Readers Pick the Top 20 5-Year Horizon Stocks

We asked a simple question: If you had to own only 1 stock for the next 5 years, what would it be? Since many of the hedge funds we track on the blog are centered around stockpicking, we thought it would be fun to see what readers had in mind for long-term picks of their own.

As you can imagine, we received the full gamut in terms of answers but definitely noticed a few themes in the responses. Firstly, when it comes to 'buy and hold,' blue chip stocks are the name of the game. By far and away, the largest amount of entries centered around well established blue chip companies that have a proven brand and often pay a dividend. Secondly, two sectors received the most votes and those were: technology and energy. Readers definitely see those two arenas as areas of long-term growth and sustainability it seems.

Without further ado, onto the results. We'd first like to toss out a few honorable mentions that received a lot of votes, but not quite enough to land in the top 10. Some of those stocks include: Cree (CREE), Exxon Mobil (XOM), Leucadia (LUK), Range Resources (RRC), Johnson & Johnson (JNJ), Monsanto (MON), Transocean (RIG), Berkshire Hathaway (BRK.B), FPL Group (FPL), and Verisk (VRSK).

And here are the TOP 10 PICKS, with the #1 pick being the stock that received the most entries:

10. A123 Systems (AONE)

9. BHP Billiton (BHP)

8. JPMorgan Chase (JPM)

7. Google (GOOG)

6. BYD Company (BYDDY.PK)

5. General Electric (GE)

4. Philip Morris International (PM)

3. Walmart (WMT)

2. Goldman Sachs (GS)

1. Apple (AAPL)


So there you have it, Apple easily had the most votes as many think this technology giant has become the next Microsoft (MSFT) in terms of dominance. Sticking with technology, there were also a lot of votes for Google (GOOG).

The blue chip names that received a lot of entries as we referenced earlier were WMT, GE, and PM. It was also interesting to us to see heavy support for some recent IPO's in Verisk (VRSK) and A123 (AONE). Readers definitely think these freshly public companies have bright futures. Also, while energy was a strong theme with picks like RIG, XOM, we also saw strong voting for