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Blue Chip Stocks for 2010
and BeyondThere’s no denying that the last decade on Wall Street has been a downer. The Dow Jones Industrial Average closed just a few points shy of 11,500 on Dec. 31, 1999 and today is struggling to stay above 10,300. That’s a 10% loss in ten years.
But if you think this means buy and hold is dead, think again. After all, good investors never settle for simply tracking the market — they want to beat it many times over.
While most stocks fared poorly, there are a number of blue chip stocks that have soared in the last 10 years. What’s more, my calculations indicate that each one of these blue chip stocks also has very bright prospect for 2010. That means that the gains you see posted here are only the beginning, and investors can still buy in to share in the tremendous success of these market-beating blue chip stocks.
Here they are, with approximate gain in shares through today based on the adjusted closing price of 12/31/99.
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Blue Chip Stock #1 –
AmBev (ABV; +850%)Companhia de Bebidas das Americas (ABV) is translated to “the American Beverage Company” and commonly known simply as AmBev. This company dominates the Brazilian beer market with brands such as Antarctica, Brahma and Skol. Additionally, the company sells Pepsi brands, Lipton iced tea and other beverages that include mineral water and sports drinks. Along with Brazil, AmBev sells its products in some 13 other countries, including the South and Central American countries of Argentina, Peru, Ecuador, Uruguay and Venezuela.
This Latin American beverage giant has seen explosive growth of +850% since 1999, but this emerging market has shown no signs of slowing down. Expect even bigger gains in the years ahead.
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Blue Chip Stock #2 –
Apple (AAPL; +660%)Ten years ago, no one could have imagined the iPod or iPhone. And even Apple (AAPL) probably couldn’t imagine a surge of about 660% in shares across a down decade. It’s easy to see why Apple is leading the tech revolution, from digital media distribution to smart phones to personal computing.
Looking forward, the company continues to grow its iPhone footprint and plans to launch a do-it-all e-reader that could put Amazon’s Kindle to shame. I expect continued success for AAPL in 2010.
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Blue Chip Stock #3 –
AutoZone (AZO; +390%)AutoZone (AZO) operates approximately 4,100 stores in the U.S. and Puerto Rico. As auto sales have plummeted dramatically, more people are relying on aging vehicles to get around. The result is a huge increase in demand for parts and maintenance — and huge sales for Autozone.
AZO stock leaped almost 400% in the past decade and is in for a nice run in 2010 as new vehicle sales remain sluggish and auto parts are in high demand.
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Blue Chip Stock #4 – Cognizant Tech Solutions (CTSH; +870%)
As outsourcing has become increasingly necessary for businesses to remain profitable, Cognizant Tech Solutions (CTSH) has seen booming growth of almost 900% in the last ten years. Cognizant is a leading IT firm that provides a wide array of data and software services to businesses around the world. It offers its services to all manner of businesses, including financial services, health care, manufacturing and logistics, retail, telecommunications and the media.
The company enjoys big margins because most of Cognizant Tech’s software development centers and employees are located in India, although it has other development facilities in Argentina, China, Hungary and even a small operation in the U.S. As corporations continue to look overseas for workers to save costs, I expect CTSH to soar in 2010.
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Blue Chip Stock #5 – Express Scripts (ESRX; +980%)
Express Scripts (ESRX) has surged almost 1,000% since 1999 as pharmaceutical sales have skyrocketed. ESRX is North America’s leading provider of pharmacy benefit management services. Besides providing customers with home delivery, benefit design consultation and disease management services, to name a few, it also provides various specialty services like patient care.
Drugs and similar treatments have seen recession-proof sales, and as health care reform brings greater coverage and access to pharmaceuticals in the years ahead, ESRX should see continued success.
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Blue Chip Stock #6 –
GoldCorp (GG; +1,430)The current gold surge is nothing compared with the +1,430 jump in GoldCorp (GG) shares over the past decade. GoldCorp is one of the largest precious-metal mining companies in the world, operating mainly in Canada and South America. The company produces more than 2.3 million ounces of gold annually and has about 45 million ounces in proved and probable reserves. But don’t be fooled by the name — GoldCorp also owns 1.2 billion ounces of proved and probable silver reserves and 1.4 billion pounds of copper reserves.
I don’t have to tell you how hot gold is right now, but please note that silver and copper prices have been on a tear lately as well. The diverse mining operations of GoldCorp make it a great investment for 2010 and beyond.
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Blue Chip Stock #7 – Pepsi Bottling Group (PBG; +400%)
The Pepsi Bottling Group (PBG) is a blue-chip subsidiary of the iconic soft-drink company, but exclusively manufactures and sells beverages – as opposed to parent company Pepsico (PEP) that also manages brands that include Frito-Lay, Cap’n Crunch and Rice-A-Roni, among many others. This clear focus on soft drinks has kept PBG firmly on the road to profits over the past decade with shares now trading at five times the value they were in 1999. As spending on consumer staples stays strong, this heavy hitter will keep cashing in on soft drinks for many months to come.
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Blue Chip Stock #8 – Petroleo Brasileiro (PBR; +800%)
Ok, so Brazil’s energy giant Petrobras (PBR) wasn’t officially listed on the NYSE until August of 2000, but considering shares debuted at $5.25 and are now at almost $50, I consider this stock one of the standout blue chips of the decade. Petroleo Brasileiro engages in oil and gas exploration and production, with proven reserves of over 15 billion barrels of oil. Crude prices creeped up 75% across 2009, and are now pushing $80 a barrel. I expect energy prices to get even higher in the new year and deliver big profits to companies like PBR.
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Blue Chip Stock #9 – Sociedad Quimica y Minera (SQM; +1,450%)
Sociedad Quimica y Minera (SQM) is a Chilean chemical stock that started making its money with specialty fertilizers and iodine sales. This business was profitable enough, but its huge access to lithium is what really boosted shares in the last decade — to the tune of almost 1,500% gains in 10 years. Lithium is a key component in fast-charging batteries for cell phones and laptops, as well as hybrid vehicle batteries.
SQM has customers in more than 100 countries and generates most of its sales outside Chile, and should see continued success in the years ahead.
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Blue Chip Stock #10 – Southwestern Energy (SWN; 4,900%)
Yeah, the Dow is down 10% in 10 years. But don’t think that means buy and hold is dead — if you invested $10,000 in Southwestern Energy (SWN) a decade ago, you’d be sitting on about $500,000 today! This company is almost strictly a natural gas company–and that natural gas is the cleanest — burning fossil fuel. With the world’s increasing attention to green power sources, the future is extremely bright for this booming stock. And with cold weather descending across America, SWN will certainly see “brisk” business in the short-term.
