BOSTON (TheStreet) -- IBM (IBM), Johnson & Johnson (JNJ) and Wal-Mart (WMT) are among premium stocks languishing in the bargain bin, says Hank Smith, chief investment officer of Haverford Investments.
But not for long, he says.
Quality companies -- those with sound businesses, long track records, competent management and large dividends -- typically sell for a premium, whether in the stock market or the supermarket. Investors have fancied small-cap stocks, as well as sectors including technology and commodities, leaving blue chips by the wayside.
Smith says his strategy has collected a group of six value stocks make up what he affectionately calls a "six-pack," offering a different type of flavor for investors than a six-pack of beer."The concept is that the U.S. large-cap quality space has been more or less ignored for the past 10 years," Smith says. "There were many years when the space was a relative underperformer, but business fundamentals have not underperformed. So you look at companies where you've seen tremendous growth of earnings in the neighborhood of 170% to 300% with very similar dividend growth."
|Hank Smith, chief investment officer of Haverford Investments|
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