Ten Stocks for the Next 10 years

Recently MoneySense magazine of Canada published the ten best stocks to buy and hold for the next 10 years. The stocks selected are listed below:

Boeing (BA)
Cemex (CX)
Ebay (EBAY)
Fairfax Financial (FFX)
Leucadia National
Microsoft (MSFT)
Service Corp
Transcanada (TRP)
Walmart (WMT)

Of the ten stocks above, majority of them are U.S. companies. Ebay and Microsoft are tech companies whose glorious days are long over. They are definitely note long-term investment picks.Microsoft would have been a great pick in the late 80s when it went went public. After the dot com bubble collapse, other than a handful of tech outfits such as Apple (APPL) most are out of favor of investors.Microsoft is yet to come up with a quality product after Windows and many of the newer versions have not been successful. They lost the search engine wars and now they have are trying hard to beat Google (GOOG) with their Bing search engine. Despite having billions in cash, Microsoft still does not pay a decent dividend. Many investors question the logic behind hoarding huge sums of cash when it can’t be put into use in R&D to develop useful products.

Ebay is also not a long-term pick by any means. Their business model is broken and does not work anymore.  Buyers and sellers are getting frustrated and are leaving in droves to other sites. Another reason that Ebay stock is not a good investment now because in the current economy most folks are not looking to spend money to buy unwanted stuff. The American consumer is in belt tightening mode and hence retailers and e-tailers are better to be avoided.

Boeing, Walmart and Johnson & Johnson are great to hold long-term. Johnson & Johnson is a solid company capable of riding out any storm. Boeing operates in a highly niche category and has exposure to both civilian and defense sectors. Thought Walmart’s fantastic growth days are over, it is still a good buy since the company has an unique business model and is the favored destination for millions of shoppers. In the current recessions, cash-strapped consumers head to Walmart for unbeatable prices. Walmart also has a strong global presence in many countries such as Mexico, China,U.K., etc. which helps to smooth out earnings even if the U.S. economy continues to be in doldrums.

The only Mexican company in the list Cemex (CX) is in the cement industry with operations in many countries. Cemex does not pay dividends.

Fairfax Financial Holdings Ltd(FFH) is a Canadian property and casualty insurance and reinsurance and investment management company. The current yield is 2.83%. Transcanada (TRP) is a large Canada-based energy pipeline operator. Last year TransCanada has $8.2B revenues. TRP is probably is a good long-term pick since its pipelines are used by oil companies to transport oil across North America. Leucadia National and Service Corp are Canadian companies that do not trade in the U.S. markets.

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