5 STOCKS to DOMINATE in 2018
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Today we discuss 5 stocks in the stock market that should have a phenomenal 2018. Enjoy!
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Five stocks that are going to dominate in 2018. That is exactly what we are discussing here. Today, guys, I’m gonna give you five stocks that I see dominating in 2018. And by dominating, I mean, I see their profits going up a lot in 2018, I’m going to get into each one of these, and not just kind of give you the name, but give you my thought process on why.
I see each of these companies profits going up so dramatically and kind of give you the details on it. Now, just to caution, some of you guys out there, just because I believe these companies profits are going to go up massively, and I’ll explain why. It doesn’t mean one, it doesn’t mean it’s gonna happen, for sure.
Okay, that’s something we know, too. Just because these companies profits go up does not mean the stock price is gonna go up. Okay, so you got to always take these things into account. That’s just not the way the market works. Sometimes stocks are doing really bad, and yet their stock price goes up.
And it’s like, what the heck and a stock Well, you know, they have great earnings and whatnot. And they’ll they’ll profits will be exploding in their stocks down. And so sometimes the stock market just doesn’t make sense, guys, so I just want to explain that to you.
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And if you don’t like the group, you can cancel at any time and get out of the group anytime you want. Guys, no questions asked. So hope to see some more you guys in there. Stock number one that we’re talking about that is going to have a phenomenal 2018 is Apple.
Okay, Apple is the first stock that we’re going to discuss here on why they’re going to have a phenomenal 2018. Why to see the profits going up massively. So with Apple, in my opinion, the way you kind of got to judge Apple’s business is really off of two main businesses, iPhone services, okay, iPad, business, Mac, business, headphone business, all those other kind of things they do.
That stuff’s all secondary. Those are still huge businesses, if you were to compare him to any company out there. But as far as what’s going to drive Apple’s profits and their stock price over the coming years, it’s all about iPhone, and it’s all about the services. Okay, let’s talk about services first.
Okay, let’s talk about services first, right now, it’s, it’s a business that’s bringing in somewhere around $35 billion a year, okay. And revenues, okay, $35 billion a year, I’ll actually draw it out here. So you guys can see how big this amount of money really is just coming from the services.
This is like, you know, things like cloud storage, and you when you buy apps, and all those different kinds of things, right? $35 billion dollars. So this business is growing consistently right now, between a 20 and 30%. Clip this past quarter alone, the growth services business by 34%.
Okay, so let’s say you know, next year is not super strong, it’s just a strong year. So let’s say they grow that business by 20%. Okay, they grow that by 20%, that business, do the math on that, and that somewhere around what $7 billion, they’re gonna grow that business guys $7 billion in revenue, as long as they do a 20% clip, which.
I see them hitting pretty easily guys can to be completely honest. So $7 billion, need to take in the fact that it’s a super profitable business. So they’re gonna probably be able to do somewhere between three and $5 billion more just in profits, okay, down to that net income line from that business guys.
So we’re talking about a dramatic amount, they’re probably an extra three to 5 billion because that’s a super profitable business, like you think about the App Store and whatnot, and they get their 30% Commission on those apps, and basically cost them almost nothing to do the research and development is already there.
And those kinds of things, guys, so you’re looking at possibly an extra three to $5 billion going onto that net income line next year, from the services side of the business as long as they can grow to around 20% clip which they’re they’ve grown consistently 20 to 30 plus percent this past year.
I see no reason why that which is Austin stopped the growth or would slow dramatically. Okay, so that’s the first part. And that’s kind of almost the smaller piece of the puzzle. Okay. So what I’m thinking in 2018 is currently right now, as of right now, Apple’s average selling price per phone, okay, which is otherwise known as ASP. their average selling price per phone is right around $695 currently, all right.
I see in 2018, the average selling price moving to somewhere around $795. And that’s actually somewhat worst case scenario, in my opinion, could go up more than that, but we’ll do kind of worst case scenario 795. Why is this going to happen? Well, we know the majority of Apple customers, they want the newest devices, and that’s not just them, that’s any premium electronics brand.
I mean, if you’re going to your Samsung customer, you want the newest s eight or whatever, that’s just how things go. Okay. So So with that being told, what’s the new iPhone app, the new iPhone 10 is priced at starting at $999. Okay, guys, and the higher end model, which has just basically more storage is whatever what 11 $150.
Okay, apples never had phones, this high praise, especially for the starting feats, the starting phone $999. Guys, this is dramatic difference. So that is going to push up ASP is massively, because you’re gonna have massive amount of customers buying this.
And this couldn’t be the most high end demand phone that Apple has ever come out with, we will start to see some of these numbers coming up in this upcoming quarter. Guys, it’s going to be very interesting to see. So for that reason, I see ASP is going somewhere around $795. Now, what does this mean for its business overall, right?
Well, if we think about Apple’s business, basically Apple moves at least 200 million smartphones a year. Okay, at least 200 million. That’s once again, a probably a pretty conservative number, this upcoming year, they’ll probably be able to do somewhere between 225,000,200 and 50 million.
Okay. We’ll just say 200 million. All right. So that’s an extra eight, excuse me an extra $100 per phone average selling price, right? Let’s say you know, about half of that profits, you know, half of it’s just, you know, more cost than the device.
So let’s say they make an extra $50 per phone in profits. All right? What does that equal $50 times 200 million phones, it’s around 10 a billion dollars in extra profits there guys, it’s around $10 billion. In extra profits, there’s so many zeros, it’s hard for me to write $10 million in extra profits there.
So you’re looking at somewhere around, in my opinion, somewhere around roughly $10 billion in extra profits on the iPhone business. And you’re looking at somewhere around three to 5 billion extra in the services business. So in my opinion, you’re kind of looking at somewhere between maybe 13 billion and 15 billion extra dollars in net income, in my opinion, next year.
I think worst worst worst case scenario for Apple is that they would maybe only have net income go up around 10 billion next year, which I think would actually be a disappointment. Okay, I can absolutely see next year them raising that net income by about 13 to $15 billion, guys.
So that is stock number one. And that’s why I think Apple will have a phenomenal, phenomenal 2018 they’re set up in a real good, real good place. Okay, guys, the stock number two we’re going to talk about is actually another massive tech company. This one goes by the name of facebook, facebook.
All right. So Facebook is set up in a really good way as far as their profits exploding throughout 2018. Here, Facebook, when you think about Facebook’s business, obviously? Well, as far as if you’re thinking about it from the revenue and profits perspective, you’re gonna think about Facebook, and you’re gonna think about Instagram, okay, they have also WhatsApp and whatnot.
Those are big revenue generators just have a lot of users on the platform right now. They have Oculus, and a few different other things. But as far as you know, what runs Facebook’s business, it’s Facebook, and it is Instagram. Okay, it is Instagram.
Now, I think 2018 is going to be a very interesting year for Facebook as a company, because I think a lot of their growth metrics are going to slow quite a bit, especially on the Instagram side, which I think is is has really carried the company by growing by what I’m talking about growth, I’m talking about new users coming on the platform talking about time spent.
I don’t think it’s going to be as impressive some of those growth metrics. However, their profits are still going to explode next year. Okay. Why? Because ad rates on Facebook are going up, okay, ad rates on Facebook are going up, we see the one there’s going to be more and more ads on Facebook, more and more advertisers want to be on social media, whereas one of the first places they’re going to go if not the first place is going to be Facebook, okay.
So there’s going to be more ads, more ads on the platform. And then on top of that, you’re going to have higher ad rates, okay? Age, ad rates, okay, higher ad rates. So that is a phenomenal thing for Facebook, they’re going to have a much more many more ads.
They’re also going to have much higher ad rates so that when somebody goes to advertise, when they used to maybe pay $10 per 1000 views, maybe now they have to pay $15 or $20 or something like that guys, and you got to think when you think about Facebook’s business, most of their costs are already out there.
So the amount of research and development things like that to come up with new features and whatnot. Most of those employees are already hired out so it’s not like he needed to you know, build out the business massive and then you know, buy this new factory or something like that, like Facebook’s business is like built out pretty much as far as you know what the costs are.
So a lot of this money, a lot of the new money coming in, it just goes straight to net income, okay, it just goes straight to net income basically, when, when all that new money comes in it just pretty much go straight down here where a lot of other businesses Like, oh, we need to funnel this out to build out this, this warehouse and blah, blah, blah, you know, you think about Amazon’s business, you know.
Amazon’s always, you know, investing and all this stuff, Facebook, it’s like, they’ve got most of their business built. Okay? And then Instagram, Instagram did not really start running, I would say, seriously on the ad side until 2015. Okay, they’ve technically been showing ads for about four years on there since about 2013.
But in my opinion, they took started taking a serious in 2015. What do I mean, by taking this serious? Well, they started actually using information that people would upload to their Facebook profile, they would start using that information because it’s highly relevant on Instagram, okay to run ads against you and whatnot, when you’re on those platforms.
So basically, they’ve only been taken ad super serious on Instagram for about two years now. Meaning they have a long, long way to run as far as what what the amount of ads they can run, if you think they can run a lot more ads on Facebook, it’s, you know, two to three times more ads, they can run on Instagram, when you compare it upon Facebook, they’ve been running ads on so many more years than what they’ve been running on Instagram.
Also, these ad rates are gonna go up substantially on Instagram as well as more and more advertisers Come on what ends up happening, the ad rates have to go up guys. So for those two reasons, I see Facebook as being a company that is going to have profits explode, net income explode again in 2018 does because they don’t need they don’t need to funnel a bunch of money into more research and development.
They can just kind of keep doing what they’re doing. That’s enough to get by and then all this new money coming in. It’s just basically going straight to net income. And you can see this by if you look at the 2015 net income versus 2016 net income you can see this for yourself how much profits have gone up how much net income is going up.
It’s just it’s just an a dramatic amount guys. And now on to stock number three. Okay, stock number three is not a tech related company. All right. This is a company I own their profits are going to more likely explode again in 2018. And who am I talking about? I’m talking about Wynn resorts.
All right, Wynn resorts a stock that I actually own of this bunch here, Wynn resorts, why are their profits going to continue to explode throughout 2018? What would you understand about winds business is about roughly about 75%, if not a little more than 75% might even be with winpalace now open and might be closer to 85% of their profits come from Macau. Okay.
So you might have if you’ve been to Las Vegas Strip a lot of my, you know, North American viewers and whatnot. You’ve seen the winning encore there, then business actually only brings in about 25% maybe 15% of their actual net income and profits and those kinds of things from the Las Vegas property. So their business is really run for the most part as of right now off of Macau.
What is going on in Macau right now. 16 straight 16 straight quarters of growth in Macau, okay, including this past quarter, which was somewhere around 22% growth, okay, somewhere around 22% growth in this past quarter. So Macau is in like a mode right now where it’s double digit growth month after month after month, guys, there’s just a really hot space right now. Macau is hot.
China’s economy is coming on thing is things like that, guys. So now we’ll kind of dig into the numbers here and I’ll explain you guys now that you understand Macau is growing so much. And we’re where wind gets most of its revenues from and net income from now we can kind of explore the customer base of when Okay, so in Macau, there’s kind of a few different customer bases.
There’s first the customers that might gamble somewhere around no money to $100 in in a trip when they go so they maybe go for a weekend. There. They come in on Friday, their Saturday, they leave out Sunday, right? They may gamble somewhere around zero to $100 then you kind of have the gambler of that will gamble. And by the way, Macau is mainly a gambling market.
Okay, so that’s why I’m saying it like that. Whereas Vegas, a lot of people come to Vegas, they actually don’t even gamble at all they just go to the restaurants and do fun stuff on the strip and go to the clubs and whatnot. Macau, you if you go to Macau, you’re really going to gamble at the end of the day.
So then there’s the customer bracket of spending $100 to $1,000. Then you got the customer bracket that spending $1,000 somewhere around $10,000 on a trip. All right, then you have a customer bracket that’s spending somewhere around $10,000 to $100,000 on a trip.
And then lastly you have a customer bracket which is kind of how it called the wheels that will gamble 100k plus in a trip all right now in bad times in bad times. Still these kind of customers aren’t even really Wynn resorts customers as far as the Macau market goes even when things are bad in Macau, okay, when things are bad in Macau when kind of takes up a lot of these customers that are spending somewhere around $1,000 to $10,000 in Trip All right.
Now when things are good in Macau, then Macau is filling up the place with a lot of these kind of customers that are spending 10k to 100k. But when the markets really hot, what is when fill up its properties with they fill it up with whales, people spending 100,000 plus dollars on a trip as far as what they’re gambling. All right? So what does all this mean here?
Well, one wins always taking the higher amount of the market, okay? Even in bad times, they’re still taking, you know, the creme de la creme, because why? Because they got the customer service levels, and they got the, you know, better properties and all that kind of stuff. And they got connections with all these types of people.
So right off the bat, that’s a that’s a big factor there. But when McKellen’s really hot, you got, you’re filling up your hotel with these amount of people, right? And you’re saying, well, we don’t really have too much room for you guys here, because we got so many of these kind of guys here.
They don’t tell them directly like that. But that’s basically what they mean, right. And then these guys almost get flooded out. And they have to go to some other casino to stay in those kinds of things, right. So they’re really dominating on this space when Macau is hot.
So when this is done, what ends up happening it with a with a resort, like when Macau, just because they got a bunch of whales in there, it doesn’t mean they have any more staff on or things like that, then versus when they have the kind of customers there, it really doesn’t, it’s the same thing, if you got five chefs in the kitchen, okay, then you still need five chefs when the person that has $100,000 comes there.
And then versus a person who has 1000 like that doesn’t change. If you got, you know, five busboys or whatever, you still got five bus boys, whether it’s 100,000, or $2,000, they don’t change their customer service levels as far as what’s going on in the resort.
So you got to understand when the more money that’s being spent, it’s not just that they that money’s coming in and is more revenue, it’s really more straight profits, guys, it’s more straight profits is going straight to that in any income line, because they don’t need more staffing.
They’re already fully staffed and whatnot, the room that however much electric the room uses at $1,000 customer is the same amount that you’re probably going to use with $100,000 customer, okay, the dealer is still going to be the same dealer, whether they’re dealing to $1,000 customer or $100,000. Customer guys. So that is a phenomenal thing about wind business, when things are really hot, they end up filling up the resort with more of these customers.
And these customers are kind of like the bad customers, the ones that only spending $10,000 per trip. So that is that’s the wind premium I call it which is why when is always in the position where they always set themselves up for the most upside when times are good just because they attract the biggest players out there guys.
So Wynn resorts, obviously, certainly a company that is in a phenomenal position for 2018. As far as profits going up stock number four, they should have a phenomenal 2018 is a company called united natural foods. A lot of you guys have probably never heard of this company. What they have to do with is a sell a lot of products in the organic space.
Okay, they sell a lot of organic products to food stores. They’re, you know, a huge distribution company and whatnot. A lot of natural foods, organic foods, those kind of things, all right, they get about 1/3 of their business from Whole Foods, okay, they get about 1/3 of their business from Whole Foods.
Now, why does this matter? Okay, this is a stock that’s been hammered over the last few years as whole foods have troubled to grow this stock. As long as wholefoods was doing great, their stock was going up, and all these kind of things when Whole Foods start to struggle, not united natural foods also struggle because you get a third of your business from this company.
Like obviously, it’s very important. Now that’s been a big game changer recently, what ended up happening? Well, a company named Amazon, Amazon, what did what did they end up doing? They bought out this whole foods company. All right. Now, since his buyouts happen, Amazon’s tried to slash some prices on some products at Whole Foods, tried to get some better deals in there.
And those kinds of things to basically make Whole Foods business go up. All right. Also, Amazon wants to probably get more in those food distribution, as far as you know, selling dry goods and whatnot from strictly amazon.com. So this is phenomenal news for United natural foods, they’re almost an indirect beneficiary of this whole situation.
Because one, Amazon by lowering prices is going to help drive Whole Foods customers to go to their store more often than go to another food store. which honestly, if you can just get you know, an extra 100 customers or 200 customers a week to go to a store and spend you know, 100 or $200 on a food trip rather than spending another store.
Like you’re talking about income store sales going up quite dramatically, guys, you’d be surprised on on the numbers on how much that changes a business like Whole Foods. All right. So the fact that Amazon’s doing that income store sales should start increasing for Whole Foods and also the amount of that people are buying each trip when they go to Whole Foods.
It’s gonna benefit this company in a big way. They actually call this out in their latest earnings call. All right. Also, like I mentioned, Amazon, okay, if they want to start getting into some of the more you know, maybe like the dry food side and whatnot and being taken more serious, which not many people order actual foods stuff on Amazon right now.
Well, if they want to get into that business more than it’s phenomenal that they already had this huge connection with Whole Foods, Whole Foods has this phenomenal connection with United natural foods. So who’s going to be a good potential play there.
I’m going to say united natural foods going on and selling on Amazon and whatever type of services Amazon wants to launch in the future, whether it’s some type of like Blue Apron type service or whatnot, who they’re going to probably get a lot of produce from and whatnot, probably going to be united natural foods, guys.
So as Amazon takes the food game more and more serious throughout 2018, I see that just benefiting united natural foods in a big way, guys, and so their profits are gonna, you know, set to go up dramatically. As long as wholefoods keep cutting prices on air, excuse me, Amazon keeps cutting prices at Whole Foods, it’s just gonna keep driving more and more customers to Whole Foods.
And as long as Amazon keeps kind of, you know, showing some more products and whatnot on their front page at Amazon and things like that, guys, it’s going to be very interesting. So I think united natural foods is a huge indirect beneficiary of that big move that so many people paid attention to, like so many people pay attention to this, like this made news outside of the stock market, like when Amazon bought Whole Foods.
Like everybody knew about that it seemed whether you cared about stocks or not. But no one was really thinking like, Who’s going to benefit from this? Everybody was just kind of thinking like, well, maybe I’ll benefit as a customer. No, this company right here, they’re set to benefit in a big way guys, they really are. So that a stock number four, they’re stuck.
Number five that is set to dominate in 2018. What is it is good on Google MacDougall, Google McDougal is set to have profits explode once again in 2018. And why is this is all a lot of reasons why Google is set to have a phenomenal year as far as that net income growing dramatically again.
So the first thing we have to look at is Google’s core business, which is Google, basically the search engine right Google search engine, then that business, I don’t really see you don’t necessarily decreasing much or increasing much as far as what it’s going to bring them the income line. So that’s not really the kind of business I’m thinking about the Google search.
That’s not really where I’m thinking they’re gonna have dramatic amounts of revenue go up or down or anything like that. There’s a few other places I am though, one is YouTube, YouTube. Okay. Google has, you know, Google’s, obviously, the parent company of YouTube. Over the past couple of years, they’ve taken playing ads more serious and more serious.
We’ve seen ad controversies and this annatto begins creator saying this and that was a lot of drama there. But in threat to the 18 ic, one viewership going up on YouTube viewership is on the up and up, okay, the amount of watch time people watch the amount of people that are getting on and things like that, like those numbers have been going up for a long time, they will continue to go up.
Because there’s really like, you know, creators for everybody out there and YouTube or YouTube just started as like a silly thing, you know, showing cat videos and funny stuff like that. Now, it’s like, if you want serious content, whether you want to talk, you know, business or financial matters.
We got creators out there for that, whether you want something funny whether you want something kid related, like the Jake Paul and Logan, Paul type thing, everything you know, is sports related content, there’s massive amounts of sports related content on YouTube now, like anywhere you want to go in, and not just on top of that, but then then you talk about the mainstream shows and whatnot that are now getting replayed on YouTube.
Almost anything you could possibly want and look for is on YouTube now. Okay, so for that reason, viewership, and all those types of metrics are all going up dramatically. Now, what does this mean? That means more ads will be played on YouTube, okay, more ads, that’s going to go up. And also YouTube has kind of silently announced ad rates will be going up.
So amount of you have to pay to actually run ads on YouTube is going to go up. And I thought they should have made this move quite a while ago, they didn’t. But they’re finally looking like they’re gonna make it because a lot of times you can play, you know, ads on YouTube for two or three cents, guys, two or three cents a click, like that’s insanely cheap.
It’s way too cheap, in my opinion. So ad rates need to go up, they’re going to end up raising ad rates in 2018, which they did on Google back in the day because Google used to not have like a minimum set price you had to do right. And now Google does, you can only set it you know so far down. And by the way, now, the if you want to pay per click type thing on Google, it’s like $1 or two on average.
Now it’s extremely expensive. Whereas on YouTube, you can get it for like less than five cents. Currently, it’s so far underpriced when you compare it to the Google search, so ad rates will go up. I see also the amount of ads being played more. Okay. So that’s their YouTube kind of business there. Now another part of YouTube business.
I think, is going to bring in a lot more income this year, his YouTube TV has been launched now fully pretty much around the United States. I think this will be definitely a growth vector for the company throughout 2018 as far as income line, and last thing kind of has to do with the Pixel phone, okay, the Pixel phone has really kind of become.
I would say, in the in the landscape of high end smartphones. The Pixel phone is kind of like the third one there. Now obviously you got apple at the top, you got Samsung right underneath them, and then kind Like when you will think about like the third, the third phone that’s really attracting people to it right? That’s on the flagship side, you’re really thinking about the Google Pixel two.
So when I look at that, obviously, that’s going to be a very profitable business for them. I mean, when you look at what Samsung makes for profits, when you look at what Apple makes for profits from an iPhone business, if they can just get 10% of that, or 20%, of whatever Apple has, or Google, or excuse me, Samsung has, we’re talking about dramatic amounts in the net income guys.
So between, you know, YouTube, the amount of viewership going up, which means ads are going to more ads will play ad rates going up YouTube TVs now fully rolled out, you know, that’s a $35 a month when you can start adding up this, you know, you think about if you got 100,000 people on there, think about if you got a million What if you got 10 million, and then think about the Pixel phone now that’s kind of become the third wheel there.
And I think, you know, if they can just sell five to 10 million units a year, that’s a huge success for them. Never mind, if they start selling, you know, 10 to 15 million, then we’re really talking big numbers for Google. So Google should have another phenomenal 2018 which they have a phenomenal almost every single year guys.
Anyways, hope you enjoyed this today. Make sure if you didn’t already, click that third link in the description down there guys. That’s my stock market membership group. Make sure you get in, there’s only two weeks left actually less than two weeks left before the price goes up to $49.
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