Solid stocks - Try out of favor sectors that aren't liked.
Currently, those sectors inlcude energy and metal mining, but this is changing. Over covered sectors include Technology and most finance.
In those out of favor sectors, look for the slightly smaller companies, especailly those slightly smaller than the big 'Names'. These companies are also often acquistion targets.
Look for companies covered by under 3 analysts. 10,000 US listed companies, only 3,500 covered by any analyst.
Look also for companies in an index, like Russell 2000, Wilshire 5000, or industry specific indexes.
If you are an income oriented investor, look at the TEI thread on Yahoo and look at some of the portfolios posted by James White, bond daddy and others.
They cover Royalty trusts, Reits, Utilities, etc.
These tend to be under covered by Wall Street Analysts.
Sectors to look in -
1. Regional Banks -
2. Middle size oil and Gas companies - tend to be light on dividends, however.
3. Real Estate investment trusts
4. Natural Gas Royalty Trusts
5. Metal mining companies, both gold and other metals
Undervalued countries - Japan still qualifies as undervalued by many measures, as much as 50%. IF you ar willing to do some home work, Japanesse drug companies are undervalued.
Also , look at the P/Es for Nissan, Honda, Toyota.
Canada tends to have a discount of about 5-to 25% versus US companies.
Developing Countries -China - Some of the expressway companies have dividends of 4-5%. See Jay Chen's web site for a list.
If you use a stock screening program, you will see anumber of sectors show up. |
