I am constantly researching stocks. Literally scanning through hundreds, if not thousands, per week to boil down to the ones that end up in my Reitmeister Total Return portfolio.

So you could say I am a tough critic. That’s because my investment process demands that the stocks meet a lot of vital criteria that points to future outperformance. For example, why settle for just growth, when you could also get value, momentum and income as well? The more boxes that a stock checks, the higher the chances for a winning trade.

With that backdrop in place, let me share with you my 4 favorite stocks right now. I bet that once you research them they will be some of your favorites too.

Alibaba (BABA)

Let’s start with the easiest pick…Alibaba. For every reason that you have admired the US based FANG stocks, that is exactly why you should appreciate the upside potential for this Chinese ecommerce giant.

The beauty of BABA is that the long term growth potential may even be greater than the FANG stocks given the still large percentage of the Chinese population that is not yet online. Plus BABA has aspirations to go beyond their native borders to provide ecommerce and cloud services in other expanding parts of the globe.

When you add it altogether you understand why analysts expect BABA to achieve 26% annual earnings growth into the future. But given the average earnings beat of 18% the past four quarters, then it says that growth may be even better than expected.

For those saying “Hey…what about the Coronavirus in China?”. Well, that still is a near term concern for the economy. But in general what it does is drive people to stay home more often instead of being out in public with other people who may be infected. And the more often you are home…the more you are likely to go online using services from companies like BABA.

Long term investors will find it easy to look past the Coronavirus to the impressive long term growth horizon. And value investors will enjoy buying BABA on this healthy pullback to $210 when the average target is nearly $260 with a street high $310 from 5 Star analyst Aaron Kessler from Raymond James.

Grocery Outlet (GO)

Grocery Outlet is a truly unique concept that has been compared to the TJ Maxx of grocery stores. And the long term success of TJX shows up quite clearly in the $73 billion market cap.

But I also think GO has a tinge of Trader Joe’s wrapped up in there too. And as more people get exposed to their surprising mix of quality merchandise and outrageously low prices…they will become loyal customers. This fact is most evident in their outstanding 5.1% same stores sales metric from the past quarter.

For as impressive as the growth opportunity is to expand across the country…I am actually surprised at how much upside shares have to fair value at this time.

The average target stands at $39. But the analyst from Jefferies, Randal Konik, was not shy putting out his street high of $51 after seeing the last spectacular earnings report. So your entry today under $32 seems quite tempting with the impressive upside potential.

All growth stocks are risky. Especially those riding a new retail trend because in the end it could just be a fad that makes the company a flash in the pan.

But every now and then you really can get onboard a juggernaut that sets the industry on fire for a long, long time. I like the odds that Grocery Outlet could be just that stock and is worth us putting it in our basket today at this attractive price.

Helen of Troy (HELE)

Indeed there is a lot of beauty to this consumer focused stock that has produced a string of 16 straight earnings beats. No wonder shares are up 123% in the past 5 years. This is a sign of operational excellence at HELE that is showing no signs of slowing.

Let’s take a step back for a second so you appreciate all the quality brands that make up the Helen of Troy stable:

• Revlon
• Braun
• Hydro Flask
• OXO
• Honeywell
• PuR
• Vicks
• And more

No doubt you recognize many of these Helen of Troy brands. And quite likely they are well represented in your home.

That is the driving force of HELE’s business. A strong line up of brands well positioned to a very healthy consumer leading to exceptional results. The benefit of which was made loud and clear in HELE’s latest earnings beat that propelled shares up to $200 before the Coronavirus sell off took its toll to $171 right now.

$171 is a nice entry point for a stock where the average analyst sees $209 as fair value. But given how often they beat estimates and raise the earnings outlook, then I still believe that $250 is quite realistic for HELE by the end of the year.

Simply Good Foods (SMPL)

There is so much goodness packed inside these dynamic food company shares. First, is the exciting growth story because they are one of the leaders in plant based protein products (one of the biggest food crazes around…just ask Beyond Meat).

The success of the company in recent years is far from over as Wall Street analysts are still expecting 25% annual earnings growth into the future. Meaning this is not a sleepy, defensive food company like General Mills or ConAgra.

The most recent earnings beat for SMPL had analysts drooling over themselves including a 20% increase in earnings estimates for 2020. This also kicked the value equation for SMPL into high gear as the average target price was raised to $33. This represents a stellar 47% upside from the current entry price.

Just for clarity, SMPL is a plant based food company with a PE of 25. Whereas Beyond Meat is a plant based food company with a forward looking PE of 234  (not a typo!). Don’t get me wrong. I am not saying that SMPL has the same growth potential as BYND, but I am very much saying it is a vastly superior investment because you are paying a LOT LESS for the expected growth and this greatly increases the odds of success.

Given that many investors will see this as a safe haven food stock during troubled times, then you can appreciate that SMPL offers ample reward with modest risk.

What to Do Next?

As stated up top, these 4 stocks are all current positions in the Reitmeister Total Return newsletter. The methods used to pick these stocks have been honed over my 40 year investing career.

I invite you to learn more about…

• My stock selection method
• Current market outlook
• How to navigate this Coronavirus sell off
• And all 11 picks in the portfolio

All you need to do is start a 30 day trial to the service. Do that now by clicking the link below:

30 Day Trial to Reitmeister Total Return

BABA shares . Year-to-date, BABA has declined -0.53%, versus a -3.97% rise in the benchmark S&P 500 index during the same period.

About the Author: Steve Reitmeister

Steve is better known to the StockNews audience as “Reity”. Not only is he the CEO of the firm, but he also shares his 40 years of investment experience in the Reitmeister Total Return portfolio. Learn more about Reity’s background, along with links to his most recent articles and stock picks. More...

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