Guest post by cbus20122
You may notice how companies like Nvidia, Square, Starbucks, etc get talked about almost ad nauseam on here. Some for good reason, but there is a very obvious bias towards companies that people regularly interact with, which probably leads people to overlooking some really great companies. It also leads to the effect of retail investors piling into hype stocks based on what they interact with, often with complete ignorance of the company’s profitability and valuation. Here are some of my picks, but there are clearly WAY more out there. BTW, I’m sure there are quite a few on here who know of these companies, but they’re not the type that gets constant attention on here.
$SPGI – S&P Global: You know the standard and poor’s ratings? They’re the global ratings and analytics agency that is behind the S&P index among many others. They’re a fantastic company that is the largest of a 3 company oligopoly of Moody’s and the privately traded fitch. I encourage people to do a simple backtest of these ratings agencies over the past few decades, and you’ll be pretty damn impressed when comparing them against almost any other company. SPGI specifically has streamlined their business, and makes commissions off all the ETF’s that use the S&P indexes, which is a pretty awesome place to be with the popularity of passive investing. Their P/E has gotten a little high recently, but they have constantly beaten projections on revenue and growth, and have a pretty incredible track record overall.
$MAIN – Main Street Capital: Most Business Development Companies tend to be shoddy investments for investors hunting for more yield (in my opinion). Main is the exception to that rule, at least on the whole, and their quality has exceptional. They offer a monthly dividend, which as of 2 months ago was pushing a 6% yield. Despite this, they have grown their dividend significantly over the past 10 years, and their risk management is far better than just about any other business development company. Their drawdown during the great financial crisis was only about 30%. Also, if you want, do a backtest of holding Main vs. almost any non-amazon, non-netflix stock. Very very few companies have managed a better track record since 2008, and even giants like Apple and Google have lagged behind Main’s results over the long-term.
$TSM – Taiwan Semiconductor: People are obsessed here with NVDA and AMD. But why? Not to say they aren’t doing great things, but if you look at the fundamentals of each company, TSMC is much better valued, and also has a great growth track record to back the valuation up. Beyond this, they have a wonderful moat unlike some other lower p/e semiconductors. This isn’t to say that other semi’s don’t deserve attention, but TSMC is ridiculously overlooked given how large and important they are in the semi world.
$NDAQ – Nasdaq INC: Everyone knows what Nasdaq is, yet investing in the organization gets very little attention. As of right now, their fundamentals are great compared to the rest of the market, and their lack of volatility since 2011 is almost astounding. Do yourself a favor and open up a chart of the company and marvel at how linear the chart is… Also, I think it’s safe to say they have one of the biggest moats out there. Clearly nothing is going to be replacing Nasdaq any time soon. Additionally, outside NDAQ, other indexes like CBOE, MKTX, etc are almost never discussed on here despite being great investments in my opinion.
Some other assorted companies that deserve more discussion in my opinion…
- $MKSI
- $NEE
- $STMP
- $NVO
- $IRDM
- $ENB
- $MPW
- $DEA
Disclaimer: Consult your financial professional before making any investment decision.