This is the list of stocks that I’m currently watching and would love to buy. Some fit into my longer term portfolio, others into this particular experiment. I’ll give reasoning for each. The price given is the closing price on the day that I first put it on this list. Be warned however, I’m not suggesting you buy the stocks at this price. I’m keeping an eye on these stocks, but that doesn’t necessarily mean I want to buy in at these prices.
Contrarian
Home Depot (HD) $27.01 – This will be a great stock, someday. Right now, they are hurting from the housing slow down. It is selling at a P/E of about 10, which is ridiculously low for a premium company. This is a wide moat company and has some tremendous advantages over it’s competitors. It produces Returns on Equity well into the 20% mark. However, the housing market has a ways to go before we see daylight, so money invested in Home Depot is likely to be dead money for a good year.
Jacobs Engineering (JEC) – We are about to go into a recession. Why on earth would I want to buy an engineering company? Aren’t people going to stop building things? This might definitely happen except for one thing. The government is going to try and buy its way out of this recession. There is going to be a boom in infrastructure building, and I think Jacobs engineering will benefit from that.
Dell (Dell) $8.12 2/19- This stock is just so cheap. It has a market capitalization of about $16B. About a third of that is cash. It trades at a PE of about 6. Now I know that PC sales are going to go down over the next few years. But this stock just looks so ridiculously cheap.
Ultrashort Treasuries (TBT) $47.37 2/19 – Everyone is fleeing to treasuries. At some point this is going to unwind.
Citigroup (C)
Wells Fargo (WFC)
General Electric (GE) 15.00 – This company is at lows it hasn’t seeing a long time. It’s dividend yield is close to 8%.
Dow Chemical (DOW)
Broadcom (BRCM)
Conoco Phillips (COP)
Good Growth
McDonalds (MCD) $60.31- This stock is on a tear the last year and a half going from the low 30′s to a little over $60 today and I don’t think its going to stop anytime soon. If you are like me, you think that growth in the US is about to slow. That means you need to look for stocks that can do well in an environment, and more importantly have a strong international presence. The one thing to watch out is that this stock has gone up so much so fast, but I think this run still has some legs.
Long Term
Nike (NKE) $42.81 2/19 – Great company that will be around when it is all said and done. Trading cheap and has a great balance sheet and cash flow.
Pepsi (PEP) $77.71 – Like McDonalds, Pepsi has had very solid growth over the last couple of years. It is much more than just Pepsi with brands like Cheetos and Gatorade. A 5 year chart of Pepsi looks impressive with the stock coming from the mid 30′s to it’s present level. However, it still looks to be in it’s stage two accumulation phase. It also has some good international exposure and I believe it can easily reach $100 in a short amount of time. Strong brands and good growth prospects internationally make this a great long term growth story.
Diageo (DEO) – Diageo is the maker of premium distilled spirits. Think alcohol. People drink no matter what the economic climate. They probably drink more in this awful economic environment. Their list of brands is a who’s who in the world of alcohol. They own such brands like Smirnoff, Johnie Walker, Captain Morgan, and Guinness. It is selling around the market multiple but it is a premium stock. Add to that it now has close to a 5% dividend yield, and it is looking pretty good.
Novartis (NVS) – The world is getting older, and the world is going to need drugs. Novartis is a very successful European drug maker with an excellent drug pipeline. They are extremely well diversified in the health care sector, and should be able to weather any economic environment. I especially like that it even has a generics division which should offset any losses as several high profile drugs come off patent
Amazon (AMZN)
Disney (DIS)
Chinese Yuan (CYB)
I'm a guy in his 30's who likes to write about life, money, and work. I went to a great school and got a great job doing something I really enjoy, leading smart people build great things. I like to give advice to people so I can help them achieve whatever it is they want out of life. 