One year ago, markets surged in January, tacking on 5 percent as investors jubilantly celebrated the passage of tax reform the prior month. A year later, Wall Street enjoyed an even more prosperous January, advancing nearly 8 percent
With markets firmly off their recent lows and momentum trending in the right direction, here are five of the best stocks to buy for February.
— Stitch Fix (Nasdaq: SFIX)
— Apple (AAPL)
— Stryker Corp. (SYK)
— Twitter (TWTR)
— Becton, Dickinson and Company (BDX)
Also one of U.S. News’ 10 best stocks to buy for 2019, SFIX shares sold off in December, despite reporting a quarter of 24 percent revenue growth, 250 percent earnings per share growth, and active client growth of 22 percent. The specialty e-commerce business operates on a subscription model, sending customers a box of clothing, chosen by a personal stylist with their tastes in mind, every so often.
A perfect embodiment of the “stay-at-home economy,” the company has no debt, and shares have posted an amazing rebound in January, though the stock is still nowhere near its 2018 highs.
After bottoming out in early January after Tim Cook shocked investors by warning that its holiday numbers would disappoint, shares have done nothing but recover. In hindsight, it looks like AAPL stock may have achieved its 2019 lows within the first week of the year.
On Jan. 30, Apple reported its official financials for the holiday quarter, and it wasn’t quite as bad as initially feared, beating on both revenue and earnings per share. The shining star of the quarter was Apple’s services segment, which grew by 19 percent. Gross margins for that segment, revealed for the first time, were 63 percent — an impressive number light years away from Apple’s overall gross margin of 38 percent. At just 13 times earnings, AAPL stock is a relatively safe bet at current levels.
The $67 billion medical appliances company Stryker also goes down as one of the best stocks to buy for February. Like Apple, Stryker also impressed Wall Street with a better-than-expected quarterly report, released in late January. Not only did Stryker swing to a profit last quarter, but it beat on both earnings per share and revenue.
Stryker’s long-term goal is to routinely grow earnings per share by 20 percent annually. While that goal may be a bit ambitious, SYK has been quite effective at growing its earning per share over time, and as a result, the long-term trajectory of shares has been stubbornly positive as well.
In many ways, Twitter remains the unsung and underappreciated social media stock with big brother Facebook ( FB) getting most of the love and attention. But Twitter’s efforts to clean up its platform, eliminate bots and improve the quality of discourse is going a long way toward bringing advertiser love back to the platform.
TWTR will report its fourth-quarter earnings on Feb. 7, so keep in mind that one way or the other, this could be a volatile month for shares. Still, the stock’s current price-to-earnings-growth ratio is less than 1, which implies shares are priced to beat the market over the next several years.
Becton, Dickinson and Company
Last but not least is Becton Dickinson, a medical supplies company that’s proven to be one of the most stable and durable businesses in the world. Founded in 1897, not only has BDX survived through well over a century of competition, innovation and economic cycles, it’s one of the rare ” dividend aristocrats” — stocks that have increased their dividend payouts for 25 straight years or more.
Investors love this sort of regularity because dividends are a sign of management confidence in future cash flows; the rule of thumb in corporate America is to only pay a dividend if you can continue to pay it in perpetuity. BDX has increased its dividend payout for 47 consecutive years. BDX reports earnings on February 5.
Don’t expect its shares to grow by leaps and bounds, but if you’re looking for a steady, stable portfolio holding, Becton, Dickinson is a solid, conservative choice.