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The $200 Club: Will Facebook Beat Alibaba There First?

I run a portfolio at Zacks called TAZR Trader, which stands for Technical Analysis plus the Zacks Rank.

Every week I screen for stocks that get the top grades from the Zacks Rank for their earnings momentum and then I analyze the chart and institutional sponsorship for the stock.

Four names that passed the test early this year I’ve actually held onto for a while. And I plan to keep holding on to core positions while trading their swings… all the way to $200 during this bull market.

There’s a video attached to this article with all their charts and the prime buying zones you want to be watching.

But if you just want to read about them first, along with my rationale for their unstoppable profit and price trends, here are the 4 stocks that make it into my $200 Club…

Align Technology (ALGN): The maker of the Invisalign clear “teeth straighteners” continues to take the world, thousands of smiles at a time. American dental professionals love the product and as more consumers become aware of the option, Align’s market share dominates.

Plus, the international growth should see 25%+ for years to come. Just think of the market potential for clear aligners in China and India!

Alibaba BABA: The Amazon of China just keeps surprising Wall Street with its growth in over a dozen business units, from ecommerce and the cloud to media and finance.

Jack Ma came to the US in June and invited small businesses to discover Alibaba as the gateway to selling their products and services to the largest middle class on the planet. Years of dominate growth lie ahead that will justify the valuation.

Lam Research LRCX: This premier “arms dealer” for chip makers is on a big roll because the demand for its wafer fabrication equipment (WFE) is almost beyond traditional cycles right now. By that I mean that the cloud, mobile, autonomous cars, and machine learning/automation are creating a secular wave of demand that will run well into 2019.

Speaking of machine learning and AI, I could easily argue that NVIDIA (NVDA) is headed to $200. But I sold too early and can’t justify an entry here above $160. So I say, buy the dips in the affordable Lam instead of chasing the pricey NVIDIA.

Facebook FB: This business model is so misunderstood by average investors. Zuckerberg and his teams copied what was working for Google with Adwords and created a whole new revolution for small business advertising. The ability to target and re-target very specific audiences and then have access to analytics that show you how to boost and maintain a positive ROI on your ad spend will grow the digital advertising juggernaut to over $38 billion in revenues this year.

And that growth is not stealing from Google – it’s simply expanding the pie of revolutionary global reach for tens of thousands of businesses, from the solo entrepreneur to the medium-size industrial, fashion or tech company.

Plus, this growth is going to get even harder to understand by this time next year when Facebook unveils its next software and hardware innovations to help consumers find more of what they want from advertisers by using augmented reality (AR) technology to shop, learn, share, and play. Zuck didn’t buy Oculus Rift VR technology for $2 billion just to entertain gamers.

And they didn’t hire the former chief engineer of DARPA, Regina Dugan, to create new space age toys for 2 billion monthly active users (MAU). They need to feed the advertising machine to keep Wall Street happy and they know it.

Something big is coming from Facebook. Mark my words.

For a broader discussion of this topic and how Apple is also “up to stuff” in their secret engineering labs, check out my recent podcast…

Why the Apple Ecosphere Could Own Augmented Reality

To see the 4 charts of the $200 Club, be sure to watch the video attached to this article.

And be sure to buy the dips in these stocks. You will thank me later… maybe by this time next year.

Disclosure: I own shares of ALGN, BABA, LRCX, and FB for the Zacks TAZR Trader.

Kevin Cook is a Senior Stock Strategist for Zacks Investment Research where he followed Broadcom (formerly Avago) from $70 to.

 

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Alibaba Group Holding Limited (BABA): Free Stock Analysis Report
 
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Lam Research Corporation (LRCX): Free Stock Analysis Report
 
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