Every year, Michael picks his top ten. This year, there are bargains to be had after the markets have tumbled. What are the prospects in a market repricing environment?
Farr, Miller & Washington is a "buy-to-hold" investment manager, which means we make each investment with the intent to hold the position for a period of 3-5 years. Nevertheless, in each of the past thirteen Decembers I have selected and invested personally in ten of the stocks we follow with the intention of holding for just one year. These are companies that I find especially attractive in light of their valuations or their potential to benefit from economic developments. I hold an equal dollar amount in each of the positions for the following year, and then I reinvest in the new list.
This is my Top 10 for 2019, listed in no particular order. This year's Top Ten represent a nice combination of growth and defensiveness. Eight of the 11 S&P 500 industry sectors are represented, and their average long-term estimated growth rate (in EPS) is well in excess of the overall market. Also on average, these companies are much larger than the average S&P 500 company while carrying an average dividend yield of about 2%.
Results have been good in some years and not as good in others. I will sell my 2018 names on Monday, December 31st and buy the following names that afternoon. The reader should not assume that an investment in the securities identified was or will be profitable. These are not recommendations to buy or sell securities. There is risk of losing principal. Past performance is no indication of future results. If you are interested in any of these names, please call us or your financial advisor to discuss.
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