Yesterday I watched
Walk the Line
, the movie about Johnny Cash starring Joaquin Phoenix, for the
fourth time. Having seen Cash perform live, and having visited Sun
Records' studio in Memphis, I'll watch that movie every chance I
get. There's one scene that resonates with me each time. It's the
one where Cash is auditioning for Sam Phillips at Sun Records, and
Phillips, bored with the same old songs, stops Cash's trio a few
verses in and requests something from the heart.
Phillips says "If you was hit by a truck and you was lying out
there in that gutter dying, and you had time to sing ONE song. One
song that people would remember before you're dirt... Cause I'm
telling you right now, that's the kind of song people want to hear.
That's the kind of song that truly saves people."
It got me thinking about my work offering stock picking strategies
and the stocks identified by those strategies. So if I was hit by a
truck and dying in a gutter, what strategies would I recommend
people follow? What stocks would I highlight for someone to add to
their portfolio? It's akin to creating a bucket list of strategies
and stocks. You know, stocks that you should own now before you
"kicked the bucket."
Give this premise to a hundred people and you'll probably get a
hundred different answers. Most people are probably going to
mention stocks like
). But I'm much less attracted to the glamorous, well-known stocks.
And because my style involves providing something that you can't
find anywhere else, I like to discover the underdogs and those with
hidden, outstanding characteristics that reveal a beauty within.
And, thankfully, those are often where the potential gains and
rewards are the biggest.
"I Was Hit by a Truck" Strategies
I began this task by looking at a variety of strategies in the
Zacks Research Wizard
. The goal was to find strategies that have been performing well,
have a solid economic rationale, and offer a diversity of solutions
that any investor could implement. These are strategies that could
be employed for a lifetime and would allow you to build a nice nest
egg if followed through thick and thin.
Here's the list of my bucket strategies in the Research Wizard:
in the Screen of the Week (SoW) folder (64.1% 2012 YTD)
in the Value Strategies folder (55.2% 2012 YTD)
Filtered Zacks Rank2
in the All-Style Strategies folder (69.5% 2012 YTD)
Growth and Income Winners
in the Growth and Income Strategies folder (18.9% 2012 YTD)
in the Anomalies folder (22.6% 2012 YTD)
"I'm Dying in a Gutter" Stocks
Regarding a list of featured stocks, remember that I like to
uncover the hidden gems -- the stocks not necessarily in the
spotlight, but still onstage and presenting the best opportunities
for success. The stocks listed below consist of a combination of
stocks that occurred most frequently in the screens this week and
those that I currently think have the potential for great profits.
What I also admire about these stocks is that I can't find anything
wrong with them, which usually makes for a great investment.
- Georgia Gulf Corp.
Georgia Gulf is a leading North American manufacturer and
international marketer of two highly integrated product lines:
chlorovinyls and aromatics. The primary products that the company
sells externally include PVC resins, PVC compounds and caustic soda
in the chlorovinyls segment, and phenol and acetone in the
aromatics business. The stock of this company is up 112% YTD.
Several valuation ratios are below market and industry averages,
including Price/Sales, Price/Book and Price/Cash Flow.
Profitability is also higher than the industry average. The company
is also rated a Strong Buy by the Zacks Rank and a Buy by the
average broker. Analysts have also been increasing earnings
projections for Georgia Gulf.
- Lithia Motors Inc.
Lithia Motors is a leading operator and retailer in the highly
fragmented automotive industry. Lithia sells new and used cars and
light trucks, sells replacement parts, provides vehicle
maintenance, warranty, paint and repair services, and arranges
related financing and insurance for its automotive customers. This
Zacks #1 Rank (Strong Buy) company is also rated a Strong Buy by
Wall Street analysts. This company is 7-for-7 in positive earnings
surprises over the last seven quarters. Analysts have also been
increasing earnings estimates for the next quarter and fiscal year.
This company also pays a nice dividend and most valuation ratios
are at or below industry peers. Thus far, the stock is up 49% for
- Stewart Information Services Corp.
Stewart Information's primary business is title insurance. Stewart
issues policies on homes and other real property through issuing
locations in all fifty states, the District of Columbia and through
several foreign companies. This company also sells computer-related
services and information, as well as mapping products and
geographic information systems, to domestic and foreign governments
and private entities. This stock is a big winner this year, up
109%. Yet all valuation measures are still below industry averages.
Recently analysts have made dramatic increases in earnings
projections for the current fiscal quarter and for 2013. The
company averages a Buy rating by Street analysts and a Strong Buy
rating by the Zacks Rank.
- CVR Energy Inc.
Headquartered in Sugar Land, Texas, CVR Energy is an independent
refiner and marketer of high value transportation fuels and,
through a limited partnership, a producer of ammonia and urea
ammonia nitrate fertilizers. This company has a history of
reporting positive earnings surprises and has experienced major
upward revisions in earnings estimates for the next fifteen months.
No wonder this company is a Zacks #1 Rank (Strong Buy). CVR Energy
also has an ROE of 41% and a great valuation despite being up 112%
- Libbey Inc.
Libbey is the leading producer of glass tableware in the U.S. and
Canada. This firm's products are sold to a broad range of
foodservice, retail, industrial and premium customers and are
exported to more than 100 countries. Both the Zacks Rank and Street
analysts consider this company a Strong Buy. Its Price/Earnings of
8.7, Price/Sales of 0.5 and Price/Cash Flow of 5.3 paint a good
valuation story. The stock price is up about 41% YTD. And as with
any stock I recommend, Libbey has a solid history of positive
earnings surprises and increasing earnings projections into next
Create You Own Bucket List of Stocks
No, I haven't been hit by a truck and don't lay dying in a gutter
-- and I hope you aren't either. But I think it's an interesting
way to approach life and investing. If I was to bequeath some
investment ideas or select some of the best ideas from within the
Zacks Research Wizard
, those listed above are the ones I would emphasize.
Want to gain access to the high-performing strategies and screens I
mention in this article? Want to see other stocks those strategies
recommend to buy now? Think you could take your best shot and
create your outperforming strategy?
Starting today, you are invited to do this free of charge. You'll
have 14 days to create, tweak, and backtest your strategies. At the
same time, you can see the latest picks from pre-loaded winning
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Let's make some money!
Kip Robbins is a Quantitative Analyst with Zacks.com. He analyzes
screens and strategies for Zacks customers and for use in
Zacks Research Wizard
which empowers individual investors to use market-beating screens,
build their own, and backtest their results.
CVR ENERGY INC (CVI): Free Stock Analysis
GEORGIA GULF (GGC): Free Stock Analysis Report
LITHIA MOTORS (LAD): Free Stock Analysis Report
LIBBEY INC (LBY): Free Stock Analysis Report
STEWART INFO SV (STC): Free Stock Analysis
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