2 Attractive Stocks for Your Portfolio Today

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Earlier this week I had the good fortune to join Barry Armstrong on his radio show Financial Exchange on WRKO AM 680 in Boston. Every so often we get to talk stocks for a few minutes, and on Tuesday I gave him and his listeners two stock ideas that I think are solid buys today. You can catch our segment by clicking here. And you can read more about them below.

Amazon.com (NASDAQ: AMZN  )
This is a polarizing stock thanks to its lofty valuation and a leader who seems to really like spending money. I understand the concern some have that Jeff Bezos has too many things going on and is taking his eye off the proverbial ball. However, I choose to see it differently. In fact, I think that Amazon and Bezos really only have one iron in the fire, and that's the company's stated mission: "We seek to be Earth's most customer-centric company for four primary customer sets: consumers, sellers, enterprises, and content creators."

Investors are better served taking a bigger-picture approach with Amazon and what it's doing to shape our world. View it from the perspective of its competitive advantage(s) and its tenacious founder/leader. Bezos has built a company that year in and year out allows him to reinvest the proceeds of the business back into the business. Amazon plays to its strengths in e-commerce, fulfillment, and distribution to grow its presence around the globe, and Bezos has no timeline other than the long run.

Ask yourself two basic questions: If Amazon closed its doors tomorrow and went out of business, would it matter? and If I gave you $125 billion (Amazon's current market cap), do you think you could then go out and unseat it from its market-leading position? The respective answers in my book are "Yes" and "No."

One of my favorite Warren Buffett saws is "Only buy something that you'd be perfectly happy to hold if the market shut down for 10 years." If you're looking for a stock to buy and hold for the next decade, Amazon.com is one you need to consider.

Clean Harbors (NYSE: CLH  )
I love finding companies that fly under the radar, and Clean Harbors is one. It's a smaller company with a market cap of just over $3 billion. But with its founder Alan McKim steering the ship as CEO, I think there is plenty of room for this company to grow. Oh yeah, did I also mention McKim owns almost 8% of shares outstanding? I love founder/leaders like McKim (and Bezos) who eat their own cooking.

The business operates in four segments: technical services (Hazmat and disposal); field services (environmental cleanup); industrial services (high-pressure and chemical cleaning); and oil and gas field services (exploration and directional boring services). While that may all sound extremely boring, the fact of the matter is that the company operates in a market with very high economic and regulatory barriers to entry -- that's investor code for "competitive advantage."

During our discussion Barry brought up the fact that Clean Harbors could be an attractive acquisition target; and I agree, it certainly could be. Its most profitable segment is in technical services, which generates 65% of the company's operating profit, and today's price is about 20 times full-year estimates, making it an attractive buy today. I wouldn't invest in the company with the notion that it will be acquired, as I believe it will do quite well on its own. But an acquisition would come at a hefty premium from today's price if it ever materialized.

Don't just sit there, get moving!
With all the talk of where the markets are headed and when the Fed is going to take its foot off the gas, it's understandable that investors are a bit nervous today. That's why it's more important than ever to make sure the companies we're buying have durable competitive advantages, healthy financials, and room to grow. Amazon and Clean Harbors do, and for investors with a longer time horizon, they are great opportunities today.

Want to learn more about Amazon? The Motley Fool's premium report will tell you what's driving the company's growth, and fill you in on reasons to buy and reasons to sell Amazon. The report also has you covered with a full year of free analyst updates to keep you informed as the company's story changes, so click here now to read more.


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