Best Stocks to Buy Now: A Weekly Review - 11/27/13
By Diane Alter, Contributing Writer, Money Morning•
Our best stocks to buy list last week stemmed from oil and drug stocks - and some gems from tech, which we learned is not in a bubble...
It was a good week for investing as markets continued hitting record highs. The broad-based S&P 500 Index topped 1,800 for the first time Friday, just one day after the Dow sailed past 16,000, and the Nasdaq ended the week just shy of 4,000 (which it hit Monday this week).
As indexes climb, investors grow increasingly cautious. Predicted outcomes run the gamut from a modest market pullback, to a steep correction, to a bursting bubble.
But investors would suffer most if they didn't invest at all in the current market.
Money Morning has you covered - every week we feature the best stocks to buy now and the best investment moves to make, for maximum profit and investment protection. Here's a recap from last week:
"Tech bubble" dominated headlines last week, and Money Morning Defense & Tech Specialist Michael A. Robinson made a guest appearance on FOX Business to talk about soaring tech stocks. With investors mulling whether it's time to jump in or jump ship on tech, Robinson offered both an explanation and a solution. Here's Robinson's huge reason why investors should be playing the tech sector today, in addition to his top tech picks.
Money Morning's Robinson likes to remind investors that the road to wealth is not paved with good intentions - it's paved with tech. And a special situation, called a "corporate spin-off," allows investors to build up their net worth with a "twofer" play: Investors buy stock in the parent company and then receive shares of the spin-off unit - for free - as a dividend. A number of studies show that stocks spun off from their parent company handily beat general market averages - up to 40% in the first two years. To find out which big-name company has a spin-off in the works, and how to lock in profit now, check out Bank 200% Gains from My Recent Dinner Conversation.
Costco Wholesale Corp. (Nasdaq: COST) has a winning combination that appeals to consumers and investors alike. Consumers like Costco because they know they're getting the most bang for their buck. Investors like Costco because it offers a retail model that allows it to stand out from its peers, while also effectively boosting profits. With 454 U.S. stores and another 180 dotted around the globe, Costco continues to grow locations and profits. Read why Costco will keep beating the competition, and why you should invest in the retail giant.
Although water is readily available in the United States, some 783 million people worldwide don't have access to it. Moreover, an astonishing 2.5 billion people globally lack basic sanitation. And water isn't just needed for drinking and bathing - it's also critical to industrial production... and hydraulic fracturing ("fracking")... and agriculture. The global water industry is currently a $500 billion a year business and is on track to hit $20 trillion (yes, trillion) by 2025. Investing in water stocks offers plenty of opportunity, and Money Morning has found a proven winner - it's up 50% this year and has more upside to come. Discover one of the best water stocks to buy now here.
Orphan drugs - pharmaceutical treatments for rare diseases and disorders - have proven to be lucrative moneymakers. And Wall Street has taken notice. As many drug makers and investors have come to realize, a small patient group can lead to big profits. Orphan drugs are an invaluable benefit to those suffering from life-threatening conditions that previously had no treatments. They're also some of the highest-priced medicines out there. Money Morning shows readers How to Invest in the Most Expensive Drugs on the Market.
Michael A. Robinson's specialty may be defense and tech, but he always keeps a sharp eye out for new investing opportunities in related areas. His astute eyes found a mid-cap company that's a leader in what he calls "personal defense technology." The company produces hundreds of thousands of firearms annually for sport, self-defense, law enforcement, and government agencies. Demand for its products is so robust that it has difficulty keeping supply up. It's a leader in the industry, its stock is up 45% this year, and its profits could double over the next two years. Check out This "Defense" Stock Is Seriously Outgunning the Market to hit the bull's eye on big gains.
Money Morning Global Energy Strategist Dr. Kent Moors wrote last week from Brazil, which is already a major oil producer and is expected to surpass other countries on the global production list soon thanks to some exciting new opportunities. Some obstacles must be overcome, but "[w]ith major gas finds in Argentina and Columbia, a slow return of Venezuelan heavy crude, and prospects for some of the longest pipeline networks in the world, Brazil sits right in the center as a major new cross-border energy player," Moors writes. Take a closer look at the factors creating a South American OPEC of sorts, and read about what Moors describes as one of the best-run oil companies in the world.
Finally, now that we've shared all the best stocks to buy from last week, here's an easy and effective tool you can use to mitigate risk and boost your profits - trailing stops. We're big proponents of using trailing stops here at Money Morning, and yet many investors don't use them or have never heard the importance of trailing stops explained. This routine "portfolio maintenance" can help protect you from excessive loss and also preserve your profits. So don't leave money on the table - put trailing stops to work for you today!