As an active money manager, I pride myself in finding stocks that I feel can outperform the market and in turn help me outperform for clients. The following are three growth stocks from three different market caps that have strong potential in 2018.
1) LARGE CAP IDEA: Amazon (Symbol: AMZN, current price $1162) – Of all the mega-cap growth stocks, Amazon still has the biggest potential because the retail market they are going after is $5 trillion. In addition, they are just getting started in many emerging areas such as machine learning and artificial intelligence. The company will continue to dominate cloud through Amazon Web Services, expand internationally, make strategic acquisitions and improve shipping costs, which will dramatically increase their profit margins. I feel Amazon will reach a $1 trillion market cap over the next 3-5 years, so this isn’t just a play for 2018.
2) MID-CAP IDEA: Nutanix (Symbol: NTNX, current price $35.06) – Goldman Sachs recently called Nutanix a “once-in-a-decade tech infrastructure story.” They are one of the fastest growing infrastructure software companies and their technology allows datacenters to run more efficiently. Years ago, companies were trying to consolidate servers but now they are trying to consolidate entire datacenters. Nutanix’s solution converges computing and storage resources into a single appliance and some of their customers include Google, Facebook and Amazon. The biggest challenge for investors right now are Nutanix’s lack of earnings, but they are cash flow positive and will have higher margins going forward as they shift their solution to a more software-based model. Their strong management team makes me feel the stock can be up +30-50% in 2018. From a technical perspective, I also like the IPO base its chart is forming.
3) SMALL-CAP IDEA: Seven Stars Cloud Group (Symbol: SSC, current price $2.45) – This is a very speculative play. It’s a Chinese company developing a platform that combines artificial intelligence, blockchain, cloud computing, and big data technologies to help businesses run more efficiently. I know these sound like all the cool “buzzwords,” but unlike some of the other speculative blockchain stocks, SSC has REAL revenues. They recently gave FY revenue guidance of $300 million and their new CEO took over SINA in 2002 when the stock was $1.50 before it ran to $40 in 18 months. If they execute their plan, I think this stock can see $8-10 in 2018 with a downside of $1.30 to $1.50. Again, this is a VERY speculative play.
The purpose of this blog post is idea generation. As much as I love to share ideas on social media, I strongly encourage people to do their own due diligence and PUT IN THE WORK! Full disclosure, I own these positions for clients but that is subject to change at any time. If you follow these ideas (or anything else on social media), please have a loss cutting policy in place and have a money management discipline based on your time frame and risk tolerance. Good luck!
I can be reached at: jfahmy@zorcapital.com.
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