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Inside: The names of three big winners from my portfolios!
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Posted on 01/17/2012, 14:18
By Nilus Mattive
Normally, I don't name individual investment recommendations in this column because I don't think it's really fair to my paying Income Superstars subscribers.
However, every once and a while I make an exception — and today is one of those rare occasions. Why?
Because for the last couple weeks I've been telling you a lot about the performance of my portfolios in 2011 ... general trends that should have helped my subscribers handily beat the markets ... and some of the stock sectors that I like for the coming year.
Normally, I don't name individual investment recommendations in this column because I don't think it's really fair to my paying Income Superstars subscribers.
However, every once and a while I make an exception — and today is one of those rare occasions. Why?
Because for the last couple weeks I've been telling you a lot about the performance of my portfolios in 2011 ... general trends that should have helped my subscribers handily beat the markets ... and some of the stock sectors that I like for the coming year.
But I don't think anything can summarize the things I look for in specific investments than the stocks themselves. So today I'm going to tell you about three of the bigger winners from the past year.
I figure my subscribers won't mind since they've already had the chance to make quite a lot of money from these stocks. Besides, I'm only going to talk about three of the household names rather than some of the more off-the-radar plays I'm currently recommending in the newsletter.
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And when you look at the performance numbers I'm about to cite, please remember that the S&P 500 produced ZERO capital appreciation last year.
Now, without further interruption, here's ...
Big Winner #1: Hershey ... up 32% in 2011 NOT including dividends!
There's nothing sweeter than seeing a company based right here in my home state make such a splash in 2011!
That's especially true since so many people have been fretting over the effect that higher commodity prices — particularly sugar and cocoa — might have on this confectionary company.
Yet Hershey has been able to shrug off those concerns, largely because of something that I look for in many of the companies I recommend — a healthy stable of brands.
This is something that especially applies to consumer staples businesses like Hershey. After all, is the average shopper going to switch chocolate bars from a Hershey to a no-name brand over a couple cents? Or more to the point, who will be more likely to pass on higher ingredient costs — someone selling an item with one of the biggest names in the world slapped on its wrapper or a generic product?
This is precisely what has allowed Hershey to keep rising. That and the fact that it sells products most people buy regardless of economic conditions. If anything, candy is a cheap luxury in today's world.
Meanwhile, Hershey has something else I look for in my stocks — a tremendous history of steadily rising dividends. In 2011 alone, the company boosted its payment by 7.8% ... and it has hiked its dividend for a remarkable 39 years straight!
By the way, the company's performance in 2011 was no fluke. Since I initially recommended the shares back in November of 2009, they've produced a total return of 83% while the S&P 500 did just 14.8%!
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Big Winner #2: Consolidated Edison ... up 25% in 2011 NOT including dividends!
I just love when people call utilities boring, old fashioned, or stocks for widows and orphans.
I mean, do YOU consider a one-year capital gain of 25% to be boring? And how about another 4% in dividends on top of that?
Heck, I made two separate recommendations to buy this company — one back in August of 2007 and another in December of 2008 — and since then, the shares of this New York power company have handed out total returns of 56.6% and 78.9%, respectively!
Meanwhile, the S&P 500 has LOST 14% in the first instance and done about half as well in the second.
It's no secret why. Again, Consolidated Edison provides a basic service that pretty much everyone in the country uses.
More importantly, it has a virtual monopoly on one of the richest markets in the U.S. — the greater New York metro area.
Add to that a favorable interest rate environment, solid financials, and a terrific dividend history and this kind of investment is an obvious winner. Yet interestingly enough, it's ignored by most people.
That's just fine with me. Let everyone else call our stocks boring ... we'll continue laughing all the way to the bank.
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Big Winner #3: Philip Morris International ... up 34% in 2011 NOT including dividends!
Look, I know that some people have a problem with the tobacco business. And if you're one of them, that's fine ... companies like Philip Morris International aren't for you.
However, as an investor, there's no denying that big tobacco can produce big profits.
Just look at this company's performance in 2011.
I sound like a broken record but once again it's all about big brands, products that people buy consistently, and a solid dividend history.
This firm, which was spun off from Altria's domestic business, also benefits from another important trend you should pay attention to — strong demand from foreign markets.
In addition, it can also get a boost from currency moves since its business is conducted around the world.
Like Con Ed, I've recommended these shares two different times, and the results have been darn solid — with total returns of 69.9% since March 2008 and 106.7% since January 2009!
Of course, not every stock I've recommended has done as well as the three I just talked about.
But I have to say that we had plenty of other winners last year, too.
And I believe you can do just as well looking for similar themes and characteristics in the investments you buy this year, too.
Also, if you'd like to learn about all the rest of my current recommendations, and get all my future picks, I encourage you to take a risk-free trial to my Income Superstars letter right now. At $39 for a full year, it may be the very best investment you make in 2012.
Best wishes,
Nilus
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