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TheStreetOutside (< 20)

Your Favorite Stock For the Next Five Years

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July 31, 2010 – Comments (10) | RELATED TICKERS: CLDX

Although I am new here, I think that I will go ahead and try my hand at starting a chain post that would benefit all of us.  I haven´t seen anything quite the same yet, but then again if this has already been done recently I apologize for the repetition.

For each person kind enough to take a moment and respond, I was curious what your favorite stock for the next five years would be and your rationale behind holding it.  This could potentially give a lot of us here some good ideas to research on our own.  Thanks again for your replies...

 

Edit:  Guess I will throw my pick in as well.  Celldex, CLDX, looks like a good deal to me after having done my own thorough analysis.  It provides a margin of safety (I believe worst case buyout is $10)($15 price target at the moment), a solid balance sheet, and adequate return for the risk taken.  It´s technology has a significant moat, and a partnership with pfizer also makes it more legit.  Near term, I believe the market will reprice it to the upside when it announces the phase 3 trial for its brain cancer drug CDX-110 (and receives 50 mil milestone payment) and the phase 2 trial for metastatic breast cancer CDX-011.   Also, institutions have been buying in (including Blackrock)

Instead of mumbling on with this directionless train of thought, I will simply say that regarding the deep pipeline and future prospects for drug approvals in the next five years, all available for the low price of 150million, this pick provides the unusual combination of value with technology that can change the future.  Here are some links that should help:

Recent fact sheet (a little outdated)

Quarterly results coming out August 4th (might want to be positioned ahead)

More pipeline

CNN press and recent release on newest drug for bladder cancer 

Far from a perfect pitch I know, but give me a break I am new at this ;)

Position:  I am long.  

 

 

10 Comments – Post Your Own

#1) On July 31, 2010 at 11:23 AM, DarthMaul09 (29.79) wrote:

Taseko Mines Limited (USA)

P/E 9.56

EPS 0.43

Key stats and ratios
                                           Q1 (Mar '10)           2009

Net profit margin                 101.25%                5.59%

Operating margin                 18.95%                 5.96%

EBITD margin -                                                 6.64%

Return on average assets     53.74%                2.08%

Return on average equity      97.06%                3.60%

Employees         281

Add in an improving global economy (outside the US) and the not yet approved Prosperity mine (numbers above are without production from Prosperity) suggests this company will do well on it own or be bought out by a much bigger miner with lots of cash.

Disclosure:  I have a relatively large bet on this company.

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#2) On July 31, 2010 at 12:50 PM, blesto (30.88) wrote:

Compass Diversified Holdings (CODI)

I like the approach of their business plan and the aquisition criteria for the companies they manage.

CODI is a S corporation, not exactly a MLP(Master Limited Partnership) like some oil trusts or BDC(Business Developement Company) but is similar. It has to do with taxes and you file a K-1 with your return. The tax return kit CODI sends is very user friendly.

Management consistently eats their own cooking. I can't remember when the directors ever sold any shares.

The dividend (really a distribution) has steadily increased since their IPO.

Looking at their initial numbers might not seem to impressive, but I think you need to dig deep behind the numbers and look at each of their individual companies.

CODI has had a rough patch this past year, but I believe they have set themselves and their shareholders up for a promising future. I'm holding for at least the next five years.

Disclosure: blesto owns shares of CODI and has been enjoying the distributions. 

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#3) On July 31, 2010 at 2:26 PM, rd80 (97.08) wrote:

McDonald's (MCD)

Pitches (a little dated) here and here.  

Disclosure:  Long MCD

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#4) On July 31, 2010 at 2:51 PM, dragonLZ (99.33) wrote:

Have a few favs, but CNO is my pick for this post.

Love the way CNO's chart looks like. Huge, huge, HUUUUGE, volume increase when this stock started going up around March of 2009. CNO's price back than $.24, today $5.37.

Take a look at this chart. Does it look like this stock has corrected at all? Hardly. I don't think that can be said for many stocks right now.

Right now, CNO is 24% off its 52W high, which I think just shows strength, when you take into account that we had a very severe market correction for the past 2 months.

CNO is still 73% higher than its 52W low of $3.11 (where it was exactly a year ago), and 2,100% up from its 2009 low. Very, very strong.

One more sign of strength: There are no people/institutions anxious to sell this stock.

Ever since CNO started trading sideways (which I hope you agree is normal after a huge 2,000% run up), its average trading volume has been below 5 million shares. However, when CNO jumped 29% on 10/14/09, the volume was 40 million shares, with almost no sellers as CNO finished that day only 4 cents below the day's high. 

Ever since that huge jump, CNO was never down more than 10% in a single day. Very unusual for a "cheap" stock that is, once again, 2,100% up from where it was just 16-17 moths ago. Very, very unusual.

Love CNO.

Here is what CNO does (borrowed from MSN):

CNO Financial Group, Inc., formerly Conseco, Inc., is the holding company for a group of insurance companies operating throughout the United States that develop, market and administer supplemental health insurance, annuity, individual life insurance and other insurance products. It focuses on serving the senior and middle-income markets. The Company sells its products through three distribution channels: career agents, professional independent producers (some of whom sell one or more of its product lines exclusively) and direct marketing. It operates in three segments: Bankers Life, Colonial Penn and Conseco Insurance Group.

(Don't forget to check out CNO's recent EPS growth and insiders' buying).

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#5) On July 31, 2010 at 6:43 PM, SockMarket (35.76) wrote:

CNI

I have liked them for a few years now, and they may be a bit high at this point but I think they are well run (have a superstar CEO) and are in an excellent position to do well if energy does well, or if the economy ever does anything. 

- long CNI

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#6) On July 31, 2010 at 6:57 PM, 100ozRound (29.42) wrote:

DarthMaul x2

that and/or SLW

both are about = in my portfolio

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#7) On July 31, 2010 at 7:28 PM, goalie37 (90.66) wrote:

@ TheStreetOutside - welcome to the Fool and thanks for the great idea for a thread!

I have 14 stocks in my portfolio, and my favorite tends to change depending on what opportunities the market gives me.

If I had to pick one, it would probably be Johnson and Johnson (JNJ).  3.7% dividend yield that over the last 5 years has averaged 12% dividend growth.  I love a company that keeps giving me a raise without me doing anything.

The fundamentals are just sick.  21% net margins.  More cash than total debt.  Exceptional free cash flow.  More than enough current assets to cover current liabilities.  Staggering retained earning numbers.  Slightly fewer shares outstanding than in previous years.  And that's just the numbers part.

Their product line is exceptional.  9 drugs with over $1 billion in sales each.  Over the counter products used by millions.  And if someone creates a better drug?  They just buy out the company like they did with Cougar Biopharma. 

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#8) On August 01, 2010 at 12:20 AM, uclayoda87 (29.35) wrote:

Agree with DarthMaul09 and 100ozRound (TGB and SLW).  It will be hard to beat these metal plays over the next five years.  My more speculative bets are PANL and VMW, which continue to do well.  They are the next generation monitor/lighting (PANL) and virtual servers (VMW), which are both likely to see significant sales growth in the next two years.  My last blog was about SQM which may show good if not great growth over the next five years based on increased fertilizer demand (short-term) and the increased used of a new Li battery (long-term).

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#9) On August 01, 2010 at 1:41 AM, Beorn10 (30.05) wrote:

I'll take a big Bearish view and choose CEF, because if fiat currencies begin to fail based on sovereign debt problems in Europe and the US, then gold and silver may double or triple in value in a very short period of time.  The miners may eventually benefit from this but the metals will go up first.

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#10) On August 01, 2010 at 3:20 PM, TheStreetOutside (< 20) wrote:

Preciate the new ideas guys- been doing my homework on a few of ´em. 

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