The year-end volatility in the U.S. stock market has created a rare opportunity for long-term investors to buy high-quality stocks at a significant discount compared with prices from earlier this year. Fortunately for stock buyers, periods of market weakness tend to drag down all stocks, even the cream of the crop in specific industries. Bank of America recently compiled a list of stocks that have outperformed their industry peers by at least 50 percent in the past year. Here’s a list of eight stocks to buy that are top market performers in their respective businesses in a volatile 2018.
Adobe (ticker: ADBE)
While the S&P 500 index is slightly down overall in the past year, cloud giant Adobe stock is up 41 percent and has outperformed even its high-growth peer group. Analyst Kash Rangan says Adobe’s total addressable market will grow from $21 billion in fiscal 2018 to $36.7 billion by fiscal 2021, an annual growth rate more than 20 percent. Rangan says 40 percent of Adobe’s document cloud users are new, suggesting the company’s innovation is working. Bank of America has a “buy” rating and $308 price target for ADBE stock.
Advanced Micro Devices (AMD)
When it comes to dominating its peer group, no other stock in this list has outshined competitors more in 2018 than semiconductor company Advanced Micro Devices. Analyst Vivek Arya says AMD has a “generational opportunity” to take market share from competitors Intel Corp. (INTC) and Nvidia Corp. (NVDA) in coming years in the massive, high-growth markets of CPU and GPU chips. AMD stock is up 101 percent in the past year, beating out the average performance of its industry by 120 percent. Bank of America has a “buy” rating and $30 price target for AMD stock.
Salesforce shares are up 32 percent in the past year, and Rangan says that momentum will likely continue in 2019. He says Salesforce has an impressive growth profile similar to peers such as Adobe but on a much larger scale. Rangan says Salesforce will likely continue to gain market share and expand its margins in the high-growth cloud market. In addition, growth into analytics, artificial intelligence, internet of things, commerce and other verticals will also help expand Salesforce’s addressable market. Bank of America has a “buy” rating and $181 price target for CRM stock.
Discovery Communications (DISCA)
Cable TV is a far cry from the high-growth cloud computing business, but you wouldn’t know it by looking at Discovery Communications. DISCA stock is up 44 percent in the past year, and analyst Jessica Reif says the company’s three-pronged strategy of growing its global brands, focusing on its profitable channels and trimming costs to become more financially efficient is paying off. Reif says Discovery’s buyout of Scripps Networks earlier this year will help create long-term value for investors. Bank of America has…
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