Stocks have more or less gained in 2018, courtesy of tax reforms, a stronger economy and confident consumers. However, things haven’t been looking up for investors over the past few months. Trade-related issues between the United States and China and a slowdown in the housing market have pushed Wall Street into a bear market, with major indexes remaining in the red for the year.
Things have, in fact, gone from bad to worse as the Trump administration continues to blame the Fed for raising rates too fast, with Trump openly criticizing its chairman, Jerome Powell. Treasury Secretary Steven Mnuchin’s phone calls to major banks to assess their financial health are doing no good either.
Thanks to the odds, companies like Facebook, Inc. FB have lost considerably. General Electric Company GE is another company that took beating due to weakness in its power division and major mistakes by former CEO Jeff Immelt. While Facebook is down nearly 32% so far this, General Electric has tanked more than 60% on a year-to-date basis.
But, there are certain companies that have made rather surprising turnarounds and have defied the downside in the broader market. Let us take a look —
After several disappointments, Twitter, Inc. TWTR — a Zacks Rank #1 (Strong Buy) company — has finally emerged as a profit making company. Year to date, the global platform where any user can create a Tweet is up 10.2%, in contrast to the Internet – Software’s decline of 8.7%.
Even though its monthly user numbers have declined, the daily user growth continues to remain solid, up double digits. This, undoubtedly, shows that involvement with the social media site is gradually increasing.
Twitter’s revenues continue to grow and the company has seen four straight quarters of GAAP profits. Trump’s use of the platform to connect to the broader public and an active news scenario is surely working in favor of Twitter. The company has taken enough measures to negate abuses on the platform, something that bodes well for users.
TripAdvisor
TripAdvisor, Inc. TRIP — a Zacks Rank #1 (Strong Buy) company — seems to have left a bad spell behind. Lest we forget, a failed launch of its Instant Booking platform and lowered monetization rates from mobile instead of desktops have wiped off almost 75% of its stock price.
Now, the travel-recommended engine’s focus on restaurants and other sorts of amusements other than its core hotel segment has worked wonders. Trimmed marketing and advertising expenses have also helped the company double it profits in the most recent quarter.
The stock has outperformed the broader Internet – Commerce industry so far this year (+49.8% vs -13.9%).
Costco
At the beginning of 2018, talk of the “retail apocalypse” was pretty common with many traditional retailers shutting down thousands of stores. Retail heavyweights like Costco Wholesale Corporation COST — a Zacks Rank #3 (Hold) company — weren’t spared either. But, by the end of this year, Costco has come up with the best comps and traffic growth in a decade, helping the stock make a stellar comeback. This can be attributed to record Black Friday sales.
Mastercard reported total Black Friday spend (online and offline) of $23 billion, up nearly 9% from last year. It projected a 5% rise in holiday sales from November 1 through Christmas Eve this year from last year.
Costco just ended a fiscal year with a 7.4% rise in U.S. comps. The stock has outperformed the broader Retail – Discount Stores industry so far this year (+2.1% vs -0.2%).
Chipotle Mexican Grill
Chipotle Mexican Grill, Inc. CMG — a Zacks Rank #3 company — was looking forward to put a rough two-year patch behind while entering 2018. The company that serves a focused menu of burritos, tacos, and burrito bowls and salads was hopeful that the new CEO Brian Niccol will be able to put memories of the E. coli crisis on the back burner, restoring investor confidence.
And Niccol definitely didn’t disappoint. He brought in a flurry of new executives, moved the head office to his hometown, launched an ad campaign focusing on real ingredients and in the process helped Chipotle Mexican Grill post double-digit comparable-store sales growth so far this year. The stock has outperformed the broader Retail – Restaurants industry on a year-to-date basis (+33.5% vs -1.1%).
