7 companies with large reserves and big business

Who does not want large stocks, which is also a great business?

That’s the obvious answer, but the article that appeared in Barron’s on April 13 (Subscription required), which suggests passive investing and modern portfolio theory has led investors to simply buy the index in blissful ignorance of the companies held by the portfolio.

Like Warren Buffett, Author Stephen Barron Bleiberg feels investors are best served by understanding they are investing in real business, despite the possession of a passive mutual Fund or etf to do so.

“Ultimately, investors are buying into real businesses and become better, trying to understand them,” says Bleiberg. “Thinking of stocks this way — as a real business, not aggregates of return and volatility statistics is the fact that many investors have lost sight of since, as [modern portfolio Theory].”

While you can argue with the logic of international standard, the reality is, most people don’t have the interest level necessary to do even the most basic research.

If you are one of these people, here are seven big stocks that also big business.

To be considered great business must have two things: return on invested capital of 20% or more in each of the last three fiscal years; and one of the fortune 2018 of the most respected companies in the world.

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Companies with large reserves and big business:


Source: Shutterstock From

Starbucks (you)

Return on invested capital: 32.3%

The regulations on the status on the list: 5th

Anyone who’s read the news last week is keenly aware of the problem Starbucks Corporation (Nasdaq:get) now stand for the forcible removal and arrest by the police in a Philadelphia Starbucks.

By the way, Starbucks came out before this PR disaster will be studied in business schools across the country. Very few companies, including most of the names from the list of Fortune magazine could cope with such a difficult situation so clear and sincere regret.

I am always amazed how Starbucks looks at the world compared to most companies in America. It’s in its class. Even Warren Buffett, who held a beacon of morality and ethics, you might learn a thing or two from people in Seattle.

“The fact that Howard Schultz, but especially the fact that CEO Kevin Johnson [was] made here was wonderful. This is the anti-mark Zuckerberg, the anti-Sheryl Sandberg,” Yale senior associate Dean Jeffrey Sonnenfeld told CNBC. “They really rely on. Instead of writing about leaning, they actually did it.”

I could not agree more.

As far as I can tell, Starbucks as many stocks and large business. Can be biggest.

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Companies with large reserves and big business:


Source: Jerry landers, via Flickr (modified)

Southwest Airlines (LUV)

Return on invested capital: 23.3%

Position on Fortune’s list: 8

Not only southwest airlines co (USA:LUV) many stocks and large business, he knows how to hire good pilots.

Safe emergency landing, the veteran pilot, captain Tammy Jo Schultz of Boeing 737 flight 1380 from new York to Dallas is a Testament to how Schultz for her talent, flying a plane while under extreme stress and the company for recognizing this talent back in 1993 when she was hired after retiring from the Navy.

Big business went into details. Skills demonstrated Shults says a lot in the preparation of the South-West so that all its pilots are able to perform their duties in an exemplary manner.

You can invest in some other airlines, but I’m sure your best choice is the southwest. It is no accident that southwest is Berkshire Hathaway Inc. (US:BRK.IN, USA:BRK.B) the largest holding company for four airlines stocks.

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Companies with large reserves and big business:


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Nike (NCRE)

Return on invested capital: 26.5%

Position on the Fortune list: 16

Interestingly, soon after the former belongings to promote ink. (Nasdaq:Lulu) CEO Laurent Potdevin flew athleisure clothes dealer in early February because of faults, the same problems reared there ugly head at Nike Inc. (US:NKE).

Examination of internal staff employees in the result of CEO mark Parker holds formal six-month review of the culture of the company, which led to the departure of several senior leaders.

Parker, who was scheduled to retire by 2020, now will remain for an indefinite period of time to fix what ails the culture of the company.

Fortunately, for the shareholders of Nike, Parker acted with the same speed, breaking the PR this offense shone on the company.

Big business to act swiftly, decisively and in the interests of all stakeholders. Career could be finished — the President of Nike brand Trevor Edwards is retiring in August, he has long been considered the successor to Parker — but that’s the price you have to pay to keep the trust of customers.

Interestingly, that’s what I said in June last year About Nike:

“Adidas can win skirmishes happening here and now. Long term, however, I see culture Nike win. It won’t be easy, but if there is something that I learned from reading books Phil knight, the people in Beaverton resilient bunch.”

They believe that it is better to be.

