Hundreds of stocks hit new highs last week, and many of those companies will head even higher this week.
In looking over the loaded list, I talked down five stocks that I felt were headed for a fall yesterday. I'm all about the winners this time, as I turn my attention to promising stocks that I think might just be getting started.
Let's go over five highfliers that I foresee gaining even more altitude:
|
Company |
Price on March 18, 2010 |
High |
Low |
|---|---|---|---|
|
eBay (Nasdaq: EBAY) |
$27.46 |
$27.76 |
$11.98 |
|
LivePerson (Nasdaq: LPSN) |
$7.94 |
$8.15 |
$1.83 |
|
Chipotle Mexican Grill (NYSE: CMG) |
$114.17 |
$115.64 |
$60.39 |
|
Apple (Nasdaq: AAPL) |
$224.65 |
$227.73 |
$100.25 |
|
Green Mountain Coffee (Nasdaq: GMCR) |
$96.80 |
$98.42 |
$29.85 |
Source: Yahoo! Finance.
Let's go over the reasons to curb your enthusiasm with these overachievers.
eBay
The company's namesake marketplace has finally stabilized, but I'm no bull on eBay.com itself. My love for eBay mostly owes to PayPal.
It's hard to ignore PayPal's dominance in micropayments and all sorts of online transactions. PayPal's revenue grew 28% in eBay's latest quarter, as more than $20 billion in payment volume changed hands through the platform.
PayPal is really just getting started. If you think social gaming is hot, you'll love eBay, since FarmVille parent Zynga is apparently now PayPal's second-largest merchant (behind eBay.com). The company's also mounting an ambitious foreign push, with PayPal planning to double its staff in Asia this year.
LivePerson
With more than 8,000 juicy clients, LivePerson offers online support on websites through a live chat feature. Whether fielding a problem with a wireless carrier bill or a question for an online retailer, LivePerson offers an engaging platform that is cheaper and more convenient than old-school telephone or email communications.
There are plenty of rudimentary click-to-chat applications out there, but LivePerson's platform can dive deep into past traffic trends on a site to decide when to initiate the chat process. A recent study on LivePerson client ShopNBC showed that customers who were engaged in chat resulted in a high 24% conversion rate, with most of the transactions being incremental to the site. Ultimately, LivePerson's platform resulted in a whopping risk-adjusted 299% return on investment for ShopNBC.
ShopNBC isn't the only impressed client. LivePerson posted record profitability in its latest quarter, with revenue soaring 26% over the past year.
Chipotle Mexican Grill
Maybe this is true only among my friends and family, but Chipotle is one of the rare quick-service chains that we universally love. Between its "food with integrity" mantra, its speedy burrito assembly line, and the actual quality of the product, Chipotle has set itself apart from ho-hum wannabes.
Chipotle is no slouch these days. Earnings soared 86% in its latest quarter, revealing dramatic margin improvements given its modest 12% top-line gain. Comps have remained positive, which is pretty impressive in a recession, especially for a chain that is certainly not as cheap as the "dollar menu" burger joints.
Since Chipotle is a popular lunch option around the office, and a frequent family indulgence over the weekend, I suspect things will only get better for the chain as the economy improves.
Apple
I've seen more than a few articles over the past week worrying about weak iPad preorders. They tend to amuse me. Apple has revolutionized portable music with the iPod, and smartphones with the iPhone, yet there are plenty of doubters out there when it comes to a product that is essentially a plus-sized iPod touch.
I don't think Apple has bitten off more than it can chew. I think the iPad will be a big hit, and the "must have" gadget by the time the holidays roll around. It's not perfect, but hopefully, if it doesn't cannibalize the iPod, iPhone, or even MacBook sales, this will be yet another incremental gem in Steve Jobs' portfolio.
Few companies today inspire any certainty that they'll be more relevant in a year or two than they are today. For me, Apple is one of them.
Green Mountain Coffee Roasters
I've owned one of Green Mountain's Keurig single-cup brewers for a couple of years now, and my only regret is that I didn't buy the stock at the same time that I bought the machine.
Green Mountain has been on a tear since its Keurig coffee makers -- and K-Cup portion packs, which crank out premium java -- became staples in homes and office break rooms. It doesn't matter that Starbucks (Nasdaq: SBUX) introduced its Via instant coffee last year, nor that McDonald's (NYSE: MCD) has dived headfirst into the premium coffee market with reasonably priced brews. Keurig's popularity continues to grow briskly.
Sales in its latest quarter soared 77%, with adjusted profits catapulting a caffeinated 163% higher. Green Mountain's valuation is lofty, and there are patent concerns looming, but it's hard to ignore that kind of revolutionary growth in an otherwise sleepy industry.
