Much like comedy, investors deliver best when they get the timing right.
I’m not saying you need to be a market timer, however. I’m talking about simply knowing how to look at the big picture — the fundamentals — and determine the time to buy into certain sectors.
For example, we’ve heard from numerous sources that global growth, while not declining, isn’t growing very fast. Domestically, the U.S. has already lowered its growth estimate for the year and the Federal Reserve’s forecast for two rate hikes could crumble, as the market expects just one instance of rate tightening this year.
That means slow growth stocks are the way to go. Solid companies that can endure this middling market are the way to go. It doesn’t matter what sector they are in, it’s simply a matter of how well they are managing to grow when growth is scarce to come by.
These are A-rated stocks with great fundamentals that can form the bedrock of your portfolio.
Sturdy Stocks to Buy: Nippon Telegraph & Telephone Corp (ADR) (NTT)
5-Year Growth Rate: 18%
It may be hard to believe, with all the turmoil in Asia, but Nippon Telephone & Telegraph (NTT), the world’s largest mobile phone carrier, is up almost 15% year-to-date.
That is a strong indicator that not all of Asia is linked to the fortunes of China. Actually, NTT seems more focused on the U.S. market now.
It recently bought the Services division from Dell Inc (DELL) — an IT services provider group that delivers infrastructure and cloud services, application services, and business process outsourcing.
Basically, NTT is looking to the U.S. cloud for growth. This is a big deal for Japanese companies. Traditionally, outside of media and automotive, the big firms simply focus on their regional and domestic market. Adding this new growth into the mix is likely why the stock is getting attention.
This expansion also helps diversify its base. That’s a good thing these days as well.
Sturdy Stocks to Buy: Korea Electric Power Corporation (ADR) (KEP)
5-Year Growth Rate: 25%
Korea Electric (KEP) is the power company of South Korea. And it has been around for 116 years, which means it has seen its share of ups and downs — including its own civil war. It was also succeeding when China wasn’t the center of the world’s attention, but a backward, isolationist Communist power.
The point is, KEP is resilient. And after a rough go of it for the Korean economy, KEP is back on a growth track. Nothing spectacular, mind you, but solid and sustainable.
It is also involved in markets outside of Korea, and is one of the top builders of nuclear power plants. New nukes are much more reliable than the older models and they can generate massive amounts of power with zero emissions.
KEP is either operating or building thermal power plants from the Philippines to Mexico to China and Saudi Arabia. Simply put, it has a growing international market and will also benefit from a renewed Korean economy.
Sturdy Stocks to Buy: KLA-Tencor Corp (KLAC)
5-Year Growth Rate: 21%
KLA Tencor (KLAC) builds testing and measuring equipment for the semiconductor industry as well as the LED and data storage sectors.
That means as long as businesses and people are buying devices with chips and chipsets, KLAC will be along for the ride.
This is the boring underbelly of technology that we find indispensable. If you want reliability and consistency, which is absolutely essential in tech equipment, you need to make sure it is up and running. The industry has the “five nines,” which is basically a system has to be available 99.999% of the time in any given year.
KLAC is one of key companies to ensure that the five nines are met.
Even as many tech firms have slowed, KLAC has registered a 4% return year-to-date and it has a healthy 2.9% dividend as a cherry on top.
Sturdy Stocks to Buy: Bruker Corporation (BRKR)
5-Year Growth Rate: 13.5%
Bruker (BRKR) has been around for more than 50 years now, and this is likely the first time you have every heard of this 6,000-employee company that operates 90 offices around the world.
That’s because it’s a behind-the-scenes player that builds analytical instruments for a vast array of industrial production processes. From microscopes to MRIs to metallurgy to manufacturing quality control, BRKR has a piece of equipment to help.
But the most interesting space right now is its healthcare work. Every aspect of the healthcare sector is concerned about costs. That means testing and analyzing images are key factors in preparing doctors and healthcare professionals for an accurate diagnosis. And BRKR has plenty of products and equipment to help.
And it looks like more people are spotting this hidden gem — it’s up 18% year to date.
Sturdy Stocks to Buy: Smith & Wesson Holding Corp (SWHC)
5-Year Growth Rate: 15%
Smith & Wesson (SWHC) has been around in one form or another for more than 150 years. That includes the American Civil War. It was the first company in the world to sell what we consider to be a modern handgun — a repeating fire weapon with self-encapsulated rounds.
It has certainly seen feast and famine along the way. But it has only been relatively recently that gun control has taken center stage in U.S. politics in a significant way.
After President Reagan was nearly killed by a mentally unstable man, both parties started to look at national gun control legislation. But that has picked up in earnest under President Obama.
Interesting factoid: SWHC is up more than 800% since Obama took office. Why? Because gun buyers are worried that new legislation will restrict their ability to own one or multiple guns.
The current presidential race — as well as a pending Supreme Court nomination — will only increase gun owners anxieties and boost sales.
What’s more, SWHC sold off in recent months and is now a bargain.
Sturdy Stocks to Buy: Visa Inc (V)
5-Year Growth Rate: 16.5%
Visa (V) is a play on the cashless society. It is basically the middle man between merchants and consumers. The Visa stamp on your debit card means that Visa is providing the bridge for both sides of the transaction.
While this isn’t very ground-breaking in the U.S., it’s the rest of the world where V will see its growth. Even in economic turmoil, emerging-market consumers see the value in having a form of secure cash, perhaps even more so during tough times.
V is growing its base in Latin America, Europe, Africa and Asia. Both earnings and revenues were up for the first quarter, but the problem is growing consumer spending right along with the brand. This spend problem led V to readjust forward guidance for 2016 earnings down to between 7% and 8% on a constant currency basis.
The best thing about that is, V is now a bargain. Even Goldman Sachs’ analyst is still bullish on Visa over the long term. Get in while V is on sale.
Sturdy Stocks to Buy: Nike Inc (NKE)
5-Year Growth Rate: 14%
Named after the goddess of victory, Nike (NKE) was certainly named appropriately. It has been one of the most reliable winners in the stock market for decades.
And the amazing thing is, it has remained nimble and can pivot to take advantage of a market opportunity unlike many companies its size. And for all the talk about how much sexier and dynamic Under Armour, Inc. (UA) is, Nike has 10 times the market capitalization.
When you’re looking for a bedrock stock, it’s NKE that fits the bill, not UA. While UA has been growing rapidly, it has a current price-earnings of 60. It’s going to be tough to keep that alive as global growth slows. NKE on the other hand, has a P/E less than half of UA’s. A much better choice for a less predictable future.
NKE recently rearranged its top-level management, which has shaken up some investors, but NKE has proven time and again it knows what it’s doing.
Get it while nobody’s looking.
Louis Navellier is a renowned growth investor. He is the editor of five investing newsletters: Blue Chip Growth, Emerging Growth, Ultimate Growth, Family 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.