These 3 Stocks Grew 30% in 2017, and They Aren't Slowing Down
Brian Feroldi, Neha Chamaria, and Jeremy Bowman, The Motley Fool
Updated
2017 has been a great year for investors. The S&P 500 is currently up more than 20% since January 1st, which is an impressive gain. Many individual stocks have done even better.
A run like that might scare some investors away, but we Fools believe that there are always great stocks to buy. Knowing that, we asked a team of Motley Fool investors to share a stock that's up at least 30% in 2017 and still has a long growth runway ahead of it. Here's why they highlighted XPO Logistics(NYSE: XPO), Match Group(NASDAQ: MTCH), and Iqvia Holdings(NYSE: IQV).
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Image source: Getty Images.
One stock everybody's falling for
Jeremy Bowman (Match Group): If you're looking for a stock that could just be starting a blockbuster surge, look no further than Match Group. The parent of Tinder, Match.com, OkCupid, PlentyofFish, and about 40 other online dating sites has jumped 86% this year as the company has posted strong earnings results and started unlocking revenue streams with products like Tinder Gold. In fact, nearly all its growth this year has come since it announced the new paid Tinder feature in August.
Match Group IPO'd in 2015, and it shares a number of characteristics with stocks that have gone on to be big winners on the market. It's a disruptive company, changing the way people date around the world as singles increasingly look to their smartphones and computers to help them find a romantic partner, and it's the leader by far in this category. Tinder, which is just five years old, has come to define the "swipe-based" dating model, much in the way that Netflix is now synonymous with streaming. Unlike many new tech stocks, Match is also profitable, trading at a reasonable P/E of 40 based on this year's expected earnings.
The company just announced a partnership with Latin media giant Univision to launch a new free dating app for Latino singles, called Chispa. That's just one of the many opportunities the company has for future growth as it taps advertising revenue and rolls out more paid products like Tinder Gold, Tinder Boost, and Tinder Plus.
With its strong leadership in online dating, Match Group should continue to reap rewards for investors in 2018 and beyond.
E-commerce should continue to lift this stock higher
Neha Chamaria(XPO Logistics): If the 30% figure in the headline got you excited, how about a stock that's risen more than twice as much in 2017 and is showing no signs of slowing down? That's XPO Logistics, the freight and logistics giant that's cashing in on an e-commerce boom, and is up a staggering 80% so far this year.
XPO Logistics recently delivered a stellar third-quarter earnings report, with record quarterly revenue and net income. I expect a strong fourth quarter, as well, which, I believe, should set the ball rolling for XPO shares for 2018. My optimism stems from e-commerce's rapid growth, which will be the biggest growth catalyst for XPO.
A key highlight of XPO's fourth quarter, for example, should be robust e-commerce demand. During the recent Black Friday and Cyber Monday holiday sales, XPO's U.S. e-commerce volumes jumped 24%, thanks primarily to its unparalleled last-mile foothold. Last mile involves the delivery of heavy goods, like appliances and furniture, to a customer's doorstep. As you may understand, it's easier to deliver a smartphone than a refrigerator, not only because of the huge differences in the weight and size of the packaging, but also the additional safety requirements and assembly and installation services that are part and parcel of such heavy goods.
To give you a sense of how important last mile is for XPO, the company opened eight new last-mile hubs and hired 6,000 seasonal workers ahead of the shopping season to deal with the rush. As I explained in a recent article, last mile should continue to give XPO a huge leg up over archrivals FedEx and UPS. With analysts projecting XPO to grow its earnings by nearly 49% next year, the stock still looks like a deal at a forward P/E of 27 times.
This healthcare giant is hitting its stride
Brian Feroldi (Iqvia Holdings): Even veteran healthcare investors might be scratching their heads at the name "Iqvia Holdings." However, this is actually a very powerful healthcare company that was called Quintiles IMS Holdings just a few short weeks ago.
Iqvia is a leading provider of services and data to the life-sciences industries. When a pharma or biotech company needs help bringing a new compound through the regulatory approval process, they often give Iqvia a call. That's because Iqvia employs a worldwide army of drug-development experts that know the process inside and out. Many healthcare companies are willing to pay a premium to get access to Iqvia's know how.
What's more, Iqvia can also help drugmakers, even after a compound gets the thumbs up. The company owns a one-of-a-kind database that contains more than 530 million patient medical records. This data helps pharma companies to target the right providers in an effort to give their drug the best chance of commercial success.
For investors, these two businesses are highly attractive because they tend to remain in demand, even during periods of economic stress. This provides the company with a predictable stream of cash flow that management has historically used to buy back huge amounts of stock.
These positives haven't gone unnoticed by Wall Street this year, as shares of Iqvia have rallied more than 30% since January. Despite the gains, the worldwide demand for drugs should continue to rise for years to come, thanks to an aging global population. Add that to Iqvia's price hikes, buybacks, and margin improvements, and Wall Street expects long-term profit growth of more than 13% annually. That's quite appealing for a high-quality business that's currently trading for less than 19 times next year's earnings estimates.
Brian Feroldi owns shares of Netflix. Jeremy Bowman owns shares of Match Group and Netflix. Neha Chamaria has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Netflix. The Motley Fool recommends IQVIA Holdings, Inc., Match Group, and XPO Logistics. The Motley Fool has a disclosure policy.
