Been tinkering with the stock market, I've found what I consider to be some pretty decent long-term picks, these guys all share certain attributes that recommend them to me as having strong growth potential. I have acquired varying amounts of each of the four stocks I list below, I'd like to take a moment to explain each of my choices for you.
Based on my research of expert opinion, their business plans, current market share and market share trends these firms are well-established imho to continue growth in the long-term.
Reviewing the share-pricing charts between late 2008 and early '09 all of these companies suffered significant stock value loss , and all of them have since made noticeable recoveries in the freshly crestfallen market. Here's what I have for you:
BX - The Blackstone Group, private equity
In a time of bleak outlook for many small businesses (and plenty of big ones as well) there are investors that have managed to acquire record amounts of available venture capital, and are buying up floundering companies at yard-sale prices, many times, all that is needed is enough cash to float them until the economy recovers, when that happens...
My favorite pick, already my best growth, with lots of potential and a high market cap.
Strong long and short-term, high-yield, med-risk
SPLS - Staples Inc., office supply
As an employee of Staples (when the military permits) I have had first-hand experience seeing how well they handle new challenges. Staples, unlike its main competitors, (some of whom didn't even make it to the recent market crash) continues to do exceptionally well. Not to say that everything is hunky-dory, there are plenty of problems, cost cutting, a retail-wide struggle to keep products moving, not being the least of them, make recovery a challenge. But here is the difference, Staples' innovative business plan and aggressive market expansion are big reasons they have stayed so strong. Staples is strong even compared with the relatively fast recovery my other picks are making.
With shares already near pre-recession highs, I rate Staples:
Strong-long term, low risk, low-yield
PBR - Petrobras, Multi-national oil producer
Brazil is ranked 14th in the world in oil production in 2007 according to NationMaster.com. So it stands to reason that the country's largest oil producing company, although no longer legally a monopoly, but still producing about the same quantity that the country its headquartered in does, (and more I might add then Iraq's national total) would have a pretty hefty market share. A new off-shore drilling opportunity promises significant increase in market value, while Brazil is proposing a new, entirely state-owned company that would have sole rights to these new drilling sites, a recent U.S. offer to loan Petrobras in excess $2b to begin digging, tilts the scale quite a bit in their favor.
My outlook:
Strong med-term, med-yield, low-risk
NFLX - Netflix, online movie rental
Like McDonalds and Wal-Mart, the budget option nearly always prospers in times of economic hardship. But there are some interesting intricacies in this case. First-off, regardless of conditions working in favor, there are going to be those that cancel their accounts and for all intents and purposes cease to be sources of revenue, so thats the down-side. Now the up-side. Customers who in the past were willing to drive however far to a video rental store, pay a relatively much higher price and deal with the inconvenience of driving back and returning the movie within the rental period or be forced to pay fines, now with the onset of hard financial times, have the relatively increased fiscal incentive of retaining the same entertainment experience at a much lower cost and with far less hassle. Suddenly leaving the comfort zone associated with the familiar venue seems much less momentous, and now we have a trend of migration. Of course this only helps others see the alternative in a more favorable light, since after all, aren't most of our decisions based on social norms? All this has been true of the competition between the largest store-based video rental company and the largest online-based. Stocks in Blockbuster have dropped steadily since early 2005 from upper 9s, to now under a dollar. Netflix climbed from lower 10s to mid-40s in the same time period. Its been happening on its own, this recession may just be the straw that breaks the camels back.
My outlook:
Strong long-term, med-yield, low-risk
A number of stocks continue a virtual flat-line when compared with pre-recession pricing. My watchlist consists of stocks that although at first glance appear to be dead-end investments, deserve a closer look. The same principles apply as above, these guys are just waiting for a number of various factors and as far as I'm concerned, time, to become investments.
ODP - Office Depot, an office supply retail chain and a competitor to one of my favorites, waiting to see an upwards trend, since they haven't exhibited any signs of upturn yet, I'm in a prime position to take advantage of one the moment it begins. Ear to the ground.
HD - Home Depot, a home improvement warehouse chain, tough economic times make construction and therefore construction supplies less-lucrative industries, when a recovery begins, I plan on making an educated decision between several solid options.
LOW Lowes, so far my second option for a home improvement warehouse.
WFMI - Whole Foods Market, a grocery store chain distinguished by a focus on health food, local produce, and specialty foods and brands, with an excellent reputation for high standards of treatment for employees, lastly an innovative and energetic board of directors makes this a strong near-future investment.
ORA - Ormat Technologies produces energy using alternate means.
Excerpt from Ormat Technologies, Inc. SEC Filing dated March 12, 2007
"Most of the projects that we currently own or operate produce electricity from geothermal energy sources. Geothermal energy is a clean, renewable and generally sustainable form of energy derived from the natural heat of the earth. Unlike electricity produced by burning fossil fuels, electricity produced from geothermal energy sources is produced without emissions of certain pollutants such as nitrogen oxide, and with far lower emissions of other pollutants such as carbon dioxide. Therefore, electricity produced from geothermal energy sources contributes significantly less to local and regional incidences of acid rain and global warming than energy produced by burning fossil fuels. Geothermal energy is also an attractive alternative to other sources of energy as part of a national diversification strategy to avoid dependence on any one energy source or politically sensitive supply sources."
This is a tough sell, its not that alternative forms of energy aren't an inevitability, it just comes down to a matter of when. This one is going to need some hefty research, and maybe a few competitors to compare against before it makes it off the watchlist.
LIZ Liz Claiborne falls into the luxury category, making fine women's (and men's) apparel, accessories and fragrance probably not going to make a big move anytime soon, but with a little time, they have a solid chance of coming out on top.
I am far from stock savvy, I've been investing for only a few months, I have however focused a large amount of that time into researching my picks as I have added to my portfolio. If anyone happens to stumble upon my blog and then in some fit of insanity reads all the way to the bottom, just be aware that my opinion while based on market research, is not founded in a profound understanding of the stock-market. Thanks for reading, hope you found my information helpful.
Stock market values were determined using charts provided by etrade.com, other sites that offer market analysis include finance.google.com and investopedia.com.
All original content except where noted by a reference and quotation marks.