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Companies with large reserves and big business:


Source: Dean Gokhman via Flickr (modified)

3M (MMM)

Return on invested capital: 22.5%

Position on Fortune’s list: 21

It’s from 3M (Ticker NYSE:MMM) best industrial conglomerate now that General electric company (Ticker NYSE:GE) have collapsed to a shadow of its former self?

Yes.

In 2016, I called MMM one of the top 10 stocks every Retirement portfolio needs; nothing has changed after almost two years.

Well, nothing, except, the shares of MMM to 33%, not including dividends. It is very good for the company, which operates such a disparate group of companies.

My colleague James Brumley recently named UM one of 10 best stocks to buy and hold forever. I could not agree more.

“It’s a wild mix that seems to work on the 3rd, though, giving the company something to sell, regardless of the economic situation. The clincher: 3M have already managed to pay and increase its dividend every year until 1977.”

It’s hard to argue with success.

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Companies with large reserves and big business:


Source: Mike Mozart via Flickr (modified)

Home depot (HD)

Return on invested capital: 30.4%

Position on Fortune’s list: 22

Perhaps no company benefited more from the recovery of the U.S. economy since 2008 than in the home depot Inc. (TICKER NYSE:HIGH DEFINITION). Housing prices in many U.S. cities (not all) have risen to levels equal to or exceeding where they were before the recession, creating a broad swathe of eager renovators.

Ka-Ching!

Unfortunately, HD stock came under fire in 2018. Shares declined 5% year on 18 April, the first year in Russia since 2008. This is true. In HD works on the tenth year in a row to generate positive returns for shareholders.

Do you think that his best days are behind it, there is very little on the S&P 500 and the companies that meet the Home depot stable performance over the last decade.

However, to increase the price of the shares of the Way home depot does, you have to grow revenues.

“Home depot was to beat on earnings and revenue for six consecutive quarters. In the last quarter, comparable sales grew by 7.5% against expectations of 6.5%,” wrote InvestorPlace is Bret Kenwell April 17. “Obviously, as costco Wholesale Corporation (indexcost), home depot has a business model that was not necessarily invincible on Amazon, but lost the insulating against him.”

Big business to play to their strengths.

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Companies with large reserves and big business:


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Boeing (BA)

Return on invested capital: 49.7%

The regulations on the status list: 25

Despite southwest crash landing was mentioned earlier, the Americans actually flew more than they ever had, and that creates a need for more planes.

Currently, there are about 23,500 commercial aircraft operating on a global scale; Boeing (Ticker NYSE:BA) expects the world will need at least 41,000 new aircraft over the next 20 years to meet the demand.

This is great news if you are a BA shareholder.

Recently I presented some reasons why I thought that Boeing stock will continue to fly higher. Chief among them was the fact that it automatically 11.5 free cash flow billion in 2017, a record company.

In fact, when Boeing is not entangled in unnecessary political battles, which he recently fell from Bombardier, Inc. (OTCMKTS:BDRBF) over the canadian company’s series of aircraft, it actually works pretty damn good business.

It’s not easy to do when you build the planes, which sell for more than $ 400 million apiece.

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Companies with large reserves and big business:


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UPS (UPS)

Return on invested capital: 27.1%

The regulations on the status on the list: 33

Although I tend to lean toward Fedex Corporation (Ticker NYSE:fdx at), when it comes to apples to apples comparison with its main rival delivery of your shipments. (Ticker NYSE:UPS), there is no doubt UPS does a good job of delivering above average returns on invested capital.

UPS, like FedEx, lives in a world of e-Commerce is monitored Amazon.com ink. (NASDAQ:EVENTS OF THE WEEK). With Amazon generating 44 cents of every dollar in online sales in the US in 2017, two of the largest global providers, Amazon vertically integrates e-Commerce, including providing end-to-end solution delivery.

I just don’t think it is possible or reasonable given the real business of the company sells 100 million Amazon Prime members more things.

More importantly, as my colleague Josh Enomoto recently noted, the remaining 56% of online sales must be delivered by someone; it can also be UPS.

Of the company amounted to 7.3 billion dollars in discretionary contributions to its three main pension plans of the United States in 2017, more than double the contributions in the previous two years.

Back that would be close to 6 in operating cash flow, billion dollars, despite spending $5.2 billion in capital expenditures over the past year, or an amazing 7.9% of revenue.

A great business to invest in yourself. Kudos to UPS for understanding this.

At the time of this writing, will Ashworth not to take a position in any of the above securities.

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