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

5 Stocks to Store Away for 5 Years

NEW YORK ( TheStreet) -- They say one person's trash is another person's treasure. (Or, as Warren Buffett likes to say, be greedy while others are fearful.) So in my bargain hunting mode, I have started to look for a few names that have become significantly discounted from their true potential. Not only do these companies offer considerable amount of value, but they present excellent margins of safety while offering excellent yields.

In search of these companies, I am not necessarily looking for immediate growth but rather long-term, sustainable value over a five-year period. The names that qualify are two chip giants in Intel (INTC - Get Report) and Qualcomm (QCOM - Get Report), software giant Microsoft (MSFT - Get Report) as well as two undervalued tech players in Cisco (CSCO - Get Report) and Hewlett-Packard (HPQ - Get Report) -- both on the verge of a resurgence.

In fact, let's discuss them first.

It's without question HP and Cisco are the clear front-runners within segments such as routing and switching, but they are also well positioned for markets such as the cloud that is soon to emerge and dominate consumer and corporate enterprises. This makes the companies excellent buys.

It seems, however, that Wall Street wants to cast them by the wayside because "growth" is not something either offers in sufficient quantities at this stage of their maturation -- even though Cisco continues to churn out one excellent quarter after another while maintaining margins leading the industry by almost 50%.

HP recently reported better-than-expected earnings results (beating analysts' estimates on top and bottom lines), prompting many naysayers to affirm that Meg Whitman was indeed the right person for the job.

The company has started to combine its PC and printing divisions and recently confirmed it will begin eliminating 27,000 jobs in a cost-saving measure of as much as $3 billion to $3.5 billion by 2014. So clearly it is committed not only to being more efficient, but returning value to shareholders. What's more, HP will stand to benefit immensely by any success gained from another company I'm looking to add: Microsoft, which is due to release its Windows 8 operating system.

Windows 8 could add $8 to Microsoft's share price, reigniting the magic of the PC era. As it stands, it supports the idea that Intel and Microsoft have become significantly discounted to their long-term potential.

The two were joined at the hip at the height of the PC era. If not for Intel and its powerful processors, Windows would not have been the same dominant force. But we are in a new era, one in which mobile devices rule, led by Apple (AAPL) and Google (GOOG). This has spurred the rise of Qualcomm, while Intel has been somewhat forgotten.

There is room for both.

As bullish as I am on Intel, Qualcomm presents value at current levels -- particularly having fallen 20% due to less-than-stellar earnings -- and continues to affirm why I think it has one of the best businesses operating in a fast-growing industry.

In its most recent conference call, it was clear management has a firm handle on what it needs to do to mitigate the supply chain issue scaring investors. I fully expect the concern to be resolved by at least the end of the third quarter.

There are myriad reasons why these companies get overlooked when discussing the best value plays on the market. Apple is trading well over $600 per share, with recent targets calling for $1,200, but many are quick to forget that five years ago the stock was just over $100 per share. Likewise, each of these companies has the potential to do something remarkable. All they need is a little more time.

Five years should be enough.

At the time of publication, the author was long AAPL and held no position in any of the stocks mentioned.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.
Richard Saintvilus is a private investor with an information technology and engineering background and has been investing and trading for over 15 years. He employs conservative strategies in assessing equities and appraising value while minimizing downside risk. His decisions are based in part on management, growth prospects, return on equity and price-to-earnings as well as macroeconomic factors. He is an investor who seeks opportunities whether on the long or short side and believes in changing positions as information changes.

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
CSCO $26.21 -0.87%
INTC $29.90 0.17%
HPQ $11.45 -1.21%
MSFT $49.94 0.14%
QCOM $51.13 1.27%


Chart of I:DJI
DOW 17,660.71 +9.45 0.05%
S&P 500 2,050.63 -0.49 -0.02%
NASDAQ 4,717.0940 -8.5450 -0.18%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs