So this year I'm adding four energy stocks to this list of future blue chips: fuel-cell producer FuelCell Energy ( FCEL), ceramic proppant maker Carbo Ceramics ( CRR), sour-crude refining specialist Valero Energy ( VLO) and aircraft and maritime fuel logistics manager World Fuel Services ( INT). And I'm adding three security stocks to the Future 50: provider of identity verification services ChoicePoint ( CPS), network access and identification security software company Netegrity ( NETE) and high-tech defense firm L-3 Communications ( LLL).
The Dearly Departed
Four companies have graduated from the Future 50 this year to the 50 Best Stocks in the World portfolio, opening up slots for four of the seven new future blue chips. The graduates are biotechs Amgen ( AMGN) and Genentech ( DNA), communications-chip leader Broadcom ( BRCM) and the Big Hog of the pork market, Smithfield Foods ( SFD). Three stocks also drop off the Future 50 this year. I didn't drop stocks from the list because they produced big losses in the last year or even the last few years. Otherwise, stocks like JDS Uniphase ( JDSU) and Taiwan Semiconductor ( TSM) would be long gone. But that would take stocks that dominate their sectors off the list just because those sectors are in the market's doghouse at the moment. Patience and then more patience is sometimes the best approach to these future blue chips. But not always. When a company loses the competitive edge that put it on the list in the first place, it should get the boot. So this year I'm dropping Atlantic Coast Airlines ( ACAI) because the company is making the transition from a regional to a low-cost carrier. That change pretty much eliminates the competitive advantages that put Atlantic Coast Airlines on the Future 50 to begin with.