Here're The Top Stock Trades For 2020

Stocks are getting a beating today after a top Iranian general was killed in a U.S. airstrike at Baghdad’s airport. But that’s just a blip. After all, stocks have done pretty well in recent times and are sure to continue to do so this year as well. And why not? Investors have enough reasons to be optimistic about the stock market this year.

President Trump has announced a possible “phase one” partial deal with China. And if the negotiations go well at the beginning of 2020, business confidence will improve, driving capital expenditure and in turn stocks.

And as consumer outlays remain healthy, led by record low unemployment rate, investors should expect the economy to continue to expand this year. What’s more, the current low-interest environment should make the cost of borrowing manageable, helping companies invest and grow. This in turn should help the economy gain momentum.

Given the positives, investors shouldn’t steer clear of stocks this year. In fact, one should look for potential avenues to invest as the economy gathers momentum. Let’s take a look —

Biggest Contributor to Dow in 2019 – Apple

Apple Inc. (NASDAQ:AAPL) has contributed the maximum to the Dow’s total return in 2019. The Dow rose 22.3% in 2019, its best annual gain since 2017. Meanwhile, Apple has gained more than 80%. But does this mean Apple has less room to run this year. Certainly not! Apple’s expected earnings growth rate for the current quarter and year are still a solid 7.9% and 9.9%, respectively.

The iPhone maker will continue to benefit from momentum in its non-iPhone businesses, particularly Services and Wearables, strong adoption of Apple Pay and growing Apple Music subscriber base. In the wearable space, Apple Watch continues to dominate the global smartwatch market. After all, Apple Watch’s market share surged to 48% in the third quarter of 2019 from 45% in the second quarter. Notably, the company expects to be a market leader in the wearables segment heading into 2020 after it recently released AirPods Pro, known for its noise-canceling features.

Needless to say, the company has done so well in 2019 that its goal of $51 billion in services revenues is much within the reach. Apple’s service revenues had grown to $46.29 billion, as of the third quarter. Apple currently flaunts a Zacks Rank #2 (Buy).

Marijuana Industry Will Grow in 2020 and so Will Aphria

Let’s admit that the marijuana industry’s success is dependent on regulatory procedures. And marijuana legalization has already started to ramp-up in several U.S. states. What’s more, legalization of marijuana in the state of Illinois in January could bring positive tidings for the marijuana industry. President Trump’s initiative toward full-scale marijuana legalization, in the meantime, might lead to the legalization of marijuana in more states.

These developments certainly bode well for Aphria Inc (TSX:APHA) that produces and sells medical cannabis. Individually, the company has been one of the few bright spots in the industry. It registered profits in its last two reported quarters. In fact, in the last reported quarter, its sales jumped nearly 850%, which is definitely a rarity among marijuana stocks. And there is still plenty more room for the company to grow this year, as it recently obtained a cultivation license that will more than double its production capacity. Aphria currently possesses a Zacks Rank #1 (Strong Buy). In fact, the company’s expected earnings growth rate for the next quarter is a whopping 106.7%. You can see Zacks Investment Research

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Written By: Zacks Investment Research