Frankly, such bold calls hinge on the state of the U.S. economy. If the economy appears to be moving onto a higher plane of growth, then investors will reward companies that deliver the most robust growth. But if the economy slumps, then the more stable blue chip companies will likely get rewarded. These are the companies that manage steady (though unspectacular) growth during any economic climate.
Among the 37 stocks, some seemingly deep bargains can be spotted.
For example, Noble Energy (NYSE: NE), Ensco Int'l (NYSE: ESV) and Rowan Cos. (NYSE: RWC) are all expected to meet those growth criteria for 2013 and 2014, and are valued at just seven times projected 2014 profits. But these are highly cyclical businesses and, as such, they will never get a robust price-to-earnings (P/E) ratio anyway.
I've taken the liberty of scrubbing out energy-related cyclical stocks and winnowed the group to just 29 stocks. Even if the economy perks up in 2013, some may remain unconvinced that the U.S. economy can keep growing into 2014, as so many headwinds remain in place. This scenario could spell trouble for companies that didn't show their mettle during the last slowdown. So I've eliminated any company that saw sales fall more than 10% during the Great Recession. This narrowed the list down to 21 stocks...
Today, at 11:20 AM PT: Get the Market Movements in Advance; Williams Edge Webinar for July 31st, 2014 | John Ransom
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