MoneySense Magazine Picks 10 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 (FFH)
• Leucadia National (LUK)
• JNJ
• Microsoft (MSFT)
• Service Corp. (SCI)
• Transcanada (TRP)
• Wal-Mart (WMT)

Of the ten stocks above, the majority of them are U.S. companies. eBay (EBAY) and Microsoft (MSFT) are tech companies whose glory days are long gone. They are definitely not 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 with 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 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 is that 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 best avoided.

Boeing (BA), Wal-Mart (WMT) and Johnson & Johnson (JNJ) are great to hold long-term. Johnson & Johnson is a solid company capable of riding out any storm. Boeing operates in a niche category and has exposure to both civilian and defense sectors. Thought Wal-Mart’s fantastic growth days are over, it is still a good buy since the company has a unique business model and is the favored destination for millions of shoppers. In the current recession, cash-strapped consumers head to Wal-Mart for unbeatable prices. Wal-Mart 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 the doldrums.

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

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 had $8.2B in revenues. TRP probably is a good long-term pick since its pipelines are used by oil companies to transport oil across North America.

Comments

[Bryan:]

The 10 stocks you should have bought 10 years ago.

Jul 28 03:21 PM

[jack dee:]

I have this great trick I try to do with stocks, I buy them when they are cheaper and then sell them when they are higher.

Stocks like JNJ and MSFT are great for this, they are both good long term holds, and can be traded even by know nothings like me...

Jul 28 05:23 PM

[Southboroug...:]

While I don't think I'm interested in owning hardly any of the US stocks in this list for the next 10 years, Microsoft is one I would consider. Google is a great company, but it's only now that Microsoft is seriously turning their attention that way. Wolfram Alpha is a useful search engine in ways Google is not, so it's smart that MS has taken a similar position with Bing. Bing will take a bite out of Google. In response, Google says they will release a Chrome based OS. I don't chortle and guffaw often...but come on. Then MS announces they will give away a free lite version of Office - again, a direct attack on Google Apps. Calling Google the defacto future is too reminiscent of Netscape for me, and Microsoft too much like IBM.

On eBay, I take the reverse opinion that the current economic climate works in their favor. People want to buy 'wanted' stuff, just not new and at a discount. An e-thrift store.

In the end, for US stocks, I think Intel is one of the few worth owning for the next 10 years.

Good article David, thanks for posting. This is the first I heard of CX, but that's my kind of holding.

Jul 29 05:51 AM

[exodusfromebay:]

If eBay is on this list, the stock advice is worthless.

John Donahoe continues to take steps to destroy the core marketplace - driving away or suspending millions of small- to medium-sized sellers, the very people who are the backbone of the company, and are the main income stream.

The focus on large volume sellers and fixed price is insane. Copy-catting Amazon is shear stupidity. This man has an MBA? Where From, a Cracker Jack Box?

This arrogant idiot's every move has been designed to destroy the "flea market atmosphere" he despises. What an elitist snob!

JD needs to realize that you can't scuttle one of the strongest brands in history (eBay is an Auction site) while antagonizing the entire client base (eBay Sellers who pay PayPal and eBay fees) and expect to stay in business.

The company is going down for the count, it's just a matter of time.

He has destroyed the supplemental and primary income streams of million of users. I wonder how much he has to spend on security and bodyguards?

JD doesn't understand the business he is trying to lead - and he obviously can't find his behind with both hands and a flashlight.

Donahoe has Got to Go.

If not, eBay will die, destroyed from within.

Jul 29 01:43 PM

[BeachRider:]

This is a tough crowd to sell EBAY to, for sure. I don't get the MSFT slander, though. Windows XP and Office 2000/2003 were tremendous money-makers, up to 2007. 2008 and 1Q2009 have been lesser years (they have been lesser years for many companies). MSFT just needs the new-Office and new-Windows to generate huge revenues. MSFT has tremendous profit-margins and are selling a half of APPL's P/E. You do need to be careful about the purchase timing. This stock still has quite a bit of index-play and can be bought more-cheaply with a good understanding of options-expiration.

Aug 07 10:58 AM