Let’s call a spade a spade. Turnaround stocks are fun. They’re even more fun when you’re able to say you bought them at — or at least near — their low because you understood the underlying story better than most other investors did.
While we’re being completely honest with ourselves though, let’s also admit that “buying on the dip” can often leave us battered, bruised and burned.
But slow and steady wins the race. Stocks that never really waver from their upward march can look and feel relatively expensive, making them tough to step into from both a fundamental and a technical perspective. There’s a reason these names are able to do what they do though. And investors should be willing to pay for quality and consistency.
With that as the backdrop, here’s a rundown of 7 of the market’s top stocks to buy. These stocks are not likely to dish out triple-digit gains in a matter of days or even months. But they are comfortably seated in long-term uptrends.
Long-Term Uptrend Stocks to Buy: Lockheed Martin Corporation (LMT)
Yes, Lockheed Martin Corporation (NYSE:LMT) has been handling something of a public relations nightmare. Its F-35 fighter jet is still behind schedule, over budget and annoying too many of the wrong people.
Don’t let the high-profile headache fool you though. Most of Lockheed Martin’s defense and civilian work is not only much simpler and easier to deliver, it provides a much more consistent revenue stream. Ergo, the income stream is also quite tame, not to mention progressive.
Investors have figured this out too. Despite all the embarrassing problems the company’s faced, shareholders have been able to look past them and keep the stock moving higher quite nicely since 2014 in an uptrend framed by a handful of support and resistance lines.
It’s not logged a losing year since 2010, and for the past ten years, has averaged a 15% gain.
Long-Term Uptrend Stocks to Buy: Visa Inc (V)
In some ways, this company has the perfect business… a proverbial toll road that consumers use in good times and bad. People never really stop using their credit cards and debit cards, even if they might use them a little bit less in the midst of an economic slowdown.
Visa Inc (NYSE:V) shares themselves have reflected that same consistency, and in a big way. The average annual gain has been 28% for every year since 2009. V stock hasn’t had a losing year since 2010.
But the world of money is changing. What if you believe that technologies like blockchain are poised to supplant actual, government-issued currency?
Don’t sweat it.
Visa certainly isn’t. In fact, CFO Vasant Prabhu made a point of saying late last month he’s very excited about the advent of blockchain and the opportunities that will ensue.
Long-Term Uptrend Stocks to Buy: Pfizer Inc. (PFE)
Despite being one of the world’s best-known names in its sector, Pfizer Inc. (NYSE:PFE) shares aren’t always in a long-term uptrend. You’ll recall in the early 2000’s as it was falling off the proverbial patent cliff, Pfizer was downright painful to own.
Things have been different since 2009 though. While PFE has not been without sizeable swings, all the major highs have been higher than the prior peak, and all the major lows have been better than the previous lows. The stock’s resiliency has allowed it to hammer out an average annual gain of 13% for the prior eight years.
The underlying results are likely to keep pushing the stock forward too. Its current best-selling drug, pneumonia vaccine Prevnar 13, still has some patent life left. And its all-star neurological-pain drug Lyrica — which generated $1.1 billion in sales during the last quarter of 2017 — got a partial patent extension late last year when a controlled-release version was unveiled.
In the meantime, late-stage pipeline drugs like Bavencio (or avelumab) and Ibrance (palbociclib), both for the treatment of several forms of cancer, show tremendous potential.
Long-Term Uptrend Stocks to Buy: Danaher Corporation (DHR)
Danaher Corporation (NYSE:DHR) isn’t exactly a household name. But, maybe it should be — a lot of households could use an investment as consistent as DHR shares have been for the past several years. Within the confines of a narrow trading range that extend all the way back to 2010, DHR has averaged about a 12% gain each year for the past eight. Its worst year in this time 2011 when DHR broke even.
Danaher, by the way, is a collection of about twenty different businesses, ranging from dental technologies to environmental solutions to life sciences to diagnostics. Most companies would love to have Danaher’s diversity.
And though this diversity hasn’t meant bulletproof profit and sales growth, it’s certainly pushed the company relatively close to that feat.
Long-Term Uptrend Stocks to Buy: Microsoft Corporation (MSFT)
That’s not a misprint — Microsoft Corporation (NASDAQ:MSFT) is one of the top stocks to buy based on the strength, and consistency, of its long-term uptrend.
That hasn’t always been the case. Just a few years ago the software giant was a bit lost, trapped in an environment where non-Windows mobile devices were making desktops and laptops less relevant but before cloud-computing was the opportunity that it is today. CEO Satya Nadella, who took the helm in 2014, has not only navigated the paradigm shift perfectly, he’s changed the business model to one that includes lots of recurring revenue.
Those increasingly reliable results have allowed MSFT stock to shrug off the occasional profit-taking attack that threatened its prolonged (and well supported) uptrend. MSFT may be a little overheated now. But it’s unlikely that any pullback will last too long or cut too deep.
Long-Term Uptrend Stocks to Buy: Thermo Fisher Scientific Inc. (TMO)
Thermo Fisher Scientific Inc. (NYSE:TMO) is one of those names that’s all too easy to forget about. It’s understandable. Although most consumers don’t likely use or own a product Thermo Fisher made, most consumers probably have relied on the company’s products in the past. Thermo Fisher Scientific makes scientific and healthcare equipment like diagnostic supplies, drug development tools, gene-sequencing technologies and more. These products aren’t the kind of stuff that gets pushed around by cyclical forces.
That may be why TMO stock is usually moving higher. Though it can’t be said that the stock never logs a losing year, they’re few and far between. If investors can be patient, it will pay off. For the past ten years, Thermo Fisher has averaged a 14% gain per year, and only logged one losing year during that span.
It’s earned that gain, of course. For the past five years, Thermo Fisher Scientific boasts annualized sales growth of nearly 11%, and earnings growth of a little more than 12%. The next five years are expected to be more of the same.
Long-Term Uptrend Stocks to Buy: Costco Wholesale Corporation (COST)
Last but not least, add Costco Wholesale Corporation (NASDAQ:COST) to your list of stocks to buy for their long-term uptrend.
Costco won’t win any value awards. Priced at 29 times its trailing earnings and 25 times its forward-looking profits, the stock is more than pushing its luck — especially by retail standards. But investors just don’t care. They love the way the brick-and-mortar retail has managed to compete with both Amazon.com, Inc. (NASDAQ:AMZN) and Walmart Inc (NYSE:WMT) at the same time, setting the stage for shockingly consistent income and revenue growth — no “retail apocalypse” here.
Analysts have taken notice too. Wells Fargo analyst Edward Kelly just upgraded COST stock, explaining:
“We expect the company to sustain strong comp momentum despite difficult comparisons, deliver improved membership trends, navigate rising retail cost pressures, and beat consensus expectations.”
As of this writing, James Brumley did not hold a position in any of the aforementioned securities. You can follow him on Twitter, at @jbrumley.