NEW YORK (TheStreet) -- We've all heard of blue-chip stocks, but what about "purple-chip" stocks? John Schwinghamer, author of "Purple Chips," explained the concept to TheStreet's Gregg Greenberg.
Purple-chips, according to Schwinghamer, are the royalty of blue-chip stocks. Based on their increasing and consistent earnings power, they make better investments than your average blue-chip company.
C.H. Robinson (CHRW) was the first on his list. Although the company may not seem very exciting to some, its ability to hold up in a sluggish economy proves valuable.
He explained that during the financial crisis in 2008, the company was able to not only keep earnings per share afloat, but actually increase it through the troubling times.Oracle (ORCL) also made the list, despite its recent earnings hiccups. Despite the short-term turmoil, the company has a long-lasting ability to provide solid earnings results, Schwinghamer said. While we might not see the behind-the-scenes action between merchants and credit-card companies, that doesn't mean there isn't there a business there. That environment is exactly where Global Payments (GPN) thrives, and it should only continue grow as we keep moving towards a cashless society, he added. With the harsh selloff in April, Schwinghamer believes Cognizant Technology Solutions (CTSH) is a buy based on valuation. The company is a consistent earnings grower and when valuations get this low, it usually indicates that all of the bad news is baked in, making upside surprises more likely. When looking for his purple-chip selection, Schwinghamer said he searches for stocks with a market cap of at least $1 billion, seven years of earnings growth, and relatively "predictable" earnings results. -- Written by Bret Kenwell in Petoskey, Mich. Follow @BretKenwell
Select the service that is right for you!COMPARE ALL SERVICES
- $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
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV