At any given time, there are some good stocks, some bad stocks, and an awful lot in between. The quality of the company is an important factor, as is growth potential. Price is also crucial, as overpaying for even the best company can lead to poor results. Given that all of these factors can change, the best stocks of yesterday aren't necessarily the best stocks of today. Simply looking at the past performance of a stock tells you exactly nothing about the future.
What are the best stocks to buy today? Three of our Foolish contributors have come up with some ideas. These are the best of the best, and investors looking to add to their portfolios should start here.
Tim Green: Warren Buffett's Berkshire Hathaway (BRK.A 0.03%) (BRK.B -0.22%) is already a massive company, valued at around $350 billion. At this point, vastly outperforming the market will be more difficult than in the past, simply because there are far fewer acquisitions available that can truly move the needle. But I don't think there's a better combination of safety and growth available to investors today.
Berkshire is comprised of dozens of companies, with Buffett specifically looking for durable competitive advantages when he makes acquisitions. GEICO, Burlington Northern, Precision Castparts, and Berkshire Hathaway Energy are four examples of subsidiaries that should stand the test of time. Berkshire's performance can be volatile, with insurance still a major part of the business, but Buffett has managed to grow the company's book value at an incredible rate over the decades.
In some ways, buying shares of Berkshire Hathaway is like buying an index fund. Not only do you get a broad set of leading companies that Berkshire has acquired, but you also get a portfolio of stocks, including Coca-Cola and IBM, that Buffett believes will produce above-average returns. Buffett won't be around forever, but the decentralized nature of Berkshire, with each subsidiary run by a trusted manager, should allow the company to continue to thrive in the long run.
Berkshire Hathaway isn't going to be a "ten-bagger," at least not anytime soon. And the company doesn't pay a dividend, which is actually a good thing since Buffett has an unparalleled record when it comes to allocating capital. But Berkshire is a stock that's likely to provide investors with a solid return in the long run with minimal risk.
Brian Feroldi: It's hard for me to think of a better opportunity for new money right now than Celgene (CELG), as the biotech giant is offering up a compelling combination of growth and value right now that I think is hard to ignore.
Celgene's growth in recent years has come on the back of Revlimid, its blockbuster treatment for the blood cancer multiple myeloma. Sales of Revlimid should top $6.7 billion this year and are expected to exceed $8 billion next year. With Revlimid protected from generic competition until March 2022, I think it stands a great chance of powering Celgene's top line higher for years to come.
But there's more to Celgene's growth story than just Revlimid. The company's newer multiple myeloma treatment Pomalyst is growing fast and should add more than $1 billion to the company's top line this year. Otezla, its oral anti-inflammatory drug, grew in the triple-digit rates last quarter and should also reach blockbuster status this year.
Celgene also boasts a robust pipeline of product candidates including Ozanimod, its experimental compound for treating ulcerative colitis and multiple sclerosis. Industry watchers believe that if this compound finds its way to market, then it could pull in more than $4 billion in annual sales.
And yet, despite its huge growth prospects, Celgene's stock has been sold off with the rest of the biotech sector and is down almost 30% from its 52-week high. Shares are now trading for under 15 times next year's earnings projections, pushing the company's PEG ratio well below 1. That's a market gift that shouldn't be overlooked, which is why I think Celgene is a great stock to buy today.
Dan Caplinger: The aerospace industry has been one of the most consistently successful areas of the economy over the past several years, and Boeing (BA 1.58%) has done a good job of turning the global boom in aircraft purchases into revenue and profit growth. Between the consolidation of U.S. airlines and the rapid growth of new players among global carriers, Boeing has had plenty of customers lining up for new and updated aircraft models of all sizes.
Most recently, Boeing has benefited from the normalization of trade relations with the nation of Vietnam. The aircraft manufacturer got an order from VietJet, a Vietnamese carrier that operates a fleet of narrow-body aircraft, for 100 of Boeing's 737 MAX 200 airplanes. The order, worth about $11.3 billion, is the single largest order for commercial aircraft ever in Vietnam. President Obama and the President of Vietnam both witnessed the signing of the contract, which represented a landmark in relations between the two countries.
Boeing has plenty of opportunities to serve both well-established and newer markets across the globe as air travel becomes more prevalent. With so many avenues for growth, Boeing looks like it has every chance of rewarding long-term shareholders with strong gains.