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Should you buy Stocks with Visionary CEOs?

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  • (0:30) - Should You Be Investing In Visionary CEO’s?
  • (6:30) - Jeff Bezos of Amazon 
  • (10:30) - Restoration Hardware's Gary Friedman 
  • (15:45) - CEO of Telsa: Elon Musk 
  • (17:35) - Nvidia’s CEO: Jensen Wong
  • (19:25) - The Face of Alibaba: Jack Ma
  • (22:00) - Mark Zuckerburg and Jamie Dimon: FB & JP Morgan Chase 
  • (24:15) - Episode Roundup: Podcast@Zacks.com

Welcome to Episode #135 of the Zacks Market Edge Podcast.

Every week, host and Zacks stock strategist, Tracey Ryniec, will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life.

In this episode, Tracey is going solo to discuss a topic that is near to her heart: visionary CEOs.

Should you buy the stocks of companies that have visionary CEOs? Or is it too risky?

What’s the Definition of a Visionary?

First, it would be helpful to define what a visionary is. Tracey consulted a dictionary and came up with the following:

1.      A person thinking or planning the future with imagination or wisdom.

2.      One who sees.

3.      One who is ahead of their time.

Often, the ideas espoused by a visionary aren’t appreciated or accepted.

That’s where the “risk” comes in for investors.

Even Steve Jobs, long considered one of technology’s greatest visionaries, was fired from Apple before he came back to lead his company to new product greatness through the iPod, the iPad and the iPhone.

Who are today’s visionaries?

5 Stocks with Visionary CEOs

1.      Amazon (AMZN - Free Report) is helmed by Jeff Bezos. Not only is Amazon the king of online retail but AWS led the cloud revolution over the last 5 years. Shares are trading with a forward P/E of 130 but earnings are expected to grow 180% in 2018. Is it too late to buy in?

2.      RH (RH - Free Report) is led by CEO Gary Friedman. He is bucking the online retail trend by building bigger gallery stores and rolling out expensive catalogs, which RH calls Source Books. He also is expanding on the experience concept by growing in the hospitality segment. Is Friedman building a new retail experience?

3.      Tesla (TSLA - Free Report) is still an experiment in the making. Led by larger-than-life CEO Elon Musk, questions are swirling over whether Musk can finally close the deal and make some money. Earnings are only expected to be up 4% this year but analysts see a 116% jump in 2019. Should you be a believer?

4.      Nvidia (NVDA - Free Report) is one of the last of the old Silicon Valley guard. Co-founded by the current CEO Jensen Huang, along with Jobs and Larry Ellison, he’s the last of the original valley tech leaders. Nvidia is the leader in the AI revolution and is the center of the gaming chip universe. Nvidia shares have come down off their recent highs and now trade at just 30x. Is this a buying opportunity?

5.      Alibaba (BABA - Free Report) has claimed the Chinese Internet retail throne but it was a long road for co-founder Jack Ma to get there. He’s no longer the CEO but is still Executive Chairman. Does he have any control over the future of the company or is he just a figurehead? Alibaba shares are trading with a forward P/E of just 29.

There are probably a few other companies and CEOs you think should be on this list, such as Mark Zuckerberg at Facebook.

Why didn’t Tracey include Facebook on the list?

Find out the answer to that, and more, on this week’s podcast.

[In full disclosure, Tracey owns shares of AMZN, RH, and FB mentioned on this podcast.]

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