Falling Oil, Rise in Consumer Confidence and low interest rates will make for a profitable 2015
Sure it is only the beginning of November, but the financial landscape is shifting and now is the time to get into your holdings for 2015. Below are our top stocks for 2015.
The theme for 2015 is falling oil prices, an above-average jobs report, gridlock in Washington and the fact that the Federal Reserve has pretty much told us when to expect an interest rate increase.
What does all of this mean? The market has very little uncertainty right now and consumers will have more money in their pockets – this spells success for stocks.
We also think we’ll see the auto makers make some nice gains. When fuel prices go down, the sales of SUVs goes up and that means bigger profits for our auto makers.
Industries In Which To Invest for 2015
With the fall of oil and rise in consumer confidence, we’re going to be focused on the following sectors for 2015
Airline Stocks for 2015
We think the airlines will see a nice boost. They had to increase prices in the past due to rising oil prices, however when oil falls and fuel gets cheaper, don’t expect those airlines to lower their fares because they won’t. They’ll just be operating on higher margins, running more flights and raking in the profits.
American Airlines (AAL)
We expect American Airlines to soar and reach new highs. They are by-far the best run airline in the bunch and. Currently trading around $42, this stock could be poised for 50% or greater returns in 2015.
Virgin America (VA) – speculative
Virgin American is scheduled to go public in November 2014 and if you can get in at near the IPO price, you may have a winner here. Look for public trading to begin in November and pull the trigger if you can get in below $24.
Retail Stocks For 2015
Lower fuel prices for the consumer means more money to spend in our favorite retailers. We’ve already seen a bump in some names like Target and Walmart and expect these increases to carry forward through the end of 2014 and 2015.
Under Armour (UA)
Under Armour has been one of the best performers in 2014 and we do not see it slowing down. It is up nearly 60% YTD in 2014 and with a strong retail forecast for 2015, look for Under Armour to have another spectacular year.
Alibaba Limited (BABA) speculative
Alibaba is your Amazon of China, but actutal earnings growth. Alibaba just came public in September 2014 and went on a tear at the end of October and early November when they hit their numbers and projected 40% growth.
Shares are currently trading at $114 with many analysts predicting it to close 2014 @ $120 and then hit $150 shortly into 2015. If Alibaba can reach the $120 mark, it will be trading at the same valuation as Facebook (FB) but with a much higher predicted growth rate.
As a speculative play, it is a no-brainer to get into Alibaba now and go along for the ride. Alibaba may be a long-term hold as they have strong mobile numbers, currently only serve less than 1/2 of China’s population and are expanding into other countries.
This could be a “stuff it in a drawer” and look at it in 5 years type of stock – it has that much potential!
Other Notable Retail Stocks for 2015
- Foot Locker (FL)
- Target (TGT)
Housing Stocks for 2015
Not too many people are talking about the housing market yet, and that’s just fine because it is going to have a break-out year in 2015. Lower gas prices means people are willing to commute further into work – which, in turn, makes developments in the suburbs attractive.
Couple that with the recent news that Fannie Mae is going to be easing lending restrictions and we have the formula for a spark in the housing market.
D.R. Horton (DHI)
The biggest home builder in the US should have a nice rise in 2015 if the housing market rebounds like we think it will.
Home Depot (HD)
Not an actual builder, but definitely tied to a boom in the housing market.
Automotive Stocks for 2015
General Motors (GM)
As far as the automotive stocks for 2015, we’re going to stick to one company and that is GM. GM has been beaten down for the past few quarters, but we think they are poised for a rebound in 2015. Currently trading at around $31/share, some analysts have a $49 12-month price target on GM – that represents a nearly 66% return! Along with a possible high return in 2015, GM also pays a healthy dividend.
Risks with GM include additional recalls.
Speculative Stocks for 2015
Twitter Inc (TWTR)
2015 could be the year we see Twitter turn into a real company. We think Twitter is currently undervalued at $40/share which it is currently trading around, however, we don’t really see this stock going any higher until they get a new CEO that can provide some real direction for this company.
Twitter is sitting on a gold-mine of user generated content and they are not capitalizing on what they have. A new CEO I think will give this stock a huge pop and make it a break-out stock for 2015. We put it in the speculative category since the only way I think we see some huge upside is with the change of management.