Some companies make the headlines every day. But the ones that will make you rich often keep a low profile.
For instance, one company has seen its stock has more than double in the past year, with solid earnings growth and healthy profit margins and returns on equity. Insiders hold almost 12% of its shares, a reflection of commitment and confidence in the stock. It even sports a healthy 2% dividend and has a reasonable valuation based on estimates of future earnings. Are you intrigued?
Would you believe that this company is Tupperware
If you're like me, you know that boring companies can deliver great results, but you still look more closely at exciting companies. That's not crazy -- the surgical-robotics company Intuitive Surgical
Here's another one: a company that recently doubled its earnings guidance. Specifically, its management now expects that it will earn around $0.91 per share in its third quarter, instead of the previously expected $0.35 to $0.45. The company is Black & Decker
Pros and cons
One advantage of ho-hum humdingers is that others don't rush to them very quickly, so you get a chance to find them. You might, for example, screen for companies with reasonable price-to-earnings ratios and high revenue growth rates, and look for contenders among them.
Company |
CAPS Stars (out of 5) |
3-Year Revenue Growth Rate |
P/E |
Business |
---|---|---|---|---|
Flowserve |
***** |
16% |
14 |
Pumps, motors, and seals |
Mosaic |
**** |
22% |
17 |
Crop nutrients |
Walgreen |
**** |
10% |
19 |
Drugstores |
Baker Hughes |
***** |
11% |
12 |
Oilfield services |
U.S. Steel |
**** |
10% |
12 |
Steel |
Data: Motley Fool CAPS.
So hunt away -- but be sure a company isn't so boring to you that you won't want to at least read its annual and quarterly reports. Keeping up with your holdings is another way to enhance your performance.