2 Promising Industries For Investors In 2017
March 7, 2017 (Investorideas.com Newswire) Although much of the traditional wisdom will always apply when it comes to buying stocks, what changes each year are the best industries to focus on, as well as any news that will affect the markets.
2017 promises to be an exciting year when it comes to innovative industries, as well as political and economic news. Many things have changed too dramatically since the past year to keep on doing the same things that worked well back then.
A good example of a shift are oil stocks. Oil appears to be heading for trouble; it's no longer bullish. The reason is not exactly clear. Some analysts claim that it's only a market correction. Others speculate that Russia is responsible because it's not complying with a global deal to reduce output.
Politically, of course, things have changed dramatically, which will affect the economy in many new ways. While Donald Trump's electoral upset over Hillary Clinton has resulted in a bull run, this is not because of some significant policy changes or material economic shifts, but the prevailing belief that there will be less regulation and lower taxes. Should you avoid health care stocks with all the talk of the Affordable Care Act being overturned? Will infrastructure stocks be a good place to invest with Trump's promise to make America great again?
Let's take a look at two promising industries: innovative technology companies and established automakers.
Innovative Technology Companies
In the technology sector, Apple Company (nasdaq aapl) appears promising. Although the stock dipped in 2016, the stock price has risen because the overall market has gained.
Apple should do well this year for 3 good reasons:
#1: It's 2017 iPhone revamp will result in a new buying frenzy as Apple makes a good product even better.
#2: Trumps plan to lower taxes on US corporations from 35% to 15% and his plan to tax un-repatriated funds 10% from its current rate of 35% should also boost Apple's earning per share. Currently, Apple has $216 billion in un-repatriated funds.
#3. Apple's service business is expected to gain by 22% over the past year. The service line is one of the fastest growing revenue streams for tech companies and Apple is doing everything right with services like iCloud storage space, Apple music subscription, and iTunes song downloads.
Next in the tech space is SnapChat's IPO. Although the company hoped to raise $3.2 billion with share prices ranging from $14 to $16, which would value it from $19.5 to $22 billion, demand is high enough to talk about share pricing from $17 to $18 which would value it at $25 billion.
In its regulatory filing, the company said that a quarter of shares sold in its IPO would go to long-term investors. They defined a long-term investor as someone who would hold the stock for one whole year. Investors could gain a guaranteed block if they agree to hold on to the stock for a year.
Although there is some anxiety that the auto manufacturing industry has peaked, a downturn should not be expected, because the technology is changing. The future looks bright with the promise of more autonomous vehicles and electric cars on the horizon. Big car companies like General Motors and Tesla will do well.
- General Motors
General Motors will benefit from the interest in autonomous vehicles because of its $500 million investment in the ride-sharing company Lyft.
- Tesla Motors
Tesla is expected to continue to lead the field with electric vehicles and is also planning to be a big player in the autonomous vehicle business. According to Wired, "So, Tesla is already equipping all vehicles coming out of its factory with the hardware Musk believes they need to make that happen, and he has promised to send a car from Los Angeles to New York by the end of 2017."
With all these rapidly occurring changes, it can be difficult to figure out which way the wind is blowing. While it's tempting to be influenced by mainstream media to stay informed, this interest in current affairs should be tempered by reading financial media too, as this will provides real-time fiscal information on upgrades or downgrades, dividend or earning announcements, economic reports and IPO news.
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