With a lackluster jobs report last week and continued uncertainty over trade and politics, few expect the stock market to perform as well in 2020 as it did last year. So, where can you put your money to work this year? Ralph Bassett, head of North American equities at Aberdeen Standard Investments, gave Yahoo Finance three of his picks to consider.
Charles Schwab (SCHW)
This pick depends a lot on the approval of its deal to acquire TD Ameritrade (AMTD), Bassett says. “Assuming we get approval of the deal, that will drive cost synergies for the business and really make it a leading platform,” he notes. “But really the driver is...cost savings paired with the revenue synergies, and that will be assets coming onto their balance sheet from TD over time.” He adds that right now the stock’s valuation has not priced in that upside.
Kansas City Southern (KSU)
The $16 billion railroad is implementing precision scheduled railroading, or PSR, which aims to increase operational efficiency for the freight hauler. In addition, as Bassett points out, 40% of Kansas City Southern’s volumes are cross-border. That means the likely adoption of the USMCA trade agreement between the United States, Canada and Mexico will further benefit the firm. “We think the stock has upside, roughly 20% from here,” Bassett says.
Calling itself the “leading cloud contact center platform for the digital enterprise,” this $4 billion tech play will benefit from other companies’ continued focus on the customer experience, Bassett argues. “They’re a native cloud player and are really seeing demand accelerate,” he said. This play may be one for the longer term because, as Bassett notes, “we think this company has the ability to scale margins over the next decade, but they’re investing aggressively right now to drive those volumes of customers.”