Friday, January 11, 2008

Best Stocks for 2018

At the start of any year, we often see articles that attempt to zero in on the "Best Stocks for the Coming Year." For 2008, many will emphasize recession-proof stocks, companies unconnected to the housing market, or stocks that can benefit from the booming commodities markets. However, such a short-term focus can be borderline backward-looking, and many stocks featured in such articles may wind up better known as the "Best Stocks of 2007." We're in it for the long haul, and we use forward-looking valuations to seek out firms with sustainable competitive advantages that currently trade at a discount to what they're really worth. With a little patience, we can take advantage of the market's disquiet to root out long-term opportunities.

We've compiled a list of five companies with stocks that are well-positioned to outperform in the coming decade. These firms share two key qualities. First, they possess either a wide or narrow moat that should remain intact--if not widen--through 2018. Second, transient negative news has driven their share prices into bargain territory. Each carries our 5-star rating as of this writing, meaning that their shares can be purchased for considerably less than where we peg their intrinsic values.

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