1) Alibaba IPO – $200-300 Billion Valuation
This Chinese ecommerce company will IPO in August or September of this year. When it does, it’s expected to have one of the largest valuations in IPO history. They own T-Mall, which is the “Amazon” of China. But like all things in China, multiply the scale by 10. Watch for other large Chinese companies to do IPO’s in the US. This isn’t one you can “technically” buy right now. They should be debuting in the fall.
2) Yahoo – Alternative Alibaba Play
It’s likely that Yahoo’s stock price is cheaper than what Alibaba will debut as. That is why many smaller investors may want to invest in Yahoo to leverage the hype around Alibaba. (Yahoo owns a considerable stake in Alibaba). But if you do that, you may want to use it as a short term play. The underlying business of Alibaba is very strong. But I can’t say the same for Yahoo. Yahoo may actually sell their stake and make acquisition plays with the cash. But Yahoo is unclear and really without clear vision. Just because they have cash to buy up companies doesn’t mean their pick the right ones or even leverage them properly. It seems likely that Yahoo will enjoy a boost from Alibaba’s IPO, but don’t count on it last long. And don’t think that Yahoo and Alibaba will track each other in stock performance.
3) Apple (AAPL) – I know, I know, everyone says you should invest in Apple. But there’s a real good reason for it. There is a ton of momentum in this company. There are millions of iPhone users waiting for the iPhone 6 release to upgrade. That’s going to mean massive orders for Apple when this new smartphone comes out. Watch for the price of this stock to skyrocket once that happens. Also, they took a dip when the announced their new iOS and they didn’t announce an iWatch. But when they announce new hardware, look for it to bounce back and rise. For a value investor, this is as “value” as Apple is going to get.
4) Fannie Mae (FNMA) – 1,000% Return
At the 19th Annual Sohn Conference, Bill Ackman, CEO of Pershing Square Capital, made a bold prediction that Fannie Mae would give a 1000% return. Fannie Mae is currently trading at around $4 a share. He sees $23-47 in the stock’s future betting on a housing recovery in the US.
Ackman is more recently famous for his attack/short on multi-level marketing company Herbalife.
5) Amazon (AMZN)
Ecommerce (the business of buying stuff online) is growing faster than the retail sector overall. This industry is growing at about 15% a year compared to 2-3% growth in the US economy as a whole.
Amazon’s sales is growing even faster than the general ecommerce industry. It doesn’t take a genius to know that more and more people are buying stuff online rather than going to traditional brick and mortar stores. That trend is only going to increase. And you’ve probably bought more stuff on Amazon this year and previous years. That’s only going to continue as well, making Amazon a great buy!
In addition, they are also in the cloud services business (Amazon Web Services) and continue to enter other high volume, low margin businesses. With Amazon Fresh they will become a world-class grocer. And with their sprawling distribution centers, they may eventually take over shipping as well, infringing on UPS’s and Fedex’s territories.
6) eBay (EBAY)
Many people don’t know, but eBay almost as large a marketplace as Amazon. They had over 112 million active buyers last year. That means over 100 million people bought something on eBay in the last 12 months. eBay is no longer the world’s garage sale. You can still find great deals there, but many brands are listing on eBay.
7) Walmart (WMT)
As retail grows, so goes Walmart. There are very smart people over there and they will make sure that they are a top retailer. They are even starting their own online thing to compete with Amazon. They already have the branding of finding cheap stuff. Now they just need leverage for ecommerce.