8 Stocks That Let You Sleep at Night
Thu, 23/12/2010 - 10:47 by Alyce Lomax
Some stocks have such powerful management teams, brands, and histories of innovation that you can buy 'em without worrying you're going to lose too much sleep at night. Although no stock's without risk, these eight companies possess such strong positive attributes it seems silly to agonize too much over short-term concerns.
- Amazon.com (Nasdaq: AMZN): With Jeff Bezos at the helm, this company has a long history of being one step ahead of the crowd. Remember when hardly anybody believed selling books over the Internet could be big business? Look how far Amazon has come since then. Although Amazon.com may look like a pricey stock right now (it's trading at a rather shocking 53 times forward earnings), its forward-looking worldview implies plenty of future growth; innovation is in its DNA. Hating on Amazon may be a big mistake, but my Foolish colleague Rich Smith points out one future concern for the company here.
- Costco (Nasdaq: COST): The warehouse experience goes way beyond fluorescent lights and concrete floors; at Costco, it's good business. Costco customers fall in love with the company's bulk deals, and the company does great things for its employees. Jim Sinegal is building this company for the long term, and this is most certainly not a company to think about on a quarter-by-quarter basis.
- McDonald's (NYSE: MCD): There was a time when nobody liked McDonald's, but the company has turned itself around and then some, proving the naysayers wrong as it has outperformed year after year. It's the true leader in the fast-food space, and it throws in a satisfying side: a dividend yield of 3.2%. This stock may be unstoppable. Investors are lovin' it, and it looks like they can keep lovin' it for years to come.
- PepsiCo (NYSE: PEP): It's not just the PepsiCo products, but it's also the name behind Frito-Lay and Quaker Oats. Innovative ideas on sustainability and workforce diversitymake Pepsi a blue-chip name with a surprisingly forward-looking mission.
- Coach (NYSE: COH): Fashion fads and trends may come and go, making life difficult for many consumer-facing stocks and their investors, but Coach boasts a venerated brand that folks love to have on their arm through thick and thin. Meanwhile, Coach has a clean balance sheet and a smart management team that has allowed investors to bag big returns instead of getting stuck holding the bag.
- Church & Dwight: First, there's that old-school yet miraculously versatile product, baking soda (Arm & Hammer). And then there are condoms (Trojan). These are products consumers go for regardless of fretting about "The New Normal" environment. This is a "keep it simple" stock.
- Berkshire Hathaway (NYSE: BRK-B): There's something about a couple of pretty smart dudes named Warren Buffett and Charlie Munger. ... It's probably worth it to own this stock just to go to the company's annual meeting every year and glean some investing wisdom.
- Apple (Nasdaq: AAPL): This company may not be beyond reproach (Antennagate was a little troubling, even if it didn't dent enthusiasm for the iPhone), but Apple has a die-hard and devoted fan following and a long history of transforming product design into consumer obsession. It also has $25.62 billion in cash and no debt. Oh, and it trades at a not unreasonable 21 times trailing earnings.
Do you have some stock ideas that investors can own without much worry? Share your ideas in the comment box below, or disagree with my eight picks.
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