Market Mad House

In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule. Friedrich Nietzsche

Market Wisdom

Stocks poised for Growth in 2017

If the early indicators can be believed; 2017 appears to be shaping up as a pretty good year for stocks. This raises the natural question on the part of investors, which stocks are poised for growth in 2017?

Here are my picks of companies I think are poised for revenue and income growth in 2017. These determinations are purely my opinions based on trends I observed in 2016, so please take them with a grain of salt.

Stocks that might be Poised for Growth in 2017

  • PayPal Holdings (NASDAQ: PYPL) – This fintech solution provider saw its revenues grow by nearly 12% ($1.172 billion to be exact) during the first nine months of 2016. PayPal started the year with $9.248 billion in revenues in December and finished third quarter with revenues of $10.42 billion in September. During the same period net income grew from $1.228 billion in December 2015 to $1.378 billion in September 2016. More importantly, cash from operations increased from $2.546 billion in December 2015 to $2.964 billion in September 2016. More importantly PayPal’s ecosystem is growing by leaps and bounds. It added 13 million users during the first three quarters of 2016, rising from 179 users in fourth quarter 2015 to 192 users in third quarter 2016, according to Statista data. That means PayPal should have more than 200 million users sometime in 2017.

  • Facebook (NASDAQ: FB) – The social network experienced incredible growth in 2016. Its revenues shot up by $6.74 billion during the first three quarters of 2016 rising from $17.93 billion in December to $24.67 billion in September. During the same period net income increased by $3.817 billion rising from $3.688 billion to $7.505 billion. Cash and short-term investments grew by $5.71 billion, rising from $18.43 billion in fourth quarter 2015 to $26.14 billion in third quarter 2016. Cash from operations grew from $8.599 billion in December 2015 to $12.59 billion in September 2016. To add icing to the cake, Facebook is now the largest media organization in human history. Its flagship solution, Facebook itself, had $1.788 billion users in third quarter 2016, and another product WhatsApp had one billion users in February 2016. That means just Facebook products had 2.788 billion users.

  • Kroger (NYSE: KR) – I have long liked this supermarket giant because; unlike competitors; such as Whole Foods (NASDAQ: WFM), its’ growth is organic and highly diversified. Kroger’s revenues grew by $4.06 billion in 2016, rising from $109.83 billion in January to $113.89 billion in October. The most attractive feature at Kroger is its sheer size; the largest full-service grocer in the United States operated around 2,788 supermarkets, 1,387 supermarket fuel centers and 787 convenience stores at the end of 2015. That provides a wide moat against threats like food deflation, dollar stores, falling fuel prices and online grocery retail. Kroger is also in an excellent to expand by acquisition in 2017 because of the struggles of regional grocers like H-E-B , Supervalu (NYSE: SVU) and Winn-Dixie.


  • Walgreens Boots Alliance (NYSE: WBA) – The drugstore giant is poised for huge growth in 2017 because it looks as if its acquisition of Rite Aid (NYSE: RAD) will finally be approved by the Federal Trade Commission (FTC). That will give Walgreens 13,000 drugstores all over the world. Walgreens currently operates 8,200 drugstores in the US and Rite Aid runs 5,000. Even the sale of 865 Rite Aid stores to Fred’s (NASDAQ: FRED) will help Walgreen by cutting costs and keeping those locations out of the hands of better-financed rivals like Kroger. That’s exciting news because Walgreen’s revenues were already growing before the Rite Aid deal, they went from $112.92 billion in November 2015 to $117.35 billion in August 2016. During the same period Rite Aid’s revenue grew from $29.31 billion to $32.75 billion.


  • Capital One Financial (NYSE: COF) – This bank and credit card provider has enjoyed steady growth over the past year. Its revenues went from $23.41 billion in December 2015 to $25.13 billion in September 2016. Although cash from operations and net income fell, those numbers were still pretty impressive. Capital One reported $10.98 billion in cash from operations and $3.88 billion in revenues on September 30, 2016.


  • Bank of New York Mellon (NYSE: BK) – Revenues at this grand old name in banking suddenly turned around in 2016, it reported $15.02 billion in revenues in June and $15.17 billion in September, still below the $15.19 billion from December 2015 but an interesting trend. More importantly income shot up in 2015 rising from $3.158 billion in December 2015 to $3.37 billion in September 2016. It looks as if banks might be coming back with those in New York leading the way. Another reason I like Bank of New York Mellon, is its willingness to adopt new technologies such as cryptocurrencies which might lead to huge new profits in the years ahead.


  • Goldman Sachs (NYSE: GS) – Revenue wise, 2016 was a rough year for the Wall Street behemoth; revenues fell from $33.82 billion in December 2015 to $28.40 billion in June. Yet they may have turned rising to $29.71 billion at the end of third quarter. More tellingly, Goldman Sachs’ income has started to grow again rising from $4.37 billion in March to $5.816 billion in September, that’s still below the $6.083 billion in December 2015 but it is a welcome sign. What truly impressed at Goldman Sachs was cash and short term investments which grew to $99.53 billion in September 2016 from $75.11 billion in December. It looks as if Goldman Sachs is still a money machine.


  • Ford Motor (NYSE: F) – The historic automaker just had a very good year; it started 2015 with $149.56 billion in revenues in December 2015 that rose to $153.4 billion in September 2016. Ford also reported $19.09 billion in cash from operations, $34.16 billion in cash and short-term investments and $7.247 billion in income in September 2016. It might be poised to repeat those performances in 2017 if the economy remains good.


The great thing is that there are many companies poised for growth in 2017. Investors that do their research and trust their guts should make money in the market in 2017, so Happy New Year!!

Disclosure: your friendly neighborhood blogger owns a few shares of PayPal and he has owned Kroger in the recent past.