Buy Southwest Airlines and Vipshop Based on Fundamentals

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It is no secret that stocks that stay in the portfolio for a long period of time help drive the superior performance of my portfolio. When a company consistently has the type of superior fundamentals and continued sales and earnings growth that leads Portfolio Grader to assign them “A” or “B” grades for a long time, these stocks tend to soar in price often doubling and even tripling in value.

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The other day, someone asked me if there is any indicator or fundamental factor that can identify these long-term winners in advance.  Sadly, no such indicator exists. If I could identify which companies could perform a very high level for an extended period of time, I would!

The trick to finding these big winners is to have the courage of your convictions and faith in the numbers. Here are two stocks I bought because Portfolio Grader ranked them strongly, and I held these stocks despite negative press.

Southwest Airlines Co (LUV)

When I bought shares of Southwest Airlines Co (LUV) back in May of 2013, I had no idea LUV stock would still be in my portfolio 18 months later. I knew that after crunching all the numbers, Portfolio Grader told me Southwest Airlines was one of the best stocks at that time, and I should buy shares of the Southwest Airlines.

Since then, I have heard talk of imminent market crashes, predictions of dire slowdowns for the airlines because of a weak global economy and ongoing terrorism concerns. In spite of all the horrible news and dark predictions week in and week out, Portfolio Grader has told me that Southwest Airlines had great fundamentals and conditions were improving every quarter. I ignored all the noise and chatter and held the Southwest Airlines shares.

Southwest Airlines has gained 185% since I purchased LUV stock, which is still a “strong buy” in Portfolio Grader. So, more gains are probably ahead for Southwest Airlines stock.

Vipshop Holdings Ltd – ADR (VIPS)

In July of 2013, when I bought shares of Chinese online retailer Vipshop Holdings Ltd – ADR (VIPS), I had no idea how long I would own VIPS shares. Vipshop had the right fundamentals and institutions were showing buying interest. So, I added Vipshop stock to my portfolios.

Since then, I have heard all the pundits saying that all Chinese stocks were frauds, the Chinese economy was on the verge of collapse and that Chinese consumers were going to stop spending. Yet, every Monday when I consulted Portfolio Grader, the Vipshop stock ranking stayed at “buy” or “strong buy.” So, I ignored all the doom-and-gloom and held onto my VIPS shares based on the numbers as crunched by Portfolio Grader. As a result, I still own VIPS, which is an “A-rated” stock, and have enjoyed gains of more than 600% since my initial buy.

I have no idea how long I will own a stock from the time it is initially identified as a “buy” or “strong buy” stock. Earning an “A” or  a “B” from Portfolio Grader is not easy. Very few companies can keep up that type of stellar performance for an extended period of time. Those that do will reward you with huge returns. The key is to trust the numbers and ignore all the news and negativity that will swirl around the stock as it marches higher.

Louis Navellier is a renowned growth investor. He is the editor of five investing newsletters: Blue Chip GrowthEmerging GrowthUltimate GrowthFamily Trust and Platinum Growth. His most popular service, Blue Chip Growth, has a track record of beating the market 3:1 over the last 14 years. He uses a combination of quantitative and fundamental analysis to identify market-beating stocks. Mr. Navellier has made his proven formula accessible to investors via his free, online stock rating tool, PortfolioGrader.com. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.


Article printed from InvestorPlace Media, https://investorplace.com/2014/11/southwest-airlinesluv-vipshop-vips/.

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