Sex sells. Or more accurately for investing, sexy sells.
When you have been around the stock market a while, you realize that most of the stocks that get talked about on financial channels or in the financial press tend to be in the sexy sectors at the moment.
Tech stocks seems to jump to the front of the line, especially if they have “cloud,” “bio” or some other compelling adjective in front of the tech suffix.
But successful long-term investors know a secret. What’s really sexy about a company isn’t the sector it’s in, it’s the company’s earnings and sales growth.
Actually, the less “in the news” it is, the better. That way the stock doesn’t get tossed around by fad-driven investors and it rises and falls on its own merits rather than the news cycle.
That’s why I’d like to introduce to you 10 boring stocks with thrilling growth. You may not seem them on CNBC or in Forbes, but you can bet that they’ll do very well for your portfolio.
Boring Stocks to Buy: Sorl Auto Parts (SORL)
Sorl Auto Parts, Inc. (NASDAQ:SORL) makes brakes. It has made brakes for cars, trucks, busses and trains as an original equipment manufacturer for more than 75 brands around the world.
But fundamentally, SORL is a Chinese firm with a very good relationship with Chinese manufacturers. It’s the leading air brake maker in China. And about 75% of its brake business is either OEM or aftermarket products in the Chinese market.
Given the resurgence of the Chinese economy and its continued development, SORL has a very clear path to growth. It also is the leader in train and mass transportation brake systems, like the new bullet trains China is building.
It’s a small company with a big future.
Boring Stocks to Buy: Five Below (FIVE)
Five Below Inc (NASDAQ:FIVE) is a specialty retailer focused on the teen and pre-teen customer.
And its name says it all. Everything in the store is $5 or under. And that adds up to a lot of pretty cool stuff — from phone cases and ear buds to beach towels and soccer balls.
Given the growth and popularity of dollar stores as cheap, convenient alternatives to more expensive department stores, FIVE has a similar strategy but geared toward smaller towns and suburban areas around big cities.
And the strategy is working. FIVE stock is up nearly 70% in the past 12 months. As the economy recovers, that kind of earnings growth will continue.
Boring Stocks to Buy: Algonquin Power (AQN)
Algonquin Power & Utilities Corp. (NYSE:AQN) is a very interesting utility. It operates both in Canada, where it’s headquartered, as well as in 12 states in the U.S.
In Canada, it focuses on generating and distributing renewable energy — wind, solar, hydroelectric and geothermal — in its Algonquin Power Company division.
In the U.S., through the Liberty Utilities division it provides water and wastewater treatment, electricity and natural gas distribution for nearly 800,000 customers.
This business strategy is somewhat unusual for a buttoned-down utility and it’s slightly more pragmatic than many of the “green” power companies out there. That makes it confusing to analysts, which makes it attractive to serious investors.
What’s more, it delivers a solid 4.2% dividend, even after a 20%-plus run in the past 12 months.
Boring Stocks to Buy: Green Dot (GDOT)
Green Dot Corporation (NYSE:GDOT) is in the financial tech sector, which may seem like an easy disqualifier for the stocks in this article. But, its fintech creds are focused on consumers with limited access to the credit markets.
It’s this focus that keeps it out of the “cool” fintech crowd. GDOT is a leading provider of reloadable prepaid debit cards and the equipment that makes them work.
This sector is especially popular with immigrants who haven’t established traditional financial relationships with banks and lower income people that have little access to credit cards or other credit vehicles.
Even in a recovery market, GDOT is growing its business briskly — GDOT stock was up 137% in the past 12 months. This trend will be in place for some time.
Boring Stocks to Buy: Wageworks (WAGE)
Wageworks Inc (NYSE:WAGE) is in the consumer-directed benefits (CBD) sector. That means it administers plans like Health Spending Accounts (HSAs) and Flexible Spending Accounts (FSAs) to help individuals save pre-tax money to pay for their healthcare, dependent care and commuter expenses.
This is an extremely important sector as companies and even state and federal governments are trying to cut their funding for these benefits. But the past year has left healthcare legislation in limbo, so it hasn’t been clear sailing for firms like WAGE.
Yet while Wall Street hates uncertainty, that is a great opportunity for investors who want to buy into a growth sector on the cheap.
WAGE Q3 numbers (reported in November) were impressive, with revenue up 30% year over year, healthcare revenue up 37% and COBRA revenue up 48%.
Boring Stocks to Buy: Wireless Telecom Group (WTT)
Wireless Telecom Group Inc (NYSEAMERICAN:WTT) is in wireless telecom, which may seem like a disqualifier for this group of ‘unsexy’ stocks.
However, WTT isn’t a household name for a reason. It’s on the equipment testing side of this sector. It also started as a primary contractor to the defense sector developing noise source devices, which test communications systems to see if they’re receiving and understanding the information being transmitted.
The defense sector needs secure, reliable communications that are also durable and consistent. WTT passed those challenging criteria and how sells its expertise to the commercial market as well.
Given the growth of the mobile industry, this small firm (it currently sports a $50 million market cap) has big potential — it’s up 46% in the past six months.
Boring Stocks to Buy: Compass International (CMP)
Compass Mineral International, Inc. (NYSE:CMP) is the leading salt producer in North America and the United Kingdon.
Did you know that salt can be used in more than 14,000 different ways? It should come as no surprise that CMP knows all of them. And the winter blast that hit most of North America meant CMP was likely involved in keeping your roads, sidewalks and driveways ice free.
CMP also has a plants nutrients division to supplement fertilizers. And CMP is the only magnesium chloride producer in the US. Also, because of its salt mines, it has a storage division for companies looking for long-term stable storage of documents and materials.
Up 12% in the past three months and delivering a very respectable 3.8% dividend, CMP is a consistent grower with bright future as the global economy recovers.
Boring Stocks to Buy: Fortis (FTS)
Fortis Inc. (NYSE:FTS) is a Canada-based electric and gas utility with 10 operations across Canada, the U.S. and the Caribbean. It’s one of the top 15 utilities in North America.
Recently, FTS bought the largest independent transmission firm in the U.S. to add to its integrated strategy of generation and distribution. Where many U.S. firms are happy to stick to their regional monopolies, this firm sees opportunities within its hemisphere.
And given the demand for natural gas in an expanding U.S. economy, there are plenty of opportunities for FTS moving forward. What’s more, it has raised its dividend 44 years in a row. Its current dividend sits at 3.9%.
Boring Stocks to Buy: Innospec (IOSP)
Innospec Inc, (NASDAQ:IOSP) has an interesting niche. It’s in the chemical mixing business.
Its primary customers are oilfields, refineries, power stations and fuels, but it also has a division focused on personal care items as well.
But the real money is in its oilfield services niche.
And this is where the growth is as well. Washington is very open to allowing drillers to drill, whether it’s offshore or in shale deposits, and that means the U.S. will be increasingly energy independent.
That means, there will be a growing amount of oil and natural gas exports. IOSP will be there in the oilfields as well as the fuels and refineries. Essentially IOSP stock is way to play the upstream, midstream and downstream parts of the energy patch without buying an integrated oil company. And its growth is leveraged.
Boring Stocks to Buy: Primo Water (PRMW)
Primo Water Corporation (NASDAQ:PRMW) sells water.
To be specific, it sells multi-gallon water containers and dispensers for home and office use in the U.S. and Canada.
And at this point its products are available at 46,000 retail locations, including major grocery stores and big box retailers. You can either drop off your empty and pick up a new, filled container or refill your empty bottle at self-serve kiosks inside the stores.
Regardless, for families and offices, the good old water cooler is a much more efficient and environmentally friendly way to get your water. Plus, PRMW’s filtration system is much more rigorous than most bottled waters or home filtrations systems.
PRMW stock is up nearly 20% in the past three months and its growth track is likely to continue as consumers look for better and more convenient alternatives to cheap single serving water bottles.
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.
