(MP) Donald Trump’s November presidential election victory sent shock waves through the markets momentarily shaking financial stocks to their core. The dust has settled and in 2017, many believe internet stocks will offer the best room for growth.
“This sector is (largely) about innovation over infrastructure…code over cement…and we think this has been and will continue to be a good recipe for investors…and the economy,” analyst Mark Mahaney and his team at RBC Capital Markets recently named seven “core”
Internet stocks that will rock in 2017
1. (AMZN) – Amazon continues to be my Top Internet Stock because they are ruling e-commerce. AMZN stock peaked above $800 last year and is now trading around $740. With a market cap of $340 billion, there is a lot more upside to go but all pullbacks are a strong buy. Amazon.com, Inc. offers a range of products and services through its Websites. The Company’s products include merchandise and content that it purchases for resale from vendors and those offered by third-party sellers. The Company has three segments: North America, International and Amazon Web Services (AWS). The Company’s North America segment focuses on retail sales of consumer products from sellers and subscriptions, through its North America-focused Websites, such as www.amazon.com
2. (BABA) Alibaba core commerce business alone justifies a higher stock price and there is significant value in other assets. Alibaba stock is poised for a stellar 2017 based on its position in Ant Financial and its increased focus on emerging markets. Here’s what you need to know about BABA stock. The Trump administration can’t be as bad for Alibaba stock as it’s being made out. Analysts are finally seeing this, with a number of them recommending BABA stock recently. Analysts at Morgan Stanley recently said Alibaba stock is worth $130 a share. Just before that, SunTrust analyst Bob Peck said that BABA stock is worth $125. Instead of worrying about the incoming U.S. administration, investors should focus on the real strengths of Alibaba stock, some of which could make BABA have a stellar year in 2017.
3. (EXPE) – Expedia, Inc. is an online travel company. The company provides travel products and services to leisure and corporate travelers, including travel agencies, tour operators, travel supplier direct websites and call centers, consolidators, and wholesalers of travel products.
4. (GOOGL) – Alphabet, While MANY refuse to call it Alphabet, Google rounds out the top four Internet stocks picks. The company continues to invest in futuristic companies and dominate the search engine space. This stock also peaked in the $800’s last year and is currently trading at $750. GOOG shares are said to reach $870 in 2017 for a nice gain.
5. (NFLX) – Netflix has had a bumpy 2016. Following a global launch in January that boosted its subscriber numbers, the streaming video giant then saw a slowdown in membership additions following a price increase. But Netflix is on track to end the year on an upswing, even if the gains aren’t as great as they were last year. At the end of the third quarter, Netflix had 86.7 million subscribers worldwide. Going into the week, its stock was up nearly 13 percent for the year after a gain of 140 percent in 2015.
6. (PCLN) – Priceline has spent the last month and change forming a textbook example of an ascending triangle pattern. For PCLN, the big breakout level to watch is resistance up at $1575. What makes that $1575 price tag so important for Priceline? It’s not magic. Here’s why the ascending triangle pattern works: the $1575 resistance level is a price where there has been an excess of supply of shares. In other words, it’s a spot where sellers have been more eager to step in and take gains than buyers have been to buy. That’s what makes a breakout above $1575 so significant – the move means that buyers are finally strong enough to absorb all of the excess supply above that price level. And with that barrier to upside out of the way, shares are free to move higher.
7. (FB)- Facebook is a prime example of growth internet stock. The social media company has RBC attention (Buy) with Growth Style Score of ‘A.’ Facebook boasts a strong consumer base, with more than 1.79 billion users, as of Sep 2016. It’s two services – WhatsApp and Messenger have more than 1 billion users, while 600 million are on Instagram. Another thing to note is that FB has not issued dividends in more than 1 year.
Eye on other Internet stocks
8. Yelp is finding new ways to make money beyond local advertising, and its brand recognition continues to improve, one analyst wrote in a report this week.
RBC Capital Markets analyst Mark Mahaney writes that Yelp is his favorite stock among small Internet companies. RBC took a survey of consumers and found that nearly 100% have heard of Yelp, up from 66% in 2014. Some 50% had written Yelp reviews, up from 41% in 2015.
Importantly, Yelp is also moving away from a business model almost entirely dependent on advertising. It has new ways to make money on transactions now too. One of its newest solutions is to allow users to “Request a Quote” from a contractor, a service that was rolled out this year as a free perk but could begin to generate money for Yelp if the company takes a cut from the contractor.
Yelp stock was up 4.7%, to $38.86 on Wednesday afternoon. Mahaney sees it getting to $61.
Big Picture: Yelp is earning raves for some of its new business ideas, which could help it compete against much more powerful companies like Alphabet.
9. Baidu (BIDU) – is a Chinese-language Internet search provider. The Company offers a Chinese-language search platform on its Baidu.com Website that enables users to find information online, including Webpages, news, images, documents and multimedia files, through links provided on its Website. In addition to serving individual Internet search users, the Company provides a platform for businesses to reach customers. It’s known at the Chinese Google and I believe it’s another good internet stock to buy. BIDU ranks high in my list of China’s Stock and they had a flat year last year. I think BIDU will get back on track in 2017 and outperform most internet stocks. While Baidu’s revenue has been flat last year, I’m expecting the company to beat low expectations in 2017. BIDU is currently trading at $162 and shares could very well reach $210 in 2017.