In my first article for TheStreet back on May 1, I wrote about avoiding widely held stocks, and looking a bit under the radar instead for stocks of today like Dollar Tree (DLTR), Autozone (AZO), Ross Stores (ROST), Monster Beverage (MNST), Tractor Supply (TSCO), and Polaris Industries (PII), etc.
I think that the big wirehouse firms must have a template that they apply to a vast majority of their clients that includes such duds of yesteryear as General Electric (GE), Merck (MRK), Johnson & Johnson, Microsoft (MSFT), AT&T (T), etc., to just name a few. Not that these are not still good companies today, but the stocks have done nothing for years. Take a quick peek at the performance of GE:
Data from Best Stocks Now App Unfortunately, GE is typical of a lot of large widely-held stocks. It has delivered dismal returns to investors over the last decade. I am fully aware that the S&P has not exactly been scorching up the track over the last 10 years, but that has not kept some very good companies from delivering stellar returns to their happy investors.Let's just contrast GE's returns with those of Ross Stores: I wrote about Ross Stores last year.How about the returns of Dollar Tree: I wrote about Dollar Tree last year. I have also owned it for almost two years. I could give many more examples, but I think that you get the idea. Having grown up in San Diego, I remember when Costco (COST) was the hottest retail stock in the market. It was a new concept, people loved it, and the stock soared. I am not saying that Costco is not still one of the great retailers around, I still love to buy my one gallon jug of pepperoncinis there every year when I run out, but the problem is that the company is no longer growing like it once was. When earnings growth slows down, so does stock price appreciation.Consider that GE's earnings have been shrinking by an average of 13% per year over the last five years. The stock has been going down by an average of 9.3% per year. Ross Stores has been growing their earnings at an average rate of 32% per year over the last five years. The stock has been going up by an average of 32.3% per year during that same time period,its investors, funny how that works!
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV