Stock watch: 20 opportunities for 2020

Where can traders find value and opportunity next year? Opto trawled through analyst outlooks to bring you 20 stocks to watch in the new year.

1. AIA [78.400]
Shares in the Hong Kong-based insurer have leapt from HK$65 to HK$80.20 this year. The company plans to expand rapidly across China in 2020 (when restrictions on foreign ownership of life insurers are lifted) and take advantage of the growing number of middle-class consumers in the region.

2. Amarin [AMRN]
The Irish biotech stock will be worth closely monitoring as it awaits approval from the FDA on its expert-recommended heart drug Vascepa, which it claims could slash the number of heart attacks and strokes by lowering the amount of fats in people’s blood. Its $21.27 share price (at close on 29 November) could be set to soar.

3. ANA Holdings [9202.T]
Tokyo’s Olympic and Paralympic Games are scheduled to take place this summer –and hype around the event is expected to provide a boost in traffic and brand exposure for the country’s flagship airline, ANA.

4. AstraZeneca [AZN]
Revenues and earnings per share are set to perk up at drugs group AstraZeneca in 2020 after the trial success of new blockbuster treatments for heart failure and lung cancer. The stock closed 29 November at $48.48, near its all-time high achieved in October this year.

5. Beyond Meat [BYND]
It’s been a volatile year for the plant-based burger maker. Its shares rose from its $46 IPO price in May to an all-time-high of $234 in July, before plummeting back down to $82.96. But given rising consumer demand for meat-free alternatives, traders could return to the table. The company is aiming to achieve profitability by 2021.

6. Blueprint Medicines [BPMC]
Another ambitious bio-tech stock, this time from the US, is also expecting to get FDA approval for two of its drugs in the near future. One, Avapritinib, fights gastrointestinal stromal tumours, a type of stomach cancer. The second, Pralsetinib, is for the treatment of lung cancer. Its current share price, as of 29 November, is $77.13, while in the past three months Zacks consensus estimate has increased by 13.3%.

7. Burberry [BRBY]
As political unrest in Hong Kong begins to impact retailers, the luxury fashion group Burberry appears to be keeping its cool. In its most recent earnings, the company announced that its interim dividend would increase by 3%, and that interim pre-tax profits were up 11% to £193m. Analysts expect the good news to continue into 2020.

8. Goodman Group [GMG]
The share price for the Australian industrial property group has rocketed by more than 36% grown this year (as of 5 December’s close), helped by of all things, the continued boom in online shopping. The growth of the e-commerce sector is fuelling demand for centrally located distribution centres particularly in major cities such as LA.

9. Johnson & Johnson [JNJ]
The health care group’s shares have staggered along this year rising from $128.14 on the first day of the year to $139.38 at Wednesday 4 December’s close. Next year its share price could pop if the various lawsuits the business faces ­– related to the opioid epidemic and if its talc-based products can cause cancer – are ruled in its favour. Similarly, further uncertainty from Brexit and the ongoing US/China trade war could push investors into further in defensive consumer staples.

10. Lloyds Banking Group [LLOY.L]
Shares in the UK bank could pop from 4 December’s 60.71p if the UK can avoid a no-deal Brexit. It’s short-term gain and long-term pain for UK banking stocks – a post-election share price pop is expected, assuming Labour doesn’t win. However further into 2020 longer-term headwinds are likely to persist, for example, low-interest rates and structural challenges facing investment banks.

11. Luckin Coffee [LK]
China’s second-most popular coffee outlet after Starbucks added eight million new customers in Q3 and announced that it aims to break even next year. The company, which has burned through cash as it opens outlets across China, has announced its restaurants are now profitable. If it can also break even at a corporate level – as it intends to do by Q3 2020 – its shares could skyrocket.

12. Papa John’s [PZZA]
Shares in the pizza chain have melted from $86 in 2017 to settling into the mid-$40s in August of this year, following reports of racist behaviour from its (now ousted) CEO John Schnatter. Under new boss Rob Lynch, appointed in August, sales are up, debt has been cut and investment in franchises is set to improve customer experience. As of 4 December, its share price has crept its way back up to $60.20.

13. PepsiCo [PEP]
Most economists predict that the US could enter recession by the end of 2021. Traders will, therefore, need to keep an eye out for defensive stocks that can survive such a downturn. PepsiCo’s portfolio of fizzy drinks and snacks (which include brands such as Doritos) tend to do well during downtimes as consumers stick to staple goods. Gen Z – that are on the cusp of becoming one of the world’s largest consumer spending groups – are increasingly fans of its brands, while new low-calorie options are being favoured by the health-conscious.

14. Pinterest [PINS]
Following a disappointing earnings call on 31 October, shares in the social media image-sharing company have dropped 27% to $18.37 as of 4 December’s close. It posted a wider third-quarter loss, saw a slowdown in US monthly active users and revenue forecasts have disappointed. Traders are now asking if it’s time to buy the dip, as the company continues to increase its presence in international markets.

15. Roku [ROKU]
Shares in the US streaming provider have powered higher from $42 to hover around $161 in late November. As more players enter the market such as Disney and Apple, Roku retains one major competitive advantage – its devices can be used to watch all of these services. Therefore it could, potentially, see an upside from increased competition.

16. Restoration Hardware [RH]
The California-based home-furnishings company shocked with recent Q3 earning, surprising with $2.79 per share compared to the Zacks Consensus Estimate of $2.22 and beating last year’s $1.73 by 60%, according to Zacks Equity Research. The stock is up a staggering 71.6% YTD (through 4 December), while Zacks expects the stock to outperform the market in the near future.

17. Trupanion [TRUP]
Medical insurance for pets provider Trupanion has seen its fortunes grow recently, rising 28% YTD (through 4 December). A macro trend of pet ‘humanisation’ that seems unlikely to go away any time soon, plus solid results reported at the start of November – including a 27% year-on-year increase of quarterly revenues – hint at a positive 2020 for the company.

18. Uber [UBER]
Uber’s share price has not fared well since its May IPO, with shares currently down by around 30%. News on 25 November that it had lost its licence in London sent the ride-hailing company’s share price down a further 3% in pre-market trading, while recent quarterly earnings ­– which reported a loss of $1.2bn – have not helped matters. Some traders, however, say that now could well be the time to buy. Barclays Capital analysts estimate that the share price could double in 2020, as growth is expected in its food delivery and freight operations.

19. Vertex Pharmaceuticals Incorporated [VRTX]
Another biotech stock to watch, Vertex Pharmaceuticals is currently developing therapies for cystic fibrosis, while also engaging in the much-watched area of gene therapies. The stock is up 35.1% YTD (through 4 December) – outperforming the industry by more than 30% this year – while Zacks Consensus Estimate for its current-year earnings has crept up 5% over the past 60 days.

20. Volkswagen [VOW]
The German car firm may still be rebuilding trust (and paying fines) following the 2015 diesel exhaust scandal but hope that shares could puff higher come from its raft of new electric vehicles, such as the ID.3, and newly announced plans to become net-carbon neutral by 2050. A battery-powered Porsche may also be on its way.