5 Investment Ideas for 2016
March 30th, 20162016 began with a sharp decline in the S&P 500 and the NYSE. The market rebounded later in the year, but with so much volatility, many investors are wondering which stocks to consider buying. Here are five good investment options for 2016:
1) Walt Disney Co.
It seems like the Disney empire is growing every year. In 2016, that’s certainly true. With the recent acquisition of Lucasfilm and the rights to the Star Wars universe, Disney is aggressively leveraging Star Wars, launching a new trilogy, the first film of which already grossed over $2 billion worldwide, as well as planning to release a standalone Star Wars film each year. Factor in the addition of Star Wars attractions at Disneyland and Disneyworld, and easy to see how Disney will be doing very well in the next few years.
2) Southwest Airlines
Normally, investing in an airline is not a good idea. It’s one of the most difficult and competitive industries around. Southwest is quickly becoming one of the favorite airlines in the US, with low fares made possible by their Low Cost Carrier business model (fuel hedging, operating out of second tier airports, and flying one type of aircraft are just some of the ways they keep their overhead low). Southwest definitely should see growth in the short to medium term. By the end of the year they are expected to see 22.3% growth in earnings and 18.59% growth over the next five years.
3) Acadia Health Care
Acadia is the largest network of private treatment centers for mental health and addiction in the US. With more Americans obtaining health care thanks to the Affordable Care Act and with more demand for their services because of the ongoing opioid epidemic, the company is expecting 30% earnings growth by the end of 2016.
4) Bank of America
B of A is the second largest bank in the nation. Many investment experts think that Bank of America is finally turning the page on the crash of the housing market in 2008. Currently Bank of America's products such as mortgages are in high demand as the housing market recovery continues. Bank of America’s price to earnings ratio is 10.3 at the time of writing.
5) Japanese and European stocks
Many analysts think that some foreign stocks are going to be a better investment in 2016 than even many blue chip US securities.
- European Stocks – Earnings for European stocks are forecast to grow by eight percent in 2016, slightly higher than the same figure for US stocks. Some companies that experts recommend specifically are Novartis, Schlumberger and Tenaris.
- Japanese Stocks - While deflation continues and Japan’s economy languishes, that doesn’t mean there aren’t some outstanding individual opportunities. One of the major companies to choose in the Japanese stock market is Fanuc, a group of companies that provide highly technological service such as robotics and computer operated manufacturing systems. In the next year Fanuc’s share price is expected to increase 52.1%. The short term growth rate average for the firm is 14.50% but over a 5-year period it is expected to increase 16.39% annually.
