Double Journey

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.

US Bancorp (USB) $32.54 - The financial sector is a mess. But when you have environments like this it is a great time to look for stocks which the “baby has been thrown out with the bathwater”. This is a Warren Buffet pick, so that in itself should tell you something. But you need to be cautious year. Buffet has a very long timeline, and this stock will probably under-perform for sometime. The credit market is difficult, even for corporations that don’t have a lot of sub-prime exposure.

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.

Potash (POT) $129.19 - This is a global growth story. Potash makes fertilizer, and as the world continues to grow, food needs to be grown to feed them. They have a virtual monopoly on potash which is a key component in plant nutrition. As countries like China, Brazil, and India have to feed their growing population, they are going to have to turn to fertilizers created by Potash to grow their crops. It isn’t just a global growth story though. America is growing the demand for their product as ethanol production is taking off and more and more corn needs to be produced.  Recently, this has gone down significantl with the rest of the market.  It is dropping fast becasue this is where some fresh cash had gone when the market was good, so this is where people pull their money first.   I still like the long term picture, but am cautious here.

Long Term

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.

Oracle

Berkshire

Short Term