Many people don't have the time or inclination to do deep research on stocks.
It's often easier to buy an exchange-traded fund that owns a basket of the top blue chips, like Apple, Microsoft and Amazon. Other investors like to bet on themes and memes instead of poring over a company's financial statements and regulatory filings. Hence the recent craze for momentum stocks like GameStop and AMC.
But for old-fashioned investors with a little gray in their hair (and veteran business journalists like yours truly) there are other ways to find winning stocks for the long haul.
I've been running stock screens using market data software, first from FactSet and now from Refinitiv, on and off during the more than 20 years I've worked at CNN Business. (It was CNNMoney when I first started.)
I've typically done this stock picking feature in early to mid February as a Stocks We Love type of story, pegging it to Valentine's Day. (Here's the first one I did in 2002!) So they've often been littered with cheesy references to how romantic it is to find a reliable company you can count on for a long-term relationship.
Well, investing trends have changed a bit in the past two decades. Some would argue that active investing (actually choosing individual companies) is no longer in vogue thanks to the rise of passively run index funds.
And to be fair, the experts are right, mostly. Investors usually are better off owning an index ETF. If the goal is saving for retirement in particular, a diversified mix of companies is safer than trying the riskier strategy of identifying individual winners and losers.
Top stocks for the patient investor: But you know what they say about not being able to teach an old dog new tricks? I still believe there's value in looking for quality stocks at bargain prices. Legendary investors like Warren Buffett and Peter Lynch of Fidelity fame would likely agree.
With that in mind, I ran one final stock screen for this Valentine's Day. Like my past screens, I tried to find companies with strong fundamentals (solid sales and earnings growth), low levels of debt and high returns on equity. And perhaps most importantly, I screened for companies trading at a reasonable price based on their estimated earnings.
This screen wound up identifying 33 companies that could make sense as a buy-and-hold investment. All of them generated double-digit sales growth annually over the past five years and they are all expected to report profit growth of at least 10% a year for the next few years.
Some of the more prominent companies on the list? IT services/consulting giant Accenture made the cut. So did software leader Adobe, semiconductor manufacturer Analog Devices, chip equipment juggernaut Applied Materials and Venmo owner PayPal.
That's a fair amount of exposure to the tech sector. But several other non-techs made my list too.
Auto insurer Progressive (hi Flo!), health insurer Humana, cosmetics retailer Ulta Beauty, UGG boots and Hoka sneakers maker Deckers Outdoor and trucker JB Hunt met my criteria.
As did financial services firm Raymond James, perhaps most famous for having its name on the Tampa Bay Buccaneers stadium Tom Brady briefly called home.
None of these stocks are likely to be moonshots that will surge because of comments that someone makes on Reddit. But they might offer a little more in the way of security and dependability. And after all, isn't that what we all want from a long-term partner on Valentine's Day?
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