This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

The 50 Best Stocks in the World

Second, though cash flow counts more than ever, since finding a new blockbuster drug is more expensive and seems harder and riskier than a decade ago, the competitive advantage provided by Pfizer's industry-leading sales force has slipped behind the advantage it would have if it ran the industry's best research-and-development lab.

The key test facing any drug company for the next decade is developing (and/or buying) enough drugs to:

  • Make up for any patents expiring.
  • Keep the sales force busy.
  • Push up revenue and earnings by the kind of 10% growth that investors in drug stocks still look for.

On its record, Pfizer hasn't been particularly good at turning big research-and-development spending into new drugs. Merck (MRK - Get Report) used to be the industry's best at research and development, but it has stumbled recently. The crown in that area has passed to Gilead Sciences (GILD - Get Report), which holds a virtual HIV drug franchise and developed cash cow Tamiflu with Roche Holding. Gilead is also on the verge of adding drugs for hypertension and hepatitis that would significantly broaden the company's product line.

By the way, Gilead is no sluggard when it comes to cash flow either, generating $1 billion in the first half of 2007.

On the basis of those competitive advantages, I'm adding Gilead to this year's 50 Best list and dropping Pfizer.

Four More Drops

The same kind of analysis is behind my four other drops this year:

  • Duke Energy(DUK - Get Report). The competitive advantage in the utility industry has shifted to companies with big unregulated power-generation businesses that emphasize nuclear and alternative technologies, such as wind power.
  • FedEx(FDX - Get Report). Global competitors such as United Parcel Service(UPS) have caught up with FedEx, and smaller niche competitors have taken a leaf from the company's book by adding technology to match its logistics capacity.
  • Southwest Airlines(LUV - Get Report). The low-cost, short-haul model that Southwest pioneered has been adopted so widely that it's not enough of a competitive advantage to justify keeping the stock in this portfolio.
  • Walgreen(WAG). In response to fierce competition, the company has moved away from its core competency of running the best drugstores in the best locations to pursue a strategy built on acquisitions in the pharmacy-services sector.

Five to Add

To balance these five drops, I'm adding Gilead Sciences, as noted above, and:

  • Accor, the leader in the international budget-hotel segment.
  • EMC(EMC - Get Report), the best in the storage industry at integrating hardware and software.
  • FPL Group(FPL), the leader in the unregulated business of generating electricity from wind in the U.S.
  • Nvidia(NVDA - Get Report), the last independent graphics-processor company standing.

When I give this list its annual update and revise sporadically during the year, I designate up to 10 stocks that are attractively priced for purchase. As of today, I've got seven stocks that I'd give a buy rating: Accor, Corning (GLW - Get Report), FPL, Genetech (DNA), Gilead Sciences, Texas Instruments (TXN - Get Report) and Whole Foods Markets (WFMI).

Below is the complete list of the 50 Best Stocks in the World:

Adobe Systems
General Cable
News Corp.
American Express
Taiwan Semiconductor
Texas Instruments
Applied Materials
FPL Group
Procter & Gamble
Valero Energy
Johnson & Johnson
Gilead Sciences
Rio Tinto
Washington Post
Exxon Mobil
Smithfield Foods
Whole Foods

At the time of publication, Jim Jubak owned or controlled shares of Corning. He did not own short positions in any stock mentioned in this column.

Jim Jubak is senior markets editor for MSN Money. He is a former senior financial editor at Worth magazine and editor of Venture magazine. Jubak was a Bagehot Business Journalism Fellow at Columbia University and has written two books: "The Worth Guide to Electronic Investing" and "In the Image of the Brain: Breaking the Barrier Between the Human Mind and Intelligent Machines." As an investor, he says he believes the conventional wisdom is always wrong -- but that he will nonetheless go with the herd if he believes there's a profit to be made. He lives in New York. While Jubak cannot provide personalized investment advice or recommendations, he appreciates your feedback; click here to send him an email.
4 of 4

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
EMC $25.93 -0.99%
DUK $77.84 -0.64%
FDX $164.42 -0.75%
GLW $18.56 -1.70%
GILD $88.60 -8.70%


Chart of I:DJI
DOW 17,701.15 -129.61 -0.73%
S&P 500 2,059.10 -16.71 -0.81%
NASDAQ 4,768.6640 -36.6270 -0.76%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs