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Three stocks below the 200 day worth owning forever

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June 01, 2012 – Comments (0) | RELATED TICKERS: CVX , K , MCD

 

 

 

Well let's be serious, forever is a long time, so we'll just say it's safe to own these three stocks till the end of American Capitalism as we know it today.  These aren't glamorous picks or have really sexy products.  They are just good and safe bets for the long haul that happen to be trading at great prices as a result of the recent downturn.

 McDonald's is a name that many of us grew up with.  Now many more are growing up with that name all around the world, not just in America.  With China opening up for the golden arches it's growth potential over the coming years is high to say the least.  It's currently trading at $86.88 at a P/E of 16.20 and offering a yield of 3.23%.  It's well below the 200 day trading average of $94.66.  I purchased some on Friday, June 1st and am long MCD for at least 5 years.

Chevron is not your average oil company and that's why I like it more than the others.  It's diversified in refining, exploration, pipeline transportation, and even natural gas just to name a few.  It's P/E is very attractive at 7.08 and the yield of 3.73% provides a great safety net against a backdrop of accelerating earnings.  It's currently trading at $96.35 which is well below the 200 day moving average of $102.86.  I purchased some on Friday, June 1st and am long CVX for at least 5 years. 

Finally, we have Kellogg.  We all know and love their products.  The stock is at a bargain price of $48.22 trading well below it's 200 day moving average of $51.70.  It's P/E is in line with other stocks in its sector at $14.28, however, its earnings growth recently has been above average compared with it's competitors.  The acquisition of everyones favorite "junk-food" potato chip, Pringles, should provide a boost to the bottom line in the coming quarters.  It's currently yielding 3.57% in the meantime for those that are patient.  I purchased some on Friday, June 1st and am long K for at least 5 years.

 Sometime these downturns can be a blessing in disguise allowing savvy investors to accumulate share in companies that normally, for years at a time even, trade above 200 day moving averages.

 

 

 

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