One of our favorite things to do at Manifest Investing and throughout the community is to pay attention to successful investors we respect. This can stem from sources like well-managed funds (think Buffalo Small Cap, BUFSX) to published lists of ideas. We’ll take a look at Eddy Elfenbein’s Crossing Wall Street later. This list of stocks is provided by Standard & Poor’s Sam Stovall. We’ve spent some quality time with Sam at national investing conferences and know that his foundation is good.
That said, we subject ANY AND EVERY idea to the gauntlet of our stock analysis process whether they come from your hair stylist, brother-in-law (especially if they come from your brother-in-law) and we make no exception for Sam.
Here’s the article conveying Sam’s favorites:
We create a dashboard with $100 aimed at all nineteen entries … and sort the dashboard by PAR (Descending):
It’s a good shopping list — the overall average return forecast is 8.7% with the median return forecast for all 2400 stocks that we follow hovering at 8.3%. Typical of a bunch of blue chip stalwarts, the overall growth rate is 5.5%. The 3.3% projected dividend yield essentially compensates for a lack of growth — a normal feature of companies that have reached mature stages of their life cycle. The overall quality rating is 72.6 (Excellent) stemming from a financial strength rating of 81% (A) and earnings stability percentile ranking of 90.
EPS stability is very important. It’s where the dividends come from.
Darden Restaurants (DRI) is fairly attractive, and one that we’d have no trouble raking over the coals to see how appetizing it really is. Microsoft (MSFT) is also pretty compelling — but might walk over a few coals too as Windows 8 rolls along with the mish-mosh of other adventures they’re pursuing. All of those companies in the 9-12.5% return forecast range are pretty compelling for conservative investors or those who might be in capital preservation mode.
Good shopping! Thanks, Sam.
Investors are invited to track the portfolio progress going forward by monitoring the condition of $100 invested in each one of Sam’s suggestions here: