We are now rolling into Q4 2017 and the new year is just around the corner. Now is the time to start preparing your portfolio for 2018, so what are some of the best “smart money stocks” to buy that will line you up for 2018 in style?
I set out to pinpoint the two smartest buys in the market right now. I wanted to find stocks that have a glowing future ahead — in both the short- and long-term.
To do this, I turned to TipRanks’ innovative ‘Most Recommended Stocks‘ tool. Top-recommended stocks are selected based on a TipRanks’ developed formula, factoring in ratings made by the best performing analysts.
These are the analysts that have the highest success rate and average return. The best part is that you can order the results by upside potential — a crucial factor in assessing a stock’s growth potential. I also scanned the stocks to ensure that they have an overall ‘Strong Buy’ analyst consensus rating, making these stocks the smartest smart-money buys around.
Now let’s take a closer look at two stock picks for 2018:
Smart Money Stocks to Buy: Micron (MU)
This exploding semiconductor stock has just reported another very robust quarter of earnings. As a result Micron Technology, Inc. (NASDAQ:MU) still has plenty of upside left even though it is trading at near-record prices. Goldman Sachs even says Micron ‘looks cheap’ at its current share price of $38.
Indeed, Micron has one of the best stock ratings out of all the 5,000-plus stocks on TipRanks. In the last three months, 19 out of 21 analysts have rated MU a ‘buy’. These analysts are predicting that in the next 12 months, Micron will reach $49 — a 33% upside from the current share price.
Five-star Needham analyst Rajvindra Gill believes the stock can climb by an eyebrow-raising 106% in the next year. Gill ramped his price target by $26 to $76 on Sept. 27. The analyst, who is ranked 28 out of 4,660 analysts on TipRanks, explains:
“We believe this multiple is reasonable as we are simply applying a median historical multiple on a discounted earnings run-rate of $2.16 EPS /q (Nov. guidance). Currently, the stock is trading at a trough multiple on the perception of a “peak earnings cycle”. We assert it should be trading at a market multiple on ongoing earnings growth. We don’t believe we are at the peak of the cycle as end markets for DRAM are significantly more diverse than in years past; stabilizing the volatility of the pricing and perhaps lengthening the contracts.”
Smart Money Stocks to Buy: Alibaba (BABA)
So it is no surprise that the stock has the double-whammy of strong Street support and big upside potential. In the last three months, Alibaba Group Holding Ltd (NYSE:BABA) received 14 straight buy ratings indicating a bright future for this fast-growing stock. These analysts predict that BABA can reach $195 in the next 12 months (14.4% upside from the current share price).
Chinese e-commerce giant Alibaba has soared by 80% since the start of the year. BABA, which now has a market cap of over $470 billion, is benefiting from the rapid increase in the Chinese middle and upper middle classes. Consulting firm McKinsey calculates that urban consumer spending in China ( online sales + Brick & Mortar sales) will more than double from $1.5 trillion in 2012 to $4 trillion.
Only recently, on Sept. 26, Wells Fargo analyst Ken Sena came out with BABA’s highest price target yet of $225 (31% upside potential). Sena is a top analyst to trust with a 75% success rate and 16% return across his BABA ratings. Meanwhile, MKM Partners’ Rob Sanderson says BABA can reach $220 as it has the best fundamentals out of all the internet mega caps.