When large caps make a run for it, Fools pay attention.
Think of Microsoft. After years of poor performance, Mr. Softy and his $300-billion-plus market cap began making a move over the summer, enriching investors who bought and stayed in.
Hence, this column. For as much money as there is to be made in fast movers like Onyx Pharmaceuticals
Company |
Closing Price |
CAPS Rating
|
% Change |
52-Week Range |
---|---|---|---|---|
Aflac |
$60.66 |
**** |
6.12% |
$43.34-$63.25 |
Tyco Electronics |
$35.02 |
*** |
5.80% |
$31.31-$41.28 |
Kroger |
$28.65 |
**** |
3.47% |
$21.12-$31.94 |
Avon
Products |
$41.66 |
**** |
3.12% |
$31.95-$42.51 |
Nucor |
$52.46 |
**** |
2.90% |
$41.62-$69.93 |
Shares of our top gainer, insurer Aflac, were up thanks to a major Japanese contract. No doubt, that's good news. But we Fools prefer buy-to-hold stock stories. Are any of our large-cap leaders worth owning over the next three to five years?
Most of them, yes -- if you believe the 74,000-plus professional and amateur stock pickers in our Motley Fool CAPS community. But a top star rating isn't always a bullish indicator. If it were, Apple, which has spent much of its life in CAPS as a two-star stock, would have long ago had a five-star rating.
Will that be paper or plastic?
So let's eschew the five-star stocks here. They're too obvious. Not so with supermarket Kroger, which gets a thumbs-up from investor goalie37 for superior fiscal management. Quoting:
As a long time customer of [Kroger] subsidiary Ralphs, I have seen how well run this company is. Recently [it has] added shelf space to more high-end to compete with Whole Foods
He's right. The balance has improved a great deal and, with it, returns on capital:
Metrics |
Trailing 12 Months |
2006 |
2005 |
2004 |
---|---|---|---|---|
Cash and investments (mil.) |
$164 |
$189 |
$210 |
$144 |
Total debt (mil.) |
$6,655 |
$7,042 |
$7,205 |
$7,901 |
Return on capital |
13.1% |
12.2% |
11.3% |
9.3% |
Impressive, but I can't say that I'm surprised. My own Colorado Kroger subsidiary, King Sooper's, has been on the march for years -- to the point that it virtually dominates the local market. Knowing that, and now knowing the numbers, gives me more than enough to add Kroger to my CAPS watch list.
What about you? What would you do? Let us know by signing up for CAPS today. It's 100% free to participate.
See you back here tomorrow for more of the best of the biggest.
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