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Welcome to Episode #46 of the Value Investor Podcast
Every week, Tracey Ryniec, the editor of Zacks Value Investor portfolio service, shares some of her top value investing tips and stock picks.
Recently, the Chicago Tribunewrote about 98-year-old Russ Gremel, a Chicago attorney who had donated $2 million to the Illinois Audubon Society.
The catch?
He obtained the money by investing $1,000 in Walgreens stock 70 years ago.
Mr. Gremel may be one of the greatest “buy and hold” investors of all time.
The average length of time most investors hold onto a stock or a mutual fund is just 3 years. If you’ve even held a decade, that is considered a long-term shareholder.
He held through the super bear market of the 1970s, the 1980s-90s mega-bull and then the recent Great Recession sell off. That takes a lot of guts.
Luck or Skill?
Mr. Gremel’s story is a feel-good story because the investment turned out well. Walgreens is still in business all these years later, when many of its peers are not.
Additionally, according to YahooFinance, the stock is up over 8,000% since 1985.
Was Mr. Gremel a good investor, or did he just get lucky when he chose Walgreens?
Luck does play a part in investing, of course. But for every Walgreens there is a Montgomery Wards. That’s why you should keep a diverse portfolio. Holding onto just one stock for 70 years would be considered a risky strategy.
Can You Buy and Hold a Stock for Forever?
Like any stock investment, you should always be evaluating your companies no matter how long you intend to hold them.
Use the Zacks Rank to look for rising earnings estimates. Check to make sure earnings are growing. Listen to conference calls and stay up-to-date on company news.
Businesses change. Just ask Kodak and Sears.
Don’t get caught unaware.
5 Companies That Fit the Buy and Hold Criteria
Tracey did a screen for Zacks Rank #1 (Strong Buy), #2 (Buy) and #3 (Hold) stocks with P/Es under 18. She also sought EPS growth of at least 10% and a dividend over 1%.
Dividends are a key component to buy and hold because, if they’re re-invested, they compound.
1. Tyson Foods (TSN - Free Report) is one of the largest beef, pork and poultry producers in America. It trades with a forward P/E of just 12.2 and is expected to grow earnings by 14% this year.
2. Thor Industries (THO - Free Report) just had a record third quarter as RV sales were up 56.9%. Earnings are expected to jump 33% this year.
3. Nasdaq (NDAQ - Free Report) just increased its quarterly dividend by 19%. It yields 1.8%. Earnings are expected to rise 11.8% in 2017.
4. MetLife (MET - Free Report) was founded in 1868 yet it’s still expected to grow earnings by 16.5% this year. It’s cheap, with a forward P/E of just 9.9 and it pays a dividend yielding 3%.
5. Celanese (CE - Free Report) is over 100 years old but is expected to grow earnings by 10.5% this year. The specialty chemical maker has a forward P/E of just 12.3.
If you’re going to buy and hold, buy companies in the basics like the examples above: food, insurance, chemicals, finance.
And remember, past performance is no guarantee of future results.
What else should you know about the buy and hold strategy?
Find out all the secrets on this week’s podcast.
Want more value investing insights from Tracey?
Value investors are a special breed of investor. They don’t follow the herd.
If that is your style of investing, be sure to check out Tracey’s weekly Value Investor service to receive more in-depth analysis on value companies and see which stocks she thinks are the best bargains now.
The Value Investor portfolio holds between 20 and 25 value stocks for the long haul.
Image: Bigstock
The Greatest Buy and Hold Stock Investor of All Time
Welcome to Episode #46 of the Value Investor Podcast
Every week, Tracey Ryniec, the editor of Zacks Value Investor portfolio service, shares some of her top value investing tips and stock picks.
Recently, the Chicago Tribunewrote about 98-year-old Russ Gremel, a Chicago attorney who had donated $2 million to the Illinois Audubon Society.
The catch?
He obtained the money by investing $1,000 in Walgreens stock 70 years ago.
Mr. Gremel may be one of the greatest “buy and hold” investors of all time.
The average length of time most investors hold onto a stock or a mutual fund is just 3 years. If you’ve even held a decade, that is considered a long-term shareholder.
He held through the super bear market of the 1970s, the 1980s-90s mega-bull and then the recent Great Recession sell off. That takes a lot of guts.
Luck or Skill?
Mr. Gremel’s story is a feel-good story because the investment turned out well. Walgreens is still in business all these years later, when many of its peers are not.
Additionally, according to YahooFinance, the stock is up over 8,000% since 1985.
Was Mr. Gremel a good investor, or did he just get lucky when he chose Walgreens?
Luck does play a part in investing, of course. But for every Walgreens there is a Montgomery Wards. That’s why you should keep a diverse portfolio. Holding onto just one stock for 70 years would be considered a risky strategy.
Can You Buy and Hold a Stock for Forever?
Like any stock investment, you should always be evaluating your companies no matter how long you intend to hold them.
Use the Zacks Rank to look for rising earnings estimates. Check to make sure earnings are growing. Listen to conference calls and stay up-to-date on company news.
Businesses change. Just ask Kodak and Sears.
Don’t get caught unaware.
5 Companies That Fit the Buy and Hold Criteria
Tracey did a screen for Zacks Rank #1 (Strong Buy), #2 (Buy) and #3 (Hold) stocks with P/Es under 18. She also sought EPS growth of at least 10% and a dividend over 1%.
Dividends are a key component to buy and hold because, if they’re re-invested, they compound.
1. Tyson Foods (TSN - Free Report) is one of the largest beef, pork and poultry producers in America. It trades with a forward P/E of just 12.2 and is expected to grow earnings by 14% this year.
2. Thor Industries (THO - Free Report) just had a record third quarter as RV sales were up 56.9%. Earnings are expected to jump 33% this year.
3. Nasdaq (NDAQ - Free Report) just increased its quarterly dividend by 19%. It yields 1.8%. Earnings are expected to rise 11.8% in 2017.
4. MetLife (MET - Free Report) was founded in 1868 yet it’s still expected to grow earnings by 16.5% this year. It’s cheap, with a forward P/E of just 9.9 and it pays a dividend yielding 3%.
5. Celanese (CE - Free Report) is over 100 years old but is expected to grow earnings by 10.5% this year. The specialty chemical maker has a forward P/E of just 12.3.
If you’re going to buy and hold, buy companies in the basics like the examples above: food, insurance, chemicals, finance.
And remember, past performance is no guarantee of future results.
What else should you know about the buy and hold strategy?
Find out all the secrets on this week’s podcast.
Want more value investing insights from Tracey?
Value investors are a special breed of investor. They don’t follow the herd.
If that is your style of investing, be sure to check out Tracey’s weekly Value Investor service to receive more in-depth analysis on value companies and see which stocks she thinks are the best bargains now.
The Value Investor portfolio holds between 20 and 25 value stocks for the long haul.
Click here to learn more>>>