Nick’s Top Stock Picks

At the time of writing this, US equities are sold off somewhere in the region of 30% off of the highs. With this dip, I am personally interested in buying 10 select stocks in a long term portfolio, and adding the positions over time. I will be tracking my portfolio on YouTube, on my channel “TraderNick”. Below you will find my top 10 stock picks, as well as my reasoning behind the investment. Please note, none of this is investment advice but rather me sharing my opinion on a handful of companies I like.

Alphabet Inc. (GOOGL)

P/E:

Forward P/E:

As the world becomes more and more active online, so will digital ad spending. Alphabet Inc. is the top market leader for providing a platform for selling ads, between their search engine and YouTube.

As an owner of a YouTube channel, where I make a portion of my income, Alphabet earns roughly half of all ad revenue my channel produces. Multiply this by a massively growing audience on YouTube, and millions of successful creators, you’ve got quite the platform for selling advertisements.

Artificial intelligence is also a huge part of Alphabet’s business model. They are currently testing the water of self-driving cars, and their advertising uses user activity to specifically target ads to their users.

Technicals: Price on the weekly chart is not quite to the overextended RSI levels, at which I would be very interested in buying a position near the $1000 area, which lines up with some long term support historically.

TESLA (TSLA):

Tesla is one of my favorite companies, and also probably going to be one of my most controversial picks. To me, this company is less about selling cars and more about the underlying nature: disruption.

This company is led by one of the most controversial and disrupting characters in the world of investing: Elon Musk. Regardless of your thoughts of him, he does have an impressive track record of making things happen and delivering, and I believe he is a visionary of our time. Call him a dreamer, but sometimes you need a JFK to get to the moon.

The next reason, is because I love their cars. They are sleek, intelligent, next generation, and luxurious vehicles. The electric vehicle market is something new, and Tesla has pushed its way into the automotive industry, which is a tough table to get a plate at.

Recently, Tesla posted their first really positive earnings, sending the stock soaring. In current market environments, the market has sold off Tesla quite a bit, and this discount interests me.

With the potential of self driving cars in the future, ride sharing cars could severely cut costs, and tesla stands to potentially gain huge from this. My bet on this company is a bet that they don’t go bankrupt borrowing their way into the automotive industry, a bet on electronic vehicles, AI, and Elon Musk.

Dividend Yield: 0%

Risk Level: High

Technicals: With the recent rise, I have held off on buying this stock for fear of chasing (thank goodness…) but am becoming more interested as price sells off amid market turmoil. I would be interested at buying some at the 61.8% retracement, as well as adding potentially more on the way down, and at the 78.6% retracement.

The Walt Disney Company (DIS)

I love this company for their innovation, and their non-stop ability to produce captivating stories that sell out theaters, and subscriptions to their online services.

Disney Plus is a serious competitor to Netflix, in my opinion. Disney can do all of their story telling inside, and has completely pulled their content off of other platforms, putting a very affordable price tag on their own exclusive content platform.

Stories that have been written in the past provide Disney with an extensive library to “remaster” and sell in theaters. For example, Mulan comes out this year and is likely to do incredible in the box office. This model is repeatable, and competitors like Netflix don’t have this long history to draw from.

P/E Ratio: 17.8

Dividend Yield: 1.66%

Technicals: As DIS sells off, the RSI is becoming overextended on the weekly chart, and testing a major support level in the 93.95 dollar per share area. I am interested in buying near current levels.

Delta Airlines (DAL)

Delta airlines is the leading airline service in the United States, and as air travel grows year after year, delta’s large fleet of planes will likely to expand their profits. They continue to add new routes to their flight lines, and will likely rebound strongly once the corona virus situation calms down.

The only real concern I have with delta is their capital intensive business model, which poses an issue with the lack of revenue in the short term due to the medical crisis. Just a few added months of slowed air travel would put them even further behind in 2020 revenue.

Regardless, my long term outlook on this company is bullish, with a very low price to earnings ratio. I think the reward heavily outweighs the risk.

McDonalds (MCD)

McDonalds has grown their net profit year after year, and continues to dominate in the restaurant industry. They continue to build restaurants all over the world, each one adding to their bottom line.

Additionally, McDonalds actually stands to gain big from AI and technology going into the future. Employees are an expensive part of their business model, and replacing them with kiosks could be a massive money saver.

Their innovation in the fast food industry has continued since their early days, consistently making improvements to their business.

One concern with this company is the potential decline due to people choosing healthier options. McDonalds has done a decent job at tackling this with some of their healthier options, and will likely continue to adjust with the trends.

Their restaurants have also been drastically improved. No longer are they trashy locations to grab a greasy burger. Nowadays the new buildings are clean and pristine, as opposed to other fast food joints that have been slow to make any changes to their locations.


Summary:

  • GOOGL (15% of portfolio) – 0% Dividend
  • AAPL (10% of portfolio) – 1.34% Dividend
  • DIS (10% of portfolio) – 2% Dividend
  • FB (10% of portfolio) – 0% Dividend
  • JNJ (10% of portfolio) – 3.17% Dividend
  • JPM (10% of portfolio) – 4.31% Dividend
  • MCD (10% of portfolio) – 3.37% Dividend
  • DAL (10% of portfolio) – 7.54% Dividend
  • TSLA (10% of portfolio) – 0% Dividend
  • ISRG (5% of portfolio) – 0% Dividend

Published by TraderNick

With a background in computer science and a love for financial markets, Nick is the lead market analyst, software developer, and founder of the TraderNick team.

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