What Is the Best Sector to Invest in for 2018?

With continued growth in the online channel, shares of Shopify Inc. (TSX:SHOP)(NYSE:SHOP) may still have a long way to run.

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With a number of options to choose from for 2018, investors have the opportunity to seek out the best stocks in the best sectors. With the marijuana industry being front and centre in the news throughout 2017, many have already taken a position in this industry and are now looking for the next fantastic idea for next year. The good news is that there are several sectors that are set to move higher during 2018.

After Amazon.com, Inc. (NASDAQ:AMZN) reported quarterly earnings, which sent shares above $1,100 for the first time, it became clear to everyone that online sales were not going to be stabilizing anytime soon. Due to the increasing sales across the sector, Canadian investors seeking something closer to home have the opportunity to consider shares of Shopify Inc. (TSX:SHOP)(NYSE:SHOP) or Constellation Software Inc. (TSX:CSU).

Although shares of Shopify have been under attack by short seller Andrew Left of Citron research, the recent earnings announcement has proven to investors that the online sales channel is mushrooming. With revenues which have increased by 71% for the quarter (year over year), there are still many opportunities with significant upside for investors as the pie keeps getting bigger!

For investors seeking a sector that is more established, shares of many oil companies have started to return to pre-crisis levels, as the price per barrel has stabilized over the US$50 mark and is trending towards US$56. With a potential 10% run higher, investors may again be looking at US$60 oil and a return to profit for many companies. Although low oil prices have led to very difficult times for many companies, the reality is that companies do adapt during those times and the cost to produce a barrel of oil declines accordingly resulting from deep cost cuts.

In the oil sector, there are a number of alternatives with varying degrees of risk. The lowest-risk alternatives are shares in pipeline companies, whereas oil discovery/production companies such as Crescent Point Energy Corp. (TSX:CPG)(NYSE:CPG) and Baytex Energy Corp. (TSX:BTE)(NYSE:BTE) offer substantially greater risk and reward to investors.

As a higher cost producer of oil, shares of Baytex, at only $3.50 per share, have the potential to double in value if oil were to regain momentum above US$60. Although many are bullish on the commodity, it is important to realize that with a beta of 2.95, shares of this company could go the wrong way very quickly should oil take another tumble.

With so many individual securities to choose from in both the oil and the online sales sector, investors are in the best possible position to have a fantastic end of year and incredible 2018.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Ryan Goldsman has no position in the companies mentioned. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. David Gardner owns shares of Amazon. Tom Gardner owns shares of Shopify. The Motley Fool owns shares of Amazon, Shopify, and SHOPIFY INC. Shopify is a recommendation of Stock Advisor Canada.

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