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4 Stock Picks for a Long-Term Investment Approach

These companies have consistently increased sales and Ebitda

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Feb 16, 2022
Summary
  • Visa Inc., Goldman Sachs Group Inc., CBRE Group Inc. and NICE Ltd. have highly predictable businesses
  • They have grown revenue and Ebitda steadily over the past years, resulting in strong share price performances
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The GuruFocus business predictability rating ranks companies on a five-star scale, defining the more predictable companies as businesses whose revenue per share and Ebitda per share (or book value per share in the case of financial stocks) have been growing steadily and who have produced a strong long-term performance of their stock prices.

Thus, those following a long-term investment strategy could find attractive investing opportunities by screening the market for stocks that have a high GuruFocus business predictability rating, in my opinion. The following stocks all trade with high business predictability ratings and are recommended by Wall Street.

Visa Inc.

The first company that matches the criteria is Visa Inc (

V, Financial), a credit card services giant based in San Francisco, California.

Visa Inc.'s business has a five-star business predictability rank. The company saw its revenue per share increase by 13.30% and its Ebitda per share increase by 14.80% on average every year over the past 10 years.

The share price ($227.82 at close on Tuesday) has increased amazingly over the past several years, as shown by the chart below, determining a market capitalization of $491.75 billion.

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GuruFocus assigned a financial strength rating of 6 out of 10 and a profitability rating of 9 out of 10 to the company.

The price-earnings ratio is 37.61 versus the industry median of 14.58, the enterprise-value-to-Ebitda ratio is 26.97 versus the industry median of 20.68 and the price-sales ratio is 19.88 versus the industry median of 3.89.

Wall Street sell-side analysts recommend a median rating of buy for the stock with an average target price of $271.39 per share.

Goldman Sachs Group Inc.

The second company that meets the criteria is Goldman Sachs Group Inc. (

GS, Financial), a New York-based financial services giant focusing on corporations, financial institutions, governments and wealthy individuals worldwide.

Goldman Sachs Group Inc.'s business has a three and half-star business predictability rank. The company saw its revenue per share increase by 7.30% and its book value per share increase by 6% on average every year over the past 10 years. Regarding this company, since it is a financial stock, the 10-year average growth rate for the book value per share is used to determine the predictability rank of the business in place of the Ebitda growth rate.

The share price ($363.94 at close on Tuesday) has grown astonishingly over the past 10 years, determining a market capitalization of $119.92 billion.

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GuruFocus assigned a financial strength rating of 3 out of 10 and a profitability rating of 6 out of 10 to the company.

The price-earnings ratio is 6.06 versus the industry median of 13.64, the price-book ratio is 1.08 versus the industry median of 1.33 and the price-sales ratio is 2.21 versus the industry median of 4.19.

Wall Street sell-side analysts recommend a median rating of overweight for this stock and have established an average target price of about $444.44 per share.

CBRE Group Inc.

The third company that meets the criteria is CBRE Group Inc. (

CBRE, Financial), a Los Angeles-based global provider of commercial real estate services.

CBRE Group Inc.'s business has a four-star business predictability rank. The company saw its revenue per share increase by 18.5% and its Ebitda per share increase by 11.9% on average every year over the past 10 years.

The current stock price ($223.85 per share at close on Tuesday) has grown like crazy over the past 10 years to a market capitalization of $34.42 billion.

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GuruFocus assigned a financial strength rating of 6 out of 10 and a profitability rating of 8 out of 10 to the company.

The price-earnings ratio is 23.6 versus the industry median of 11.92, the enterprise-value-to-Ebitda ratio is 14.44 versus the industry median of 12.77 and the price-sales ratio is 1.32 versus the industry median of 3.04.

Wall Street sell-side analysts recommend a median rating of overweight for the stock with an average target price of $129.17 per share.

NICE Ltd.

The fourth company that meets the criteria is NICE Ltd. (

NICE, Financial), a Ra'anana, Israel-based provider of various software solutions for businesses in Israel and overseas.

NICE Ltd.'s business has a five-star business predictability rank. The company saw its revenue per share increase by 9% and its Ebitda per share increase by 14.60% on average every year over the past 10 years.

The current share price ($264 at close on Tuesday) has increased exponentially over the past 10 years, determining a market capitalization of $16.11 billion.

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GuruFocus assigned a financial strength rating of 7 out of 10 and a profitability rating of 8 out of 10 to the company.

The price-earnings ratio is 86.82 versus the industry median of 27.85, the enterprise-value-to-Ebitda ratio is 34.16 versus the industry median of 16.21 and the price-sales ratio is 9.4 versus the industry median of 3.45.

Wall Street sell-side analysts recommend a median rating of buy for the stock with an average target price of $344.30 per share.

Disclosures

I/we have no positions in any stocks mentioned, and have no plans to buy any new positions in the stocks mentioned within the next 72 hours. Click for the complete disclosure
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