Commentary > Sivy on Stocks
Picks and strategies
The latest from Sivy on Stocks
Sivy on Stocks

If there is any way to beat the market over the long run, it consists of following the strongest, most secure stocks and trying to scoop them up when they are measurably undervalued.

There are surprisingly few such stocks that you need to follow on an on-going basis -- we've come up 70, which you can track in the table below.

What are the defining characteristics of these great growth stocks? Size is certainly part of it, and almost all of the stocks on the core list have market capitalizations and total revenues that top $5 billion a year.

We also looked for companies with diverse product lines and dominant positions in their industries.

As for growth, we sought companies that are capable of returning a steady 11 percent to 12 percent a year through a combination of earnings gains and yield.

For more on how we picked the stocks and guidance on when to buy, click here for my feature from the December issue of Money magazine.

In addition, I'll be regularly revisiting these stocks every Monday and Thursday in the Sivy on Stocks column on CNN/Money.

Last updated Mon May 17,2004 16:02
Company
(Ticker
symbol)
Current
share
price
52-wk
high
52-wk
low
Proj.
P/E
Proj.
5-year
growth
PEG
ratio
Comments
Time Warner (TWX) $16.27 $19.30 $13.42 27 12.9% 2.1 Diverse collection of media assets still depressed by merger with AOL
Limited Brands (LTD) $19.27 $21.65 $13.00 14 13.3% 1.1 Retailer owns chains such as Victoria's Secret and Bath & Body Works
Applied Materials (AMAT) $18.54 $25.94 $13.49 23 20.0% 1.2 World's dominant producer of computer chipmaking equipment
Staples (SPLS) $24.52 $27.87 $17.87 18 16.8% 1.1 Office-supplies retailer tracks the level of general business activity
Disney (DIS) $22.80 $28.41 $17.45 23 15.0% 1.6 Awaiting advertising recovery at ABC and upturn at theme parks
Cisco Systems (CSCO) $20.95 $29.39 $15.46 28 15.0% 1.9 Leading maker of routers for the Internet is posting very strong sales
MBNA (KRB) $23.44 $29.68 $18.61 11 13.3% 0.8 Leading issuer of credit cards and a beneficiary of consumer spending
Microsoft (MSFT) $25.59 $30.00 $23.59 20 10.0% 2.0 Still the premier software company for PCs, with $50 billion in cash
Texas Instruments (TXN) $24.93 $33.98 $17.21 23 20.0% 1.2 Top maker of digital signal processors used in communications
General Electric (GE) $29.93 $34.57 $26.90 19 10.0% 1.9 Former stellar conglomerate now trading at very low price
Intel (INTC) $26.93 $34.60 $18.51 22 15.0% 1.5 Dominates production of microprocessors, with new chips on the way
Baxter International (BAX) $31.71 $34.70 $22.15 17 11.0% 1.6 Niche medical businessesódrug delivery, blood collection and dialysis
Dell (DELL) $34.20 $37.18 $29.23 27 15.0% 1.8 Low-cost PC maker diversifying into other areas of electronics
Walgreen (WAG) $33.48 $37.42 $28.80 25 15.0% 1.7 Leading drugstore chain posting exceptional gains in same-store sales
Home Depot (HD) $33.36 $37.89 $27.85 15 12.5% 1.3 Do-it-yourselfers encouraged by strong housing sales and refinancings
Pfizer (PFE) $35.43 $38.89 $29.43 16 13.5% 1.2 Largest drugmaker with enormously powerful R&D capabilities
Alcoa (AA) $28.68 $39.44 $21.83 14 13.6% 1.1 Biggest U.S. aluminum producer, with growth-stock earnings potential
Sysco (SYY) $37.89 $41.27 $28.54 27 15.0% 1.8 Largest U.S. distributor of food to restaurants and institutions
Aflac (AFL) $39.16 $42.60 $29.83 17 15.0% 1.1 Life insurer suffering from recession-induced sluggishness in sales
InterActiveCorp (IACI) $28.86 $42.88 $27.46 31 24.1% 1.3 Barry Diller's extraordinary collection of Internet businesses that turn in consistent profits
J.P. Morgan Chase (JPM) $35.22 $43.84 $25.26 10 10.0% 1.1 Second-largest U.S. bank is nine months into turnaround
ExxonMobil (XOM) $43.08 $44.24 $34.90 15 9.0% 1.8 International integrated oil giant is key hedge against inflation
Boeing (BA) $42.70 $45.10 $28.55 19 10.0% 1.9 Largest U.S. maker of commercial airplanes is awaiting industry upturn
Boston Scientific (BSX) $39.51 $46.10 $23.51 22 20.0% 1.1 Maker of less-invasive medical devices for heart and digestive tract
DuPont (DD) $41.13 $46.25 $38.60 17 10.0% 1.8 Largest U.S. chemical company offering above-average dividend yield
First Data (FDC) $41.73 $46.80 $33.26 19 15.0% 1.3 Provider of services for money-transfer and credit-card transactions
Target (TGT) $42.41 $46.81 $32.56 18 15.0% 1.2 The upscale discounter's sales are running a bit below expectations
Washington Mutual (WM) $38.84 $46.85 $36.83 9 11.0% 0.8 Rapidly expanding Seattle-based lender, trading at a bargain P/E
Abbott Laboratories (ABT) $41.03 $47.25 $37.65 17 12.0% 1.5 Diverse health-care products and a promising pipeline of new drugs
Clear Channel Comm (CCU) $39.22 $47.76 $36.36 27 18.0% 1.5 Leading radio-station operator awaits advertising upturn
Viacom B (VIA.B) $37.66 $49.75 $35.62 N/A N/A% N/A Entertainment giant with strong franchises such as VH1 and MTV
Wyeth (WYE) $37.87 $49.95 $36.62 14 10.0% 1.4 Strong pharmaceutical pipeline still eclipsed by liabilities from diet drugs
Citigroup (C) $44.93 $52.88 $38.09 11 12.0% 0.9 Largest and best-diversified U.S. financial services company
Tribune (TRB) $46.53 $53.00 $44.28 19 12.0% 1.7 Newspaper publisher is a nearly pure play on an upturn in advertising
Coca-Cola (KO) $49.83 $53.50 $42.28 23 10.0% 2.3 One of the world's most recognized brands is still expanding globally
Anheuser-Busch (BUD) $51.68 $54.10 $48.51 18 11.0% 1.7 World's largest brewer produces half of the beer consumed in the U.S.
American Express (AXP) $48.55 $54.99 $39.15 18 13.0% 1.4 Record billings and membership growth hinge on consumer spending
PepsiCo (PEP) $53.50 $55.48 $42.38 23 11.0% 2.1 Pepsi, snack foods and a lower valuation than Coca-Cola carries
Johnson & Johnson (JNJ) $54.72 $56.39 $48.05 18 13.0% 1.4 Best-diversified health-care company with superbly consistent track record
Anadarko Petroleum (APC) $55.40 $57.03 $40.27 10 9.0% 1.2 Leading exploration and production company for natural gas
Harley-Davidson (HDI) $54.63 $59.86 $38.06 19 15.5% 1.2 Leading U.S. maker of motorcycles with fantastically loyal customers
Lowe's (LOW) $49.75 $60.42 $38.20 18 17.5% 1.1 Smaller, cheaper rival of Home Depot looks to state of housing market
Colgate-Palmolive (CL) $56.17 $60.99 $48.56 21 11.0% 1.9 Maker of toothpaste, soap and laundry detergent appears undervalued
Wal-Mart Stores (WMT) $54.70 $61.31 $50.50 23 14.0% 1.6 World's largest retailer enjoying surprisingly strong sales gains
