by Richard Young | March 15, 2012 12:10 pm
Common stocks are, of course, one of the best ways to play the market. Right now I’ve got a current list of 10 stocks that curry my favor, and here they are, in no particular order:
1) American Express (NYSE:AXP): My top pick is American Express, the world’s largest card issuer measured by purchase volume. AXP achieves success by focusing on high-spenders, and is the premium card network for that demographic. On average, American Express card members spend 3.5-4 times more than Visa and MasterCard users, respectively. To attract customers, AXP built a network that is recognized as a global leader in customer service. AXP has earned five consecutive J.D. Power and Associates awards for highest customer satisfaction among credit card companies.
American Express focuses on attracting quality customers. Its card members have the highest credit ratings among the major card issuers. In the fourth quarter, American Express had a low loan-loss rate of 2.3% –the lowest rate in its peer group, which averaged 4.52%. The lower loan losses came as American Express card members spent a record amount on their cards in the quarter.
2) Procter & Gamble (NYSE:PG): At the Daytona 500, a crash by the #42 car sent 200 gallons of jet fuel from a jet dryer spilling across the track. Out came the cleanup crew armed with instantly recognizable orange and blue boxes of Tide detergent. Great branding has powered Tide’s success for over 60 years. Tide is one of P&G’s 24 billion-dollar-brands –those generating a billion dollars in revenue a year.
3) Norfolk Southern (NYSE:NSC): You should key in on industries with high barriers to entry when exploring investment opportunities. Take a look at a map of Norfolk Southern’s railways and it is hard to imagine any company building a competing network. With rights-of-way more than a century old, Norfolk’s rails crisscross the eastern U.S. through the largest metropolises, in and out of Appalachian coal country, into the heart of the Midwest manufacturing states, and all the way to the Gulf of Mexico.
4) Nestlé (PINK:NSRGY): Performance at my long-favored Nestlé has been improving. Management, led by Paul Bulcke, is cutting administrative costs and expanding sales through organic growth.
5) NuStar Energy (NYSE:NS): Strong results are being logged at NuStar thanks to its pipeline and storage businesses. The company owns 204 storage tanks in the U.S. and Mexico with a combined capacity of 4.5 million barrels of oil and petroleum products. NuStar also owns all or part of nine crude oil pipelines spanning 783 miles, and another 24 refined product pipelines stretching 3,795 miles. NuStar owns valuable assets in prime locations.
6) T. Rowe Price Group (NASDAQ:TROW): In February, T. Rowe Price announced a 10% quarterly dividend increase to 34 cents per share. T. Rowe Price has increased its annual dividend for 26 consecutive years. I urge you to invest in companies with consistent records of increasing dividends year after year.
7) Lockheed Martin Corp. (NYSE:LMT): As warfare evolves into cyber-warfare, America’s military industrial companies are evolving too. The brain trusts that were once pioneering America’s first jet fighter, the Lockheed XP-80, and the Trident missile are turning attention to the cyber battlefield. To that end, Lockheed is a mission partner in the Department of Defense Cyber Crime Center, known as DC3. The facilities at DC3 house the world’s largest accredited digital forensics laboratory used to track down cyberspace criminals.
8) United Technologies (NYSE:UTX): United Technologies’ 50-day moving average crossed its 200-day moving average behind a powerful breakout. After a consolidation near $70 a share and then a test of $80, the price broke through the $85 range. The next resistance level for UTX shares is $90.
9) EnCana Corp (NYSE:ECA): New horizontal drilling technologies have allowed EnCana to increase the length of its horizontal wells up to two miles. Using a single drilling pad to drill a wheel-spoke pattern of horizontal wells through resource rich rock has allowed EnCana to minimize surface impact.
Today, EnCana can drain the gas from a six-square-mile area using only one drilling pad. Efficiencies in operations are paramount in today’s natural gas market.
10) Graco (NYSE:GGG): CEO Patrick McHale began his career sweeping floors at Minneapolis Molds and Engraving. Management saw promise in the young McHale and taught him as a machinist. He put himself through accounting school running machines there. In 1989, he joined Graco as a graveyard shift supervisor. To say McHale knows the business from the bottom up is an understatement. McHale has molded Graco into one of America’s uncommon exporters, with 90% of its manufacturing within the U.S. and over half of its sales abroad.
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