3 Stocks to Buy Today: John Wiley & Sons, Weight Watchers International, and Coca-Cola

Coca-Cola, Weight Watchers, and John Wiley could be the best buys in the market today. Here's why.

Mar 31, 2014 at 9:02AM

It can be hard to know how to invest your money in a bull market. Everything seems to be going up, but eventually it has to come back down. If you don't want to chase Tesla Motors into the stratosphere, you don't have to. It has never been a better time to buy great companies at low valuations.

Companies like John Wiley & Sons (NYSE:JW-A), Weight Watchers International (NYSE:WTW), and Coca-Cola (NYSE:KO) may underperform the market in the next year or two, but I think investors can count on them to outperform in the long run.

Under-the-radar moat
Most people know John Wiley as a book publisher. It publishes books and textbooks in specialized fields such as accounting, computer programming, and mathematics. What most people do not know is that book and textbook publishing makes up less than half of Wiley's revenue and only 16% of its profit. The bulk of Wiley's value is derived from an under-the-radar niche: academic journals.

The academic journals business is much better than the book and textbook publishing businesses. For instance, it cannot be replicated by a competitor and it has a shrinking physical asset base. Wiley publishes a wide range of academic journals that dominate narrow niches. Examples include Journal of Computer Assisted Learning, Ecology of Freshwater Fish, and Biometric Journal. These are niches in which there is room for only one to journal, or perhaps two at the most. As a result, Wiley faces little competition from other journal publishers.

In addition, the move to digitize academic journals is cutting back on publishing costs, making the business even more profitable. Also, the libraries and government agencies that subscribe to Wiley's bundle of journals are forced to keep buying from Wiley lest they deny their patrons access to the top journals in numerous fields.

As a result of Wiley's pricing power and improving product economics, I view the stock's 12-times-free-cash-flow multiple as low enough to give long-term investors a solid return over the next decade.

A brand name becomes a deep value pick
I have been bullish on Weight Watchers for a while -- and apparently I'm the only one! The stock has reliably declined by a large amount each quarter over the last year or so and now trades at less than half of what it did in August.

Wtw Stock Price

Source: Yahoo! Finance

However, the market seems to be giving long-term investors an opportunity to earn a high return. Weight Watchers has struggled from the impact of free apps and poor advertising campaigns, but it is still the best company in the weight-loss business. Its meetings involve people sharing stories and lending support to one another. Weight Watchers has proved to be the most effective weight-loss program, receiving U.S. News' top ranking in the weight-loss category.

Moreover, the company has a far bigger advertising budget than any of its peers. The company spent slightly less than $300 million in advertising in 2013, only $50 million less than NutriSystem (NASDAQ: NTRI) generated in revenue. Free apps like MyFitnessPal are unlikely to gather anything close to a $300 million advertising budget, so Weight Watchers has a permanent lead in that department.

If you agree that Weight Watchers is the most effective program and has the biggest megaphone (i.e., advertising budget) to tell everyone about it, then you probably agree that Weight Watchers is cheap at less than five times free cash flow. The company will have another bad year in 2014, and 2015 will not be its best either; but the best company usually wins out in the long run. If Weight Watchers really is the best company in the industry -- and most signs say it is -- then the stock is a wonderful buying opportunity for long-term investors.

An inevitable winner
Coca-Cola is another stock that long-term investors should consider buying today. The market is concerned that its weak performance in 2013 is a sign of things to come; the market's myopia gives long-term investors a chance to buy a durable business at a low price.

Although soft-drink consumption is declining in the United States, the world will drink more Coke in 10 years than it drinks today. The top 10 Coke-drinking countries outpace the rest of the world's Coke consumption by a factor of four. Even as top-consuming nations like Mexico and the United States cut back on consumption, up-and-coming countries like Brazil, India, and China will increase their consumption. As a result, I believe that Coke will do more business in 2024 than in 2014.

Ko Worldwide Consumption Vs Top

Source: The Coca-Cola Company

If you believe in the durability of the Coca-Cola brand, it may serve you well to scoop up shares near its lowest price in more than a year.

Bottom line
Long-term shareholders need not worry about how bubbly or depressed the rest of the market is at any given time. The key to long-term outperformance is to buy good businesses at low prices and hold them for the long run. If you can do that, you will do well over time regardless of what the market does in the next year or two.

Looking for more stocks to buy? Consider these 6 growth stock picks
They said it couldn't be done. But David Gardner has proved them wrong time, and time, and time again with stock returns like 926%, 2,239%, and 4,371%. In fact, just recently one of his favorite stocks became a 100-bagger. And he's ready to do it again. You can uncover his scientific approach to crushing the market and his carefully chosen six picks for ultimate growth instantly, because he's making this premium report free for you today. Click here now for access.

Ted Cooper owns shares of Coca-Cola, John Wiley & Sons, and Weight Watchers International. The Motley Fool recommends Coca-Cola and Tesla Motors. The Motley Fool owns shares of Coca-Cola, Tesla Motors, and Weight Watchers International and has the following options: long January 2016 $37 calls on Coca-Cola and short January 2016 $37 puts on Coca-Cola. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

1 Key Step to Get Rich

Our mission at The Motley Fool is to help the world invest better. Whether that’s helping people overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we can help.

Feb 1, 2016 at 4:54PM

To be perfectly clear, this is not a get-rich action that my Foolish colleagues and I came up with. But we wouldn't argue with the approach.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich" rated The Motley Fool as the #1 place online to get smarter about investing.

"The Motley Fool aims to build a strong investment community, which it does by providing a variety of resources: the website, books, a newspaper column, a radio [show], and [newsletters]," wrote (the clearly insightful and talented) money reporter Kathleen Elkins. "This site has something for every type of investor, from basic lessons for beginners to investing commentary on mutual funds, stock sectors, and value for the more advanced."

Our mission at The Motley Fool is to help the world invest better, so it's nice to receive that kind of recognition. It lets us know we're doing our job.

Whether that's helping the entirely uninitiated overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we want to provide our readers with a boost to the next step on their journey to financial independence.

Articles and beyond

As Business Insider wrote, there are a number of resources available from the Fool for investors of all levels and styles.

In addition to the dozens of free articles we publish every day on our website, I want to highlight two must-see spots in your tour of fool.com.

For the beginning investor

Investing can seem like a Big Deal to those who have yet to buy their first stock. Many investment professionals try to infuse the conversation with jargon in order to deter individual investors from tackling it on their own (and to justify their often sky-high fees).

But the individual investor can beat the market. The real secret to investing is that it doesn't take tons of money, endless hours, or super-secret formulas that only experts possess.

That's why we created a best-selling guide that walks investors-to-be through everything they need to know to get started. And because we're so dedicated to our mission, we've made that available for free.

If you're just starting out (or want to help out someone who is), go to www.fool.com/beginners, drop in your email address, and you'll be able to instantly access the quick-read guide ... for free.

For the listener

Whether it's on the stationary exercise bike or during my daily commute, I spend a lot of time going nowhere. But I've found a way to make that time benefit me.

The Motley Fool offers five podcasts that I refer to as "binge-worthy financial information."

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. It's also featured on several dozen radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable ... and I don't say that simply because the hosts all sit within a Nerf-gun shot of my desk. Rule Breaker Investing and Answers contain timeless advice, so you might want to go back to the beginning with those. The other three take their cues from the market, so you'll want to listen to the most recent first. All are available at www.fool.com/podcasts.

But wait, there's more

The book and the podcasts – both free ... both awesome – also come with an ongoing benefit. If you download the book, or if you enter your email address in the magical box at the podcasts page, you'll get ongoing market coverage sent straight to your inbox.

Investor Insights is valuable and enjoyable coverage of everything from macroeconomic events to investing strategies to our analyst's travels around the world to find the next big thing. Also free.

Get the book. Listen to a podcast. Sign up for Investor Insights. I'm not saying that any of those things will make you rich ... but Business Insider seems to think so.

Compare Brokers