There’s no doubt the markets have been in tumult since August, if you actually look back. It started with the tech sector, as high-growth stocks like chipmakers started getting hit with concerns over Q3 and Q4 numbers. Much of that had to do with the markets anticipating the implications of a U.S.-China trade war.
And while that story made the financial news, the broad market was all right, the economy was chugging along (even as interest rates rose), consumers were spending and there was hope that a political deal would be cut to tamp down a trade war.
But then the trade war and the tit-for-tat tariffs began, and this started to have implications across the entire market. Companies were starting to warn of weaker Q4s. Trade talks vanished and interest rates continued to rise.
Whether this is sector rotation or a correction or just a pause that refreshes, these 10 high-growth stocks with strong fundamentals here are great buys and still some of the highest-rated stocks my Portfolio Grader reports.
Fortinet (NASDAQ:FTNT) is in one sector that will never be threaten by economic transition and trade issues. Sadly, its specialty is regularly making headlines.
FTNT is one of the leading cybersecurity companies in the world. Think about the announcement from Marriott (NASDAQ:MAR) that it had more than half a billion accounts hacked over a period of years. The attackers got sensitive consumer information including credit cards and passport numbers. Dedicated and diligent cybersecurity is not an option in today’s world, it’s a must.
While the massive size of that hack and the reputation of the company made this is huge story, hacks are happening with increasingly regularity and companies are constantly reminded that building a security platform — and listening to it — is crucial.
FTNT stock came in with strong earnings in early November. The stock sold off on the news, but it’s up 67% year to date, which is a testament to its powerful position in the sector.
Amazon.com (NASDAQ:AMZN) is one of the legendary FAANG stocks — Facebook(NASDAQ:FB), Apple (NASDAQ:AAPL), Amazon, Netflix (NASDAQ:NFLX), Google/Alphabet (NASDAQ:GOOGL) — that have been targets of selling in the past few months.
And it’s true, most have suffered some selling. AMZN is down 15% in the past three months. It also no longer has the largest market cap.
What’s more, a lot of articles are being written about the end of the FAANG stock reign. They talk about how they’re overvalued — AMZN is trading at a trailing P/E of 93 — and their reckoning is nigh.
Take a breath. AMZN remains a juggernaut in e-commerce, cloud computing and entertainment. Its place in consumers’ consciousness is steadfast. And AMZN stock, even after its selloff, is still up 42% year to date.
BP PLC (BP)
BP (NYSE:BP), formerly known as British Petroleum, a state-sponsored oil company that was influential in the early days securing oil from the Middle East, remains one of the largest oil firms in the world.
It has more recently become known as the company that owned the rig that caused the biggest oil spill in the history of Gulf of Mexico oil development (and the No 2 oil spill of all time).
But in this market, integrated oil companies are in a strong position. Their upstream can benefit from increasing energy demand and their downstream is staying busy distributing, refining and selling products to the markets.
It’s off 6% in the past three months, which puts it slightly underwater year to date, but its 6%-plus dividend lifts it back up again. And rumors of an OPEC-Russia production cut could see its fortunes reverse quickly.
Netflix is another one of the FAANG stocks — and like AMZN, is trading with a P/E near 100. In this market that may seem insane. Those are dotcom bubble valuations.
But the fact is, NFLX is generating significant growth and aside from one blip in subscriber numbers this year, it is still killing it, quarter after quarter. And the next new market is India, the second most populous market in the world. One with a huge appetite for content, where a NFLX could really add value.
Perhaps more important is the fact that NFLX also recently stated that it’s not going to make move into China just yet. That allows NFLX to focus on India and not overextend itself.
Salesforce.com (NYSE:CRM) used its ticker to remind everyone what it is all about — customer relationship management.
Basically, CRM stock was a pioneer in building a cloud-based model for enterprise level customers so that they could integrate and automate their marketing, customer service and sales forces. Salesforce allows complete visibility of a customer’s account so that each person can follow the client journey and step in when there’s an opportunity or an issue.
And CRM remains a significant player in this growing sector, as more companies see the advantages of scaling their businesses. Just last week, in the midst of all this market madness, CRM had its best day in 3.5 years. That a big vote of confidence.
Up 34% year to date, CRM is a high-growth stock that sells at a premium, but it’s well deserved.
ConocoPhillips (NYSE:COP) has been in the oil and natural gas business since 1875. It has seen a few things over that time. Ulysses S. Grant was president. The first Kentucky Derby was run. Since then, the U.S. has been in and out of more than a half dozen panics, recessions and depressions — and COP is still kicking.
The point is, this is a company that has thrived in a volatile industry for 143 years.
COP stock is well diversified around the world and also has a good mix of oil and natural gas properties, so it’s not over-weighted in any one sector.
COP stock is up 21% year to date, even through this wild ride in the oil markets. And its rise has been steady — even the volatility in the energy patch didn’t hit this high-growth stock.
CSX Corporation (NYSE:CSX) is one of the largest rail-based transportation companies in the U.S. Going all the way to its beginnings in 1827, CSX has merged and acquired other rail lines since the 1980s and now is a dominant force in the industry.
The Dow Theory was developed from the writings of Charles Dow, founder of the Wall Street Journal and the Dow Jones Industrial Average. And one of its core tenants was that you could gauge the health of the economy by looking at the relationship between the Industrials and the Transports. If orders were coming into factories, then the transports would be busy taking orders from the factories to the stores. If transports were slowing, it meant industrial orders were slowing.
While the economy is a bit more complex today, a consumer driven economy can still rely on transport performance to give some indication of economic health.
CSX is up 25% year to date and is still trading at a trailing P/E of 9.
Enterprise Products Partners (EPD)
Enterprise Products Partners (NYSE:EPD) is a limited partnership that operates in the midstream energy market.
To unpack that a bit, a limited partnership structure means that investors are treated like owners, so the company’s net income is distributed to shareholders in the form of a dividend. These are usually high-dividend-paying stocks because of this structure.
The midstream sector of the energy market is basically pipelines. EPD owns an extensive network of U.S. pipelines that move oil and natural gas to and from fields, storage tanks, refineries, etc.
The midstream sector is more effected by demand than energy prices since it charges by volume through its pipes rather than by commodity prices. That means when demand is growing, its volume grows and its profits grow.
EPD stock is treading water right now, but the high-growth stock is delivering an attractive 6.5% dividend to pay for your patience until the energy patch settles down.
Ecopetrol (NYSE:EC) is Colombia’s leading integrated oil company and one of the country’s few local companies that trades on the U.S. markets. It’s also among the star high-gowth stocks in the market right now.
With an $800-plus-million market cap, this is a significant player in the South American energy patch. And it’s a focused play on strong long-term comeback of the Colombian economy.
Colombia’s economy is growing around 2.7% this year, but its economy is in much better shape than most of its neighbors, like Venezuela and Brazil. Plus, it has a very good relationship to the U.S., where it can export much of its oil for refining and sale.
Domestically, the middle class is growing at a good clip and its internal divisions and drug cartel corruption are winding down significantly. EC stock is up 36% year to date and delivers a 3.3% dividend. It will be more volatile than similar sized-U.S. firms, but have much larger growth potential.
Progressive (NYSE:PGR) is one of the top three U.S. auto insurers. And this remains a very good market for property & casualty (P&C) insurers. Because insurers hold a great deal of their premium payment in cash or cash equivalents like U.S. Treasury Bonds and Notes, rising interest rate can be a real help to their bottom line.
What’s more, PGR has stronger operating margins than its competition, so it can be more competitive when it comes to rates, which is certainly a growth advantage.
Part of its margin advantage comes from the fact that it has always looked to allow technology to help make better decisions about premium pricing for its customers. Its real-time driving app is a classic example of how it learns more about its drivers and can use that to adjust pricing.
Up 15% year to date, PGR is a great long-term, high-growth stock that can sail through any market.