The animal spirit stays with the family. Philip Fisher, in his book Common Stocks and Uncommon Profits, said that the best time to sell a stock was "almost never", echoing Buffett’s preferred holding period. In the Forbes column, Fisher offered a few stock tips just in case we are not as bullish as he is:
I still believe there is a strong bull market ahead, and I am not bothered by snarky attacks. But even if you are less optimistic than I am there is probably room in your portfolio for well-managed, high-yielding stocks that pay out more in dividends than Treasury bonds and have good long-term-growth prospects.
Here are the list of stocks he recommended:
Australia & New Zealand Banking (ANZBY)
On Aug. 30 I recommended Westpac Banking (WBK, 112). There is another big Australian bank worth owning, Australia & New Zealand Banking (ANZBY, 23). Along with Westpac, this well-managed bank has been named one of the world's most sustainable banks by Dow Jones for four years running. Sustainability is not something any bank investor should take for granted. Australia & New Zealand Banking sells at only eight times my estimate of 2010 earnings and has a 4.2% dividend yield.
For an even higher-yielding Aussie stock try Telstra (TLSYY, 13), the country's dominant telecommunications firm. This telecom has $25 billion in revenues and 43,000 employees and was formerly owned by the Australian government (a fund set up by the government still owns 17%). Telstra has a 9.5% dividend yield.
Readers of my July 19 column know I think natural gas volume will grow steadily for decades. Calgary-based TransCanada (TRP, 37) runs one of North America's largest natural gas pipelines, carrying more than half of western Canada's gas to market via more than 37,000 miles of pipe. It also has 11,000 megawatts of power generation capability and should grow moderately in both areas. This $9 billion (revenues) firm sells at 15 times estimated 2010 earnings and has a 4.2% dividend yield.
People fear Spain and dislike oil producer Repsol (REP, 27) because it cut its dividend. I like the stock. Repsol produces 876,000 oil-equivalent barrels a day, has 2.1 billion barrels of reserves and has 926,000 barrels a day of refining capacity. It's also selling off lagging assets, upgrading downstream facilities and generally getting more competitive. In terms of valuation, it sells at 45% of revenues, 12 times 2010 earnings and about 115% book value. There is also a 3.8% dividend yield.
France's Sanofi-Aventis (SNY, 33) is a global pharmaceutical company with specialties ranging from diabetes remedies to vaccines. Excluding acquisitions (like it's recent bid for Genzyme), the company should grow at 10% a year and is selling at a price/earnings multiple of ten times this year's earnings and eight times 2011 earnings. Like TransCanada you can buy Sanofi for close to book value, and it has a 3.3% dividend yield.
Marks & Spencer (MAKSY)
Marks & Spencer (MAKSY, 12) is Britain's largest clothing retailer. Anyone who has ever visited its flagship Oxford Street store in London knows that it's a jewel among global merchandising franchises. The company's profits have declined with the economy, but it has continued to gain market share and bolster its balance sheet. It keeps expanding into food, housewares and furniture, and is starting stores outside Britain from Dubai to Shanghai. Marks & Spencer sells at 60% of revenue and ten times my estimate of this year's earnings, and has a 5.1% dividend yield.
Read the complete Fisher column in Forbes.com here.
Check out his stock holdings here
Also check out:
- Kenneth Fisher Undervalued Stocks
- Kenneth Fisher Top Growth Companies
- Kenneth Fisher High Yield stocks, and
- Stocks that Kenneth Fisher keeps buying
About the author:
My name is Ben C. and I am 2nd year MBA candidate at the Anderson School of Business at the University of California- Los Angeles. I have a BS in Economics from the Wharton School of Business at the University of Pennsylvania. Before coming to Anderson I worked as a generalist equity research analyst for Right Wall Capital, a long-short equity hedge fund located in New York City. Prior to working at Right Wall I worked as an analyst at Blue Ram Capital, another long-short equity hedge fund located in Rye Brook, NY. This past summer, I worked for West Coast Asset Management as a research analyst. West Coast, which was co-founded by Kinko’s founder Paul Orfalea, is run by well-known value investors Lance Helfert and Atticus Lowe.