As much as I would like to buy all of my favorite stocks, which has grown into a list of 50+ stocks at the moment, I have to pare them down to a shorter list that I can reasonably research before I purchase my first set of 10 Starr Stocks on 12/1/19 for my Roth IRA account. At this point since I am already purchasing every stock in the market with my 401K account through index funds, then my Roth IRA account’s focus is to find companies that are driving the market’s increase over the years.
This past week I looked at my list and decided that I could handle researching 30 stocks over the next month. Each of the stocks on my watch list have already been chosen because of their vast market opportunities, so I needed some sort of formula to help get down to 30. I threw around financial growth numbers. And ratios. Brought in all of my key influencers ideas. Ranked them. Created a formula. And then realized that I had created this complex matrix that was growing out of control. So I stepped back, simplified things, and came up with three key indicators for my strategy: (1) Leadership of the company, (2) Employee satisfaction at the company, and (3) Potential to outperform the market.
Leadership of the company:
I want a leader that will make decisions for all stakeholders, whether times are tough as a lot of talking heads have predicted recently or they continue to be bullish (currently the US economy is experiencing one of the longest bull markets, markets without a downturn or loss of 20% or more, in history). They need to be able to navigate the changing marketplace while also creating a culture that encourages growth from its employees and attracts top talent. The leader sets the tone, so choosing a stock to buy with a solid leader will differentiate it from other stocks in the bunch.
Employee satisfaction at the company:
The leader sets the tone for the company, but it is the employees that are the hub of the wheel, connecting all of the spokes of the business together. They can make or break vendor and customer relationships. They can innovate and create new revenue streams. They can also help a company overcome lean times. Employee satisfaction level helps me judge whether or not they can continue to grow at the same pace or whether or not they can overcome a tough quarter/year, and that is what I want in the stocks that I buy.
Potential to outperform the market:
As a preference, I like stocks that most people believe can outperform the market. People are not prognosticators, but if enough people buy into the story and enough analysts say they are on the right path, then I want to invest in those companies. I do not want to be the only one who believes the stock will outperform the market.
With those indicators in mind, the first list of 30 Starring Stocks in this Market follows:
- ADBE – Adobe Inc – Provides a suite of software applications and services on a subscription basis and best known for their Creative Cloud products.
- ADSK – Autodesk, Inc. – Leads the way in drafting, design, and visualization software for numerous industries and best known for their AutoCAD software.
- APPN – Appian Corporation – Provides a low-code software development platform for a range of businesses to develop their own business process applications without having to hire a team of coders.
- DOCU – DocuSign, Inc. – Offers digital signature solutions for businesses across a wide range of industries.
- EB – Eventbrite, Inc. – Operates an event platform that can sell tickets and help plan and promote the event.
- FTNT – Fortinet, Inc. – Provides a broad range of cyber security solutions especially in the growing cloud realm.
- ILMN – Illumina, Inc. – Provides sequencing and array solutions to accelerate genetic analysis.
- INTU – Intuit Inc. – Offers financial management and compliance software for companies and is best known for TurboTax and Quickbooks.
- IRBT – iRobot Corporation – Creates robotic assistants for consumer households and best known for the Roomba device.
- ISRG – Intuitive Surgical, Inc. – Designs, manufactures, and services the da Vinci system to hospitals, a robotic partner to doctors for minimally invasive surgeries.
- MA – Mastercard Incorporated – Offers account holders payment solutions and services.
- MDB – MongoDB, Inc. – Offers a database-as-a-service platform for businesses.
- MELI – MercadoLibre, Inc. – Operates an online marketplace and a financial payment platform in Latin America.
- MTCH – Match Group, Inc. – Operates numerous online dating sites across the world and is best known for Match, Tinder, OkCupid, and Hinge.
- NVDA – NVIDIA Corporation – Offers visual computing products for the gaming, cloud, and artificial intelligence industries.
- OKTA – Okta, Inc. – Offers businesses solutions to manage and secure customers identities.
- PYPL – Paypal Holdings, Inc. – Operates a digital payments platform and is best known for PayPal and Venmo.
- SHOP – Shopify Inc. – Operates a commerce platform for small businesses to sell their products and services through mobile storefronts.
- SPLK – Splunk Inc. – Parses through a business’s data, offering them operational intelligence.
- SQ – Square, Inc. Offers small businesses point-of-sale hardware and software solutions.
- TTD – The Trade Desk, Inc. – Operates a platform to allow clients to create data driven advertising campaigns on any type of device and in all mediums.
- TTWO – Take-Two Interactive Software, Inc. – Creates gaming entertainment properties for sale to consumers and is best known for Grand Theft Auto, Red Dead Redemption, and the 2K sports games.
- TWLO – Twilio Inc. – Provides a cloud platform for internal communication and customer service.
- V – Visa Inc. – Offers account holders payment solutions and services.
- VMW – VMware, Inc. – Offers software solutions to businesses so they can operate successfully across data center, cloud, and network frameworks.
- WDAY – Workday, Inc. – Helps businesses manage their business, financial, and human resources functions through their software suite.
- WORK – Slack Technologies, Inc. – Offers communication and collaboration solutions for businesses.
- ZM – Zoom Video Communications, Inc. – Offers video communication software for businesses.
- ZNGA – Zynga Inc. – Creates gaming entertainment properties for sale to consumers and is best known for FarmVille and Words with Friends.
- ZS – Zscaler, Inc. – Offers cyber security solutions for the cloud.
These 30 stocks are currently starring on my watch list. I look forward to researching them more to see who will make my top 10.