The 10 Best Stocks to Hold Forever
Stocks to Hold Forever
Paul Tracy of Street Authority teases you in several of his advertisements, but he does give you clues as to what they are. So we decided to dig around and see what “Forever Stocks” we could come up with. “Warren Buffet, Bill Gates and George Soros have owned these stocks for years.” Those 3 names are synonymous with Buy and Hold, so it’s probably worth looking up.
The pitch here is to HOLD these stocks forever. BUY and HOLD FOREVER. Under each stock that is identified, we will put an all data graph to see how they performed over the years. The “D” shows where a dividend was paid and the “S” shows any stock splits (if any). Click on the thumbnail to view larger image.
We are teased with a fairly obvious one. Owning a dominant 65% of it’s market and billions of people rely on it every day? Ranks 19 on the Forbes most profitable list? That has to be Google (NASDAQ: GOOG). Google has plenty of cash and only seems to be growing. Google went public back in 2004 at about $85 a share. GOOG peaked over $700 a share at the end of 07. Over the next year Google shares dropped well over 50%, presenting what in hindsight would have been a no brainer buying opportunity as Google is now trading well over $500 a share. Get your GOOG Trend Analysis here.
His first stock is The “Rockefeller” Stock I Want to Buy and Hold Forever which we have already written about in the above. The company is Brookfield Infrastructure (NYSE:BIP). Read about it through the above . Check out the Trend Analysis for BIP.
Forever stock # 3 to hold forever, we at first thought could have been British American Tobacco Inc. (AMEX: BTI), but further research reveals it to be tobacco giant Phillip Morris (NYSE: PM). But hold forever? Cigarettes are no doubt addictive, but the US population is pushing smoking bans right up against the constitutional rights wall. Soon, in the US, you may only be able to smoke in small red room in your basement. But what about the rest of the world? Forever is a long time and as smoking education gets around, who knows we could see a global decline on smoking. But I wouldn’t start holding my breathe yet. In its first quarter of operations as a separately owned and traded entity from Altria, PMI had sales revenue of $15.6 billion and net earnings of $1.86 billion as compared with $13.2 and $1.45 billion respectively for the first quarter in 2007. And the amount of revenue generated from taxing tobacco could keep govt. regulators dragging their feet for many years to come. Phillip Morris is currently buying back its stock and has yield of 4-5 % generally and a dividend payout ratio of roughly 65%. for BTI Trend Analysis.
After some hardcore keyword searching, the closest thing we can come to with the teasers given on forever stock #4 is Reaves Utility Income Fund (AMEX:UTG). According to the UTG shareholder letter in April 2011, UTG announced an 8.7% increase in the Fund’s monthly dividend, to a rate of $0.125 per common share per month. This was the fifth dividend increase since the Fund’s inception in February 2004. Based upon the new dividend rate and the April 30 market price of the Fund’s common stock, the annualized dividend yield was 6.32%. The shares are thinly traded as mentioned, roughly about 66,000 a day on a 30 day avg. for latest UTG Trend Analysis.
Forever stock #5 is a special “toll” company with more than 887 million users around the world… and more than $540 billion in transactions. Although the company was founded in 1966, investors couldn’t buy a stake until five years ago. This one we previously wrote about here: Buffet Just Bought Another 189,000 Shares of This “Forever” Stock. The company is Mastercard (NYSE:MA). Use the above to read more. for up to date MA Trend Analysis.
Forever Stock #6 isn’t just on our radar. Forbes.com called it one of “3 Good Buys in Master-Limited Partnerships (MLPs).” Straight out of Forbes.com’s mouth, its “the JP Morgan Alerian MLP ETN (NYSE:AMJ) ,the most liquid of the MLP ETFs with average daily volume of over 900,000 units. It is currently yielding 4.58% and seeks to replicate the performance, net of expenses, of the Alerian MLP Index. It has an expense ratio of 0.85%. Forbes defends MLPs against a tough push for tax proposals that could widely affect the benefits of MLPs and goes on to suggest that some MLPs may have reached bargain- basement levels. Read our related article on Energy MLPs: Little known tax “loophole” could triple your investing income. for up to date AMJ Trend Analysis.
Forever Stock #7 was a rough one to figure out due to the vague hints we were teased. Instead of pouring through a ton of tickers, we decided to pull lists of Top 10 Emerging Market ETFs from multiple analysts to see any common factors. A couple popped up but judging from the keywords used we think its WisdomTree Emerging Markets Equity Income Fund (NYSE: DEM). Here is a list of Emerging Market ETFs.Latest Trend Analysis for DEM.
Forever Stock #8 is Intel (NASDAQ: INTC) Soros Fund actually increased its holdings according to a 13F filing on August 15th. ” Former Presidential Candidate John Kerry and his wife own at least $452,000 worth. 50 members of Congress own a stake.” Intel actually went public back in 1971. Back then the US Yearly inflation rate was 4.3% and The Dow closed the year at 890. Postage stamps (remember those?) were 8 cents. AND the NASDAQ made its debut. How fitting. No doubt this Tech Giant will be around for many years to come, it’s chipsets can be found in the majority of computing devices. for latest Trend Analysis on INTC.
Forever Stock #9, there have been several companies deemed “mini-Berkshire Hathaways” or “Baby Berkshire”, two that stand out to us are Markel (NYSE: MKL) and Alleghany Corp. (NYSE: Y). But references to Morningstar and John Kerry’s wife point us toward Markel. Both company’s primary business is insurance. Latest Trend Analysis for MKL here.
Forever Stock #10, the Brazilian economy is the 7th largest economy in the world. The standout Brazilian energy company that trades on the NYSE and distributes to more than 6.5 million customers is CPFL Energia (NYSE: CPL). Brazil is the focus of many emerging market investors, it is self sufficient in oil and ethanol production, a leader in alternative energy, is the second largest producer of iron ore and an expanding middle class. At the beginning of the year, Brazil’s central bank estimated GDP growth for 2011 to be 4.5%. In Sept. Brazil’s basic interest rate was dropped from 12.5% to 12%. Latest Trend Analysis for CPL here.DJI
Looking at the Dow Jones Industrials chart (DJI), you can see where we moved into the internet age in the mid to late 90s, the wild swings of volatility. The internet gave rise to the individual investor, allowing them to take control over their investing destinies, for better or for worse. We could surmise that with all the readily available information, and the speed of which it can be accessed leads to over reaction and a very moody market.
Buy and Hold forever? They say everything is cyclical, we have recovered from several seemingly important market downturns and the rich keep seeming to get richer. On every downturn opportunity arises. Many a new millionaire has been made by the misfortune of the markets. It would probably be safe to say that timing is a critical factor. Look at the housing market for example. If you bought years ago and sold before the crash, you probably made out like a bandit. On the other hand….many people are now renters. Remember the saying, “luck is when preparations meets opportunity.”
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