Best Stocks to Buy Now: A Money Morning Weekly Recap
By Diane Alter, Contributing Writer, Money Morning•
The stock markets have been going up so far and for so long that many analysts predict a correction is in store. The S&P 500 hit a record high today (Wednesday) to trade above its record high hit last week, and the Dow Jones Industrial Average hit record highs Monday and Friday.
While the Twitter IPO dominated headlines last week, we aren't fans of the stock. There are much better places to put your money to profit from these record market highs, as we've detailed below.
And with this bull market growing increasingly long in the tooth, it's just as important to know which stocks to avoid as which ones to buy.
Here's a recap of last week's best stocks to buy now (and a big one to avoid), plus investment strategies to keep your portfolio thriving:
Here at Money Morning we've written repeatedly about the liquefied natural gas (LNG) revolution. Whereas not long ago U.S. prospects for energy independence looked bleak, the United States is now poised to become a major LNG exporter, as hydraulic fracturing ("fracking") provides access to vast new deposits of oil and natural gas. Two of the best investments in the LNG revolution were profiled last week by our Private Briefing service Editor William Patalon III. They're both core holdings to an energy portfolio. Find out how these hot stocks can boost your returns in Patalon's column, "The Best Opportunity of the Decade."
Wall Street's elite "Thousand Dollar Club" got a new member this year when Google Inc. (Nasdaq: GOOG) joined - leaving analysts to speculate about who could be next. Money Morning Defense & Tech Specialist Michael A. Robinson found "five companies that are in the right types of businesses, that possess the remarkable strategic models, and that have the potential to execute - putting them on a course that should one day lead to membership in the exclusive Thousand Dollar Club." From where these stocks are trading now, that means gains of 100%, 300%, even 400%. To get Robinson's five picks for potential club members, go here.
The global pharmaceutical market weighs in at a healthy $959 billion, and it's expected to grow around 4.5% annually from 2012-2016, according to industry research firm IMS Health. But in emerging markets, pharma is anticipated to grow at nearly three times that rate, as an emerging middle class pursues a higher standard of living. Among the biggest pharma beneficiaries in the coming years will be generic drug makers. To help readers benefit from this vigorous industry shift, Money Morning featured 4 Drug Stocks to Buy Now to Capitalize on Emerging Market Growth.
Money Morning's Keith Fitz-Gerald is a big proponent of "glocals," his name for globally recognized brands backed by highly localized product offerings. They offer investors a winning combination of robust balance sheets, experienced management, and exposure to fast-growing consumer segments. We highlighted one well-diversified company with a solid local and global presence that's enjoying robust growth from emerging markets. Moreover, its products fall in the "need" and not "want" category. Add to this a dividend yield of 3.3%, an ongoing $1.5 billion stock repurchase plan, and a continued growth strategy, and it's clearly one of the best stocks to buy now.
Investors have long heard about the merits of value investing. However, one drawback of value investing is that it can often take years for value plays to pay off. "To really leverage the power of value investing, we're much better off aligning ourselves with a sector rotation," writes Money Morning Director of Research Sid Riggs. He's identified what could be the next industry rotation spark - gold mining stocks. Currently considered a "hated" asset class, Riggs explains why the conditions are ripe for the winds to shift - and why investors should get in ahead of the tailwind to reap big gains. Here's how to get in before you miss the gains.
Precious metals such as gold, silver, platinum, and palladium have an important place in a well-diversified portfolio. Not-so-precious metals, like aluminum, are good investments, too. Money Morning Resource Specialist Peter Krauth has also found opportunity in the other unforgotten metal - iron ore. It's the most used metal in the world, and "shares of its best producer could double." Although iron ore prices have struggled since peaking in 2011, several factors point to a coming rally. Find out why Peter's bullish on iron ore now and get his favorite investment in the sector while it's still a bargain.
For decades, most investors focused on capital gains, not dividends. But after five-plus years of a near-zero interest rate policy, yield-starved investors have turned to dividend-paying stocks. Companies are complying by boosting payouts - and a significant number of companies sweetened the dividend pot last month. Here's our list of more than ninety such companies - check to see if your fave is on the list.
Finally, our stock to avoid: Twitter Inc. (NYSE: TWTR) debuted last Thursday with shares opening at $45 per share, 73% above its initial public offering price of $26. Shares surged to more than $50 before ending the day at $44.94. Money Morning Chief Investment Strategist Keith Fitz-Gerald, who has warned against jumping on the TWTR bandwagon for weeks, explained the absurdity behind the whopping initial gains. And he was spot on. After its initial, irrational pop, Twitter shares gave back 7.2% on Friday, and scores of analysts are steering clear of shares. As Fitz-Gerald is fond of saying - and you should be, too - #countmeout.