These 6 Stocks Have Mostly Struggled In 2015 But Could Double Next Year!

The market has seen a bad performance over the year. First a solid gain and than a sharp sell-off. What matters now is the Fed rate hike. 

Yes, interest rates will go up, the U.S. economy is doing well but the rest of the world does not and due to the fact that American corporate acting global, it will also hurt their business, not only though a strong dollar.

Will 2016 a good or bad year?

Well, we all have no crystal ball but the past has shown that the stock market is doing well in times of rising rates. The only question is when the new interest cycle will end. At 2%, 7% or even at a higher rate?

But even if the market trades flat or lower in 2016, it doesn’t mean that investors looking for stocks to buy just have no hope of meaningful upside. In fact, there are several stocks that have fallen unjustly in 2015 — but thanks to huge catalysts in 2016, they’re stocks to buy with expectations that they could rip off 100% gains or more! 

Today, we’ll look at six such stocks to buy that have enormous, game-changing catalysts that should spark significant gains in 2016 — perhaps even into the triple digits.

The focus is not only on yields. You will finds some stocks off dividend growth and off dividend income. 

Here are the results...

Did Social Media Predict Carl Icahn’s Biggest Trades?

The following article was written by our guest author Insider Monkey. There are a select few money managers whose words can move entire markets, but up to this point, only one has mastered the medium of Twitter [TWTR]: Carl Icahn. After creating an account earlier this year, the billionaire has disclosed a few big positions on the micro blogging site, including a purchase of Apple [AAPL] and a sale of Netflix [NFLX] stock.

While the media has had a lot to say about Icahn’s Twitter account, no one has taken the time to examine his trades in terms of social media sentiment. For someone who is likely the world’s most socially active hedge fund manager, surprisingly little analysis has been done in this realm.

With the help of Market Prophit, a company that converts stock-related social media posts into easy-to-read data, we’re able to look at how much chatter Icahn’s biggest trades created. More interestingly, it appears that some of this buzz actually predicted the moves before they happened.

Netflix

Netflix was the recipient of a major cut by Icahn late last month. In a 13D filing and subsequent tweet after the market’s close on October 22nd, the investor reported a 4.5% stake in the streaming video company, about half of what he previously owned. This move came 24 hours after Netflix’s stock price had surged on promising third quarter earnings.

Market Prophit’s CEO, Igor Gonta, revealed to us that on the morning of the 22nd, social media circles were already buzzing about a major seller “doing large block sales” of Netflix, and Icahn’s name was visibly in the rumor mill. By the time the market had closed, Icahn’s official SEC disclosure pressed the stock to drop almost all of its gains from the previous day’s earnings report.

Apple

Any analysis of Carl Icahn and Twitter must include Apple. On the afternoon of August 13th this year, Icahn tweeted that he had a “large position” in the tech giant on the basis of undervaluation, adding that a conversation with Tim Cook was on the table. As Gonta pointed out to us, shares of Apple rallied by nearly 2.5% just 20 minutes after Icahn’s initial tweet, and social media sentiment turned positive approximately two minutes prior to the reveal (see graph here).

The next major event on the Icahn-Apple timeline was on October 1st. Halfway through the morning on this date, Icahn tweeted about the dinner he had with Tim Cook the night before, in which he reiterated his desire for Apple to pursue a $150 billion share buyback plan.

Market Prophit again picked up on bullish chatter before Icahn’s tweet went live at 10:23am. This time, an uptick in positive social chatter led the tweet by a full 40 minutes, and shares of Apple had already risen by almost one full percentage point by half past ten. According to Gonta, social media sentiment turned negative immediately following Icahn’s tweet “because the price had already run up,” indicating that a classic “sell the news” phenomenon had just taken place.

Sitting here in early November, it’s unknown if Icahn will succeed in his quest to convince Apple that a larger buyback will lead to a $1,250 stock price. What we can say with confidence, though, is if the hedge fund manager is active on Twitter again, social media chatter may predict it.

Disclosure: none

Why Warren Buffett Won’t Buy Twitter

By Guest Author Insider Monkey. It’s widely assumed that Warren Buffett doesn’t invest in technology stocks, but in recent years, this belief has contrasted with reality. After accounting for zero percent of his equity portfolio at the end of 2010, the tech sector now makes up one sixth of Buffett’s stock holdings. At Insider Monkey, we’ve discovered that hedge funds and other prominent investors’ best stock picks exhibit market-beating potential, so it’s worth paying attention to these developments.

In the case of Buffett and Berkshire Hathaway, they're not your typical technology investors. They follow a very strict set of rules when selecting investments in this space, which, through our observations, boil down to finding tech companies that: (1) trade at very cheap multiples, (2) pay a dividend, and (3) have sustainable product offerings that will safeguard their survival over the next 15 to 20 years.

With this in mind, the next logical question in many Buffettologists’ minds is: will the Oracle buy shares of Twitter [TWTR] once it becomes a publicly traded entity?

This was the same question many Facebook [FB] enthusiasts asked after its IPO last year and to no surprise, many mega-investors bought in. Buffett didn’t, however, and it is evident that Facebook broke all three of the rules described above. The stock traded at more than 70 times earnings upon going public and there simply wasn’t any assurance that it wouldn’t go the route of MySpace, Digg, Xanga and the rest of social media’s fallen giants. It also didn’t offer a dividend, and still doesn’t to this day.

Twitter faces all three of the same problems.

According to most estimates, Twitter will be valued near $11 billion when it goes public, giving it a per share value between $19 and $20. At this price, the company will theoretically trade at about 18.3 times this year’s estimated revenue, which most conservative analysts expect to be around $600 million.

Facebook, meanwhile, is valued at a price-to-sales multiple near this mark, while LinkedIn [LNKD] is also in the same vicinity. It’s unreasonable to expect that Buffett would be attracted to a valuation in this range if he hasn’t been before.

Equally as important, we also expect that the billionaire will take issue with Twitter’s outlook over the next 15 to 20 years. While some may argue that the micro blogging service can generate more advertising revenue than a Facebook or a LinkedIn for example, there’s still no guarantee that Twitter will be around in two decades. Obviously, there’s no such thing as 100% certainty in any industry, but there are fewer risks facing Buffett’s favorite investments, like Wells Fargo [WFC] and Coca Cola [KO], than there are to any social media company.

Putting the final nail in the proverbial coffin, we also know that from Twitter’s S-1 filing, it has no plans to declare dividends “in the foreseeable future.”

So, if Warren Buffett won’t buy Twitter, what stock is responsible for the majority of his investment in the tech sector?

As reported in his latest 13F filing, the answer is IBM [IBM]. Buffett and Berkshire hold almost 15% of their $89 billion equity portfolio in the information technology giant, and it meets all three of our aforementioned criteria. IBM trades at a mere 9.9 times forward earnings, has five diversified business segments from IT infrastructure to software, and it pays a dividend yield above 2%.

Disclosure: none

4 Hedge Funds Heavily Invested in Apple’s Fate

Written By Guest Author Insider Monkey. There are more than 8,000 hedge funds in existence today, and of this group, we at Insider Monkey track close to 600 of the best and brightest. The best picks of the best hedge fund managers have market-beating potential (see how we returned 47.6% in one year), and within this group, there are many ways to parse the data.

This week, we’ve covered some important tech topics in particular, like why Warren Buffett probably won’t buy Twitter [TWTR] and the peculiarities of Longbow Securities’ moves in NQ Mobile [NQ]. One subject that has been flying under the radar, though, is Apple [AAPL] and the hedge funds that surround it.

According to one Apple news site, the tech giant’s latest earnings release has been met with mostly optimism on Wall Street, especially from JPMorgan’s Mark Moskowitz. Moskowitz expects Apple’s current share price to hit $600 by December of 2014, primarily based on strong iPhone sales, the iPad’s potential in future quarters, and gross margins that are “good enough for long-term investors.”

With that in mind, we thought it’d be useful to run through the hedge fund managers that have stayed committed to Apple over the long run. Here are the four biggest bulls that have held the stock for at least two years:

David Einhorn

David Einhorn first bought Apple in the second quarter of 2010 and in the three years since, the manager of Greenlight Capital has upped his stake by nearly eightfold. While Tim Cook and the rest of Apple’s leadership didn’t adopt Einhorn’s iPref idea, his latest Q3 shareholder letter reveals he’ll likely remain bullish here for the “longer-term.”

David Shaw

Another billionaire, David E. Shaw, has held shares of Apple for the better part of the last decade. The manager of D.E. Shaw & Co doubled his exposure to the stock in the last round of 13F filings, and it actually represents the largest long-only holding in his entire equity portfolio. Shaw and Einhorn have the two largest Apple stakes of the funds we track, both of which represent nearly $1 billion in market value apiece.

Philippe Laffont

Philippe Laffont’s Coatue Management, meanwhile, has been a major Apple investor since the fourth quarter of 2004. Laffont founded his tech-focused hedge fund in 1999 after working for the legendary Julian Robertson, and Apple was his top stock pick for all of 2011 and most of 2012 before he slashed over half of his stake in the fourth quarter.

The fund manager now owns over $600 million in Apple stock and has recouped all of the shares he sold at the end of last year. While we don’t know exactly when Laffont cut his stake in 2012, it’s evident that he avoided much of the swoon that plagued investors who stuck with their gut, and actually bought back when shares were cheaper.

Ken Fisher

Although he’s technically not a hedge fund manager, Ken Fisher is a prominent investor worth tracking. Fisher Asset Management oversees nearly $40 billion in equity investments alone, and while it has been a long-term shareholder of Apple, the firm has only recently upped its stake to significant levels. At the halfway point of 2012, Fisher held $50 million worth of Apple stock; today, that number is more than $600 million.

It’s no secret that Fisher likes growth stocks that also trade at reasonable valuations, so we can understand why he’s bullish here. Apple trades at a PEG ratio near 0.9, and the sell-side still expects it to generate earnings growth of 15% a year over the next half-decade. That forecast trumps peers like Google [GOOG] and Microsoft [MSFT], and it’s cheaper than both.

Disclosure: none