Penny stocks are one way to double your money, though it's fraught with risk, but there are equally shiny opportunities trading at the other end of the price spectrum, too. I call 'em "three-digit stocks," yet if they're anything like Berkshire Hathaway they can trade in the four-, five-, and six-digit range, too.
A penny stock might not be a good buy simply because it's cheap, and a three-digit stock shouldn't scare you away just because it carries a hefty price tag. Handsome is as handsome does. Let's check in with the Motley Fool CAPS community to see which of the high-priced stocks below earn the greatest confidence from our investor intelligence database:
Return on Capital (TTM)
|Alexander's (NYSE: ALX )||*||$393.70||5.0%|
|C.R. Bard (NYSE: BCR )||*****||$110.18||18.9%|
|Public Storage (NYSE: PSA )||*||$111.85||5.0%|
Source: Capital IQ, a division of Standard & Poor's; Motley Fool CAPS.
TTM = trailing 12 months.
But just because these stocks are purring is no reason to jump into them blindly. Catching a tiger by the tail -- or a knife falling from on high -- can end up leaving you scratched and bleeding. That's why we recommend you use this list as a launchpad for your own research and analysis.
The hole that commercial real estate had found itself in is slowly getting filled in. An unlikely proof of that might be real estate investment trust Alexander's. Last month, it reported quarterly earnings 20% higher than they were a year ago, and funds from operations -- a key metric of REIT profitability -- were up 17% from last year. It was able to lease more space at previously vacant properties and continues to benefit from an additional property that was put into service last year.
As nice as the improving landscape looks, there are risks with Alexander's that probably account for the low rating the CAPS community has assigned it. Business news provider Bloomberg remains a significant tenant for the REIT and accounted for a third of its revenues in the quarter. It's also beholden to Vornado Realty Trust, which manages both the company and its properties, for which it collects a $3 million annual fee plus a percentage of the rents.
Public Storage has set itself up as a REIT as well, but it operates self-storage facilities. The CAPS community isn't rallying around the niche, even though occupancy rates are rising and profitability is improving. Public Storage saw occupancy per square foot rise 1.7% from a year ago to around 90%, while rival Extra Storage Space said occupancy rose to 85% from 82% the year before.
overall I am bearish on the market at this point and I really wanted to down thumb this one, but a few things changed my mind. I dont think its going to be a big winner, but it has a beta of less than 1 with a 3% dividend yield and no debt.. It has taken a recent drop and is more affordable, though not cheap even here.
But there's still a lot of investor skepticism surrounding Alexander's; more than two-thirds of the CAPS members rating it think it won't be able to outperform the market. Let us know on the Alexander's CAPS page whether this stock is likely to be mauled.
Many medical device companies add one-time use and disposable items to their main product lines to provide alternative, recurring streams of revenues. Intuitive Surgical (Nasdaq: ISRG ) sells surgical robotics for which it receives revenues from the devices and consumables used in the operations.
C.R. Bard goes one better, though, since most of its devices are intended for a single use. They're either discarded after use or are designed for temporary or permanent insertion into the body. Catheters, stents, and specialty surgical patches and implants are just some of the devices doctors and hospitals have to keep coming back for.
Where Angiodynamics is down almost 9% this year and Boston Scientific (NYSE: BSX ) is down 8%, Bard is up 20%. More than 100 CAPS All-Stars have weighed in on C.R. Bard, and only one doesn't think it can beat the market averages.
Count to 10
These three-digit stocks might be on their way to even higher valuations. That's why it pays to start your own research in Motley Fool CAPS. Read a company's financial reports, scrutinize key data and charts, and examine the comments your fellow investors have made, all from a stock's CAPS page.