Johnson Controls (JCI) $52.00 $62.32 $39.91 12 13.5% 0.9 Control systems and auto parts largely reflect state of auto business
Best Buy (BBY) $49.83 $62.70 $33.81 17 15.0% 1.2 Consumer-electronics retailer anticipates a cheery holiday season
Merrill Lynch (MER) $54.30 $64.89 $40.17 11 12.0% 1.0 After three years of job cuts, leading full-service firm is hiring brokers
Schlumberger (SLB) $57.20 $66.75 $44.50 28 15.0% 1.9 Oil service company especially sensitive to new oil exploration
Genentech (DNA) $60.04 $68.25 $24.50 38 25.0% 1.5 Original biotech company now boasts 11 successful products
UnitedHealth Group (UNH) $62.49 $68.50 $46.85 16 17.0% 1.0 Health insurer's acquisition of Mid-Atlantic allows for cost cutting
Union Pacific (UNP) $56.59 $69.56 $55.81 13 10.0% 1.4 Largest U.S. railroad, tied to freight traffic and trading, at a bargain P/E
Amgen (AMGN) $56.39 $72.37 $55.80 23 21.0% 1.1 Former biotech diversifying beyond two blockbuster products
ConocoPhillips (COP) $73.45 $75.56 $51.29 10 8.0% 1.3 Cheaper alternative to ExxonMobil as a hedge against inflation
Lilly (LLY) $72.76 $76.95 $56.51 25 14.0% 1.8 Top drugmaker is ready to launch several promising new products
American Intl. Group (AIG) $69.43 $77.36 $54.20 15 15.0% 1.0 World's largest insurer is benefiting from a surge in premium rates
FedEx (FDX) $70.44 $78.05 $59.01 20 15.0% 1.4 Overnight shipper by air and ground tracks overall business activity
Nike B (NKE) $65.90 $78.56 $49.60 18 13.4% 1.4 World's largest footwear maker feels the swoosh of recovery
Fortune Brands (FO) $72.39 $80.50 $48.34 16 12.0% 1.3 Superb collection of consumer brands from golf balls to bourbon
Bank of America (BAC) $79.81 $84.90 $72.04 10 10.0% 1.1 Acquisition of FleetBoston helps consumer business, and stock is cheap
3M (MMM) $82.94 $88.70 $61.25 22 12.0% 1.9 The maker of Scotch tape is seeing sales gains for many products
Omnicom Group (OMC) $78.61 $88.82 $63.42 20 12.5% 1.6 World's largest ad company posts earnings gains on better ad market
Illinois Tool Works (ITW) $84.59 $89.40 $60.94 19 14.0% 1.4 Maker of fasteners and construction items benefiting from recovery
Hershey Foods (HSY) $88.95 $90.37 $67.04 22 10.0% 2.2 Brand extensions and cost cutting wring higher profits from chocolate
Gannett (GCI) $86.27 $91.38 $73.54 17 10.0% 1.7 Publisher of USA Today and 100 other newspapers tracks advertising
Aetna (AET) $79.29 $95.09 $52.60 11 15.0% 0.8 Health insurer recovering from business lost because of corporate layoffs
General Dynamics (GD) $94.37 $97.00 $62.28 16 12.0% 1.4 Diversified defense company making aircraft, ships and subs
United Technologies (UTX) $82.04 $97.84 $64.93 15 10.0% 1.6 Conglomerate looking for upturn in its aerospace markets
IBM (IBM) $85.35 $100.43 $78.73 17 10.0% 1.7 Diverse computer giant looks for upturn in corporate IT spending
Northrop Grumman (NOC) $98.83 $105.16 $82.92 16 10.0% 1.7 Maker of stealth bomber expects visible earnings gains in 2004
Procter & Gamble (PG) $106.21 $108.85 $86.51 22 11.0% 2.1 Superb collection of widely recognized consumer brands
Projected P/E based on earnings estimates for this fiscal year. Growth based on earnings projections for the next five years.
Source: Thomson/First Call



Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.
Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.