Thursday, August 4, 2011

3 Bulletproof Blue-chip Stocks

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tdp2664 InvestorPlace In times of uncertainty, I always fall back on my tried-and-true system for picking stocks. Over the decades of being in this business, my Portfolio Grader never has let me down. Now with stocks down seemingly every day, we need to focus on the best of the best. If you want to make money in this market, owning my “A”-rated stocks can help you navigate this difficult market. The basics of my fundamental grading system focus on earnings growth, sales growth, margins and buying pressure or quantitative pressure. Growing companies are companies that are healthy and thriving. They have smart leaders who know how to run and manage a smart business. If a company is struggling to sell its products or is spending more than it makes, it's not a company you want to own for growth. Buying pressure deals with market dynamics. It is the measure of money that is buying or selling a stock. The more money that floods into a stock, the more momentum a stock has to rise. Given that owning a stock that goes up is good, these stocks on the move give us the best chance to make money in the market. Even during this recent sell-off, there are stocks that can and do move significantly higher. Case in point: Green Mountain Coffee. That fast-growing company with a rapidly appreciating stock jumped more than 30% last week after reporting earnings results that blew away even the most optimistic Wall Street estimates. Other examples include Apple and Google. As I look at my Portfolio Grader today, there are three bulletproof blue-chip stocks that merit our attention. All three stocks received the desired “A” grade in both fundamental and quantitative measures. You can buy these three stocks with comfort, knowing my system has a proven track record of picking winners. Here are more details on these three bulletproof blue chips: BT Group BT Group (NYSE: BT ), a British technology blue chip, provides telecom services across the globe. The company has been one of the rare shining stars in the messy debt crisis in Europe. Shares of the company are up a solid 13% this year at a time when the market is flat. The appreciation is not of the crazy, nosebleed valuation kind. It is steady and reliable, and it can be bought today at reasonable prices. Given the explosion of personal handheld computing devices or smartphones, BT Group has plenty of room to grow further. The average Wall Street estimate is for the company to make a profit of $3.64 per share in the fiscal year ending March 31, 2012. In the following year, that number increases by 6% to $3.87 per share. At current prices, investors can buy this growing blue-chip stock for nine times current year estimates. In addition to the cheap valuation, investors get paid to watch this stock grow. The company pays a dividend yield of nearly 5%. The ingredients are in place for investors to make money in this bulletproof blue-chip stock. The Portfolio Grader rates the company an “A.”



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