • Micron Technology, Inc. [stckqut]MU[/stckqut]
  • Netflix, Inc. [stckqut]NFLX[/stckqut]
  • NVIDIA Corporation [stckqut]NVDA[/stckqut]
  • Transportadora de Gas del Sur SA (ADR) [stckqut]TGS[/stckqut]
  • TriNet Group Inc [stckqut]TNET[/stckqut]

If you want to know a bit more about the companies that comprise the 15 recommended stocks for the first quarter of 2018, you can read below. The descriptions primarily came from the short paragraph descriptions about the company found on Google Finance. https://www.google.com/finance. The stock price charts also came from Google Finance. You can also click on a company name on the right side of this site, under the heading of Most Reviewed Companies (you may need to scroll down) as most of the companies on this list have been reviewed here several times.

  • ABIOMED, Inc. [stckqut]ABMD[/stckqut]
    • ABIOMED, Inc. is a provider of temporary percutaneous mechanical circulatory support devices. The Company offers care to heart failure patients. The Company operates in the segment of the research, development and sale of medical devices to assist or replace the pumping function of the failing heart. The Company develops, manufactures and markets products that are designed to enable the heart to rest, heal and recover by improving blood flow to the coronary arteries and end-organs and/or temporarily performing the pumping function of the heart. The Company's product portfolio includes the Impella 2.5, Impella CP, Impella RP, Impella LD, Impella 5.0 and AB5000. The Company's products are used in the cardiac catheterization lab (cath lab), by interventional cardiologists, the electrophysiology lab, the hybrid lab and in the heart surgery suite by heart surgeons.
  • Adobe Systems Incorporated [stckqut]ADBE[/stckqut]
    • Adobe Systems Incorporated is a software company. The Company offers products and services used by professionals, marketers, knowledge workers, application developers, enterprises and consumers for creating, managing, delivering, measuring, optimizing and engaging with compelling content and experiences. It operates through three segments: Digital Media, Digital Marketing, and Print and Publishing. Its Digital Media segment provides tools and solutions that enable individuals, small and medium businesses and enterprises to create, publish, promote and monetize their digital content. Its Digital Marketing segment provides solutions and services for how digital advertising and marketing are created, managed, executed, measured and optimized. Its Print and Publishing segment addresses market opportunities ranging from the diverse authoring and publishing needs of technical and business publishing to its legacy type and original equipment manufacturer (OEM) printing businesses.
  • Align Technology, Inc. [stckqut]ALGN[/stckqut]
    • Align Technology, Inc. designs, manufactures and markets a system of clear aligner therapy, intra-oral scanners and computer-aided design/computer-aided manufacturing (CAD/CAM) digital services used in dentistry, orthodontics and dental records storage. The Company operates through two segments: Clear Aligner segment and Scanner and Services (Scanner) segment. The Clear Aligner segment consists of its Invisalign System, which includes Invisalign Full, Teen and Assist (Comprehensive Products), Express/Lite (Non-Comprehensive Products) and Vivera Retainers, along with its training and ancillary products for treating malocclusion (Non-Case). The Scanner segment consists of intra-oral scanning systems and other services available with the intra-oral scanners that provide digital alternatives to the traditional cast models. The Scanner segment includes its iTero scanner and OrthoCAD services.
  • Applied Materials, Inc. [stckqut]AMAT[/stckqut]
    • Applied Materials, Inc. provides manufacturing equipment, services and software to the global semiconductor, display and related industries. The Company's segments are Semiconductor Systems, which includes semiconductor capital equipment for etch, rapid thermal processing, deposition, chemical mechanical planarization, metrology and inspection, wafer packaging, and ion implantation; Applied Global Services, which provides integrated solutions to optimize equipment and fab performance and productivity; Display and Adjacent Markets, which includes products for manufacturing liquid crystal displays, organic light-emitting diodes, upgrades and roll-to-roll Web coating systems and other display technologies for televisions, personal computers, smart phones and other consumer-oriented devices, and Corporate and Other segment, which includes revenues from products, as well as costs of products sold for fabricating solar photovoltaic cells and modules, and certain operating expenses.
  • Amazon.com, Inc. [stckqut]AMZN[/stckqut]
    • Amazon.com, Inc. offers a range of products and services through its Websites. The Company operates through three segments: North America, International and Amazon Web Services (AWS). The Company's products include merchandise and content that it purchases for resale from vendors and those offered by third-party sellers. It also manufactures and sells electronic devices. The Company, through its subsidiary, Whole Foods Market, Inc., offers healthy and organic food and staples across its stores. The Company also offers a range of products like whole trade bananas, organic avocados, organic large brown eggs, organic responsibly-farmed salmon and tilapia, organic baby kale and baby lettuce, animal-welfare-rated 85% lean ground beef, creamy and crunchy almond butter, organic gala and fuji apples, organic rotisserie chicken.
  • Arista Networks Inc [stckqut]ANET[/stckqut]
    • Arista Networks, Inc. is a supplier of cloud networking solutions that use software innovations to address the needs of Internet companies, cloud service providers and data centers for enterprise support. It develops, markets and sells cloud networking solutions, which consist of its Gigabit Ethernet switches and related software. The Company's cloud networking solutions consist of its Extensible Operating System (EOS), a set of network applications and its Ethernet switching and routing platforms. The programmability of EOS has allowed it to create a set of software applications that address the requirements of cloud networking, including workflow automation, network visibility and analytics, and has also allowed it to integrate with a range of third-party applications for virtualization, management, automation, orchestration and network services. EOS supports cloud and virtualization solutions, including VMware NSX, Microsoft System Center and other cloud management frameworks.
  • Alibaba Group Holding Ltd [stckqut]BABA[/stckqut]
    • Alibaba Group Holding Limited is a holding company. Through its subsidiaries, the Company is engaged in online and mobile commerce through offering of products, services and technology that enable merchants, brands and other businesses to transform the way they market, sell and operate in the People's Republic of China (China) and internationally. Its businesses consist of core commerce, cloud computing, mobile media and entertainment, and other innovation initiatives. Through investee affiliates, it also participates in the logistics and local services sectors. Retail commerce in China operated by the Company includes the China online commerce destination (Taobao Marketplace); the China third-party platform for brands and retailers (Tmall), and the sales and marketing platform for flash sales (Juhuasuan). Wholesale commerce in China operated by the Company includes the China domestic wholesale marketplace (1688.com) and the wholesale marketplace for global trade (Alibaba.com).
  • Installed Building Products Inc [stckqut]IBP[/stckqut]
    • Installed Building Products, Inc. is a holding company. The Company is a residential insulation installer in the United States. As of December 31, 2016, the Company's national platform included over 100 locations accessing customers in 48 continental states and the District of Columbia. The Company also installs complementary building products, including garage doors, rain gutters, shower doors, closet shelving and mirrors, which provides cross-selling opportunities to supplement the insulation installation business. The Company manages various aspects of the installation process for the customers, from the direct purchase and receipt of materials from national manufacturers, to supply of materials to job sites and quality installation. The Company's customers include production and custom homebuilders, multi-family and commercial contractors, and homeowners.
  • LGI Homes Inc [stckqut]LGIH[/stckqut]
    • LGI Homes, Inc. is a homebuilder and land developer. The Company is engaged in the design, construction, marketing and sale of new homes in markets in Texas, Arizona, Florida, Georgia, New Mexico, South Carolina, North Carolina, Colorado, Washington and Tennessee. The Company operates through five segments: the Texas division, the Southwest division, the Southeast division, the Florida division and the Northwest division. The Texas division includes homebuilding operations in Houston, Dallas/Fort Worth, San Antonio and Austin locations. The Southwest division includes homebuilding operations in Phoenix, Tucson, Albuquerque, Denver and Colorado Springs locations. The Southeast division includes homebuilding operations in Atlanta, Charlotte and Nashville locations. The Florida division includes homebuilding operations in Tampa, Orlando, Fort Myers and Jacksonville locations. The Northwest division includes homebuilding operations in Seattle location.
  • Lam Research Corporation [stckqut]LRCX[/stckqut]
    • Lam Research Corporation is a supplier of wafer fabrication equipment and services to the semiconductor industry. The Company designs, manufactures, markets, refurbishes and services semiconductor processing systems that are used in the fabrication of integrated circuits (ICs). It operates through manufacturing and servicing of wafer processing semiconductor manufacturing equipment segment. Its products are designed to enable its customers build a range of devices that are used in a range of electronic products, including cell phones, tablets, computers, storage devices, and networking equipment. Its customer base includes semiconductor memory, foundry, and integrated device manufacturers (IDMs) that make products, such as dynamic random-access memory (DRAM), negative-AND (NAND) memory and logic devices. It offers a portfolio of products that are used in several areas of the semiconductor manufacturing process flow, including thin film deposition, plasma etch and single-wafer clean.
  • Micron Technology, Inc. [stckqut]MU[/stckqut]
    • Micron Technology, Inc. is engaged in semiconductor systems. The Company's portfolio of memory technologies, including dynamic random-access memory (DRAM), negative-AND (NAND) Flash and NOR Flash are the basis for solid-state drives, modules, multi-chip packages and other system solutions. Its business segments include Compute and Networking Business Unit (CNBU), which includes memory products sold into compute, networking, graphics and cloud server markets; Mobile Business Unit (MBU), which includes memory products sold into smartphone, tablet and other mobile-device markets; Storage Business Unit (SBU), which includes memory products sold into enterprise, client, cloud and removable storage markets, and SBU also includes products sold to Intel through its Intel/Micron Flash Technology (IMFT) joint venture, and Embedded Business Unit (EBU), which includes memory products sold into automotive, industrial, connected home and consumer electronics markets.
  • Netflix, Inc. [stckqut]NFLX[/stckqut]
    • Netflix, Inc. is a provider an Internet television network. The Company operates through three segments: Domestic streaming, International streaming and Domestic DVD. The Domestic streaming segment includes services that streams content to its members in the United States. The International streaming segment includes services that streams content to its members outside the United States. The Domestic DVD segment includes services, such as digital optical disc (DVD)-by-mail. The Company's members can watch original series, documentaries, feature films, as well as television shows and movies directly on their Internet-connected screen, televisions, computers and mobile devices. It offers its streaming services both domestically and internationally. In the United States, its members can receive DVDs delivered to their homes. The Company had members streaming in over 190 countries, as of December 31, 2016.
  • NVIDIA Corporation [stckqut]NVDA[/stckqut]
    • Nvidia Corporation focuses on personal computer (PC) graphics, graphics processing unit (GPU) and also on artificial intelligence (AI). The Company's operates through two segments: GPU and Tegra Processor. The Company's GPU product brands are aimed at specialized markets, including GeForce for gamers; Quadro for designers; Tesla and DGX for AI data scientists and big data researchers; and GRID for cloud-based visual computing users. The Company's Tegra brand integrates an entire computer onto a single chip, and incorporates GPUs and multi-core central processing units (CPUs) to drive supercomputing for mobile gaming and entertainment devices, as well as autonomous robots, drones and cars. The Company's processor has created platforms that address four markets: Gaming, Professional Visualization, Datacenter, and Automotive. The Company's offerings include NVIDIA DGX AI supercomputer, the NVIDIA DRIVE AI car computing platform and the GeForce NOW cloud gaming service.
  • Transportadora de Gas del Sur SA (ADR) [stckqut]TGS[/stckqut]
    • Transportadora de Gas del Sur S.A. is engaged in the transportation of natural gas and production and commercialization of natural gas liquids (Liquids). The Company operates through four segments: Natural Gas Transportation Services, Liquids Production and Commercialization, Other Services and Telecommunications. The Company's pipeline system connects gas fields in southern and western Argentina with gas distributors and industries in those areas and in the greater Buenos Aires area. It also provides midstream services, which consist of gas treatment, removal of impurities from the natural gas stream, gas compression, wellhead gas gathering and pipeline construction, operation and maintenance services. The Company transports gas through approximately 5,675 miles of pipeline, of which it owns 4,745 miles. It operates the remaining 930 miles, which are owned by the Gas Trusts.
  • TriNet Group Inc [stckqut]TNET[/stckqut]
    • TriNet Group, Inc. is a provider of human resources (HR) solutions for small to medium-sized businesses (SMBs). The Company's HR solutions include services, such as multi-state payroll processing and tax administration, employee benefits programs, including health insurance and retirement plans, workers' compensation insurance and claims management, employment and benefit law compliance, and other services. The Company provides an HR technology platform with online and mobile tools that allow its clients and their worksite employees (WSEs) to store, view and manage their HR-related information and conduct a range of HR-related transactions anytime and anywhere. The Company's HR products and solutions include capabilities, such as technology platform, HR expertise, benefits and compliance. The Company's clients are distributed across a range of industries, including technology, life sciences, financial services, property management, retail, manufacturing and hospitality.

My typical disclaimer says that I may or may not have a holding of the stocks discussed in this article. This would be a bit misleading for this particular article. You can assume that I am currently invested in every one of these stocks at the time of this writing.

The glass globe image at the top of this article is courtesy of suphakit73 at FreeDigitalPhotos.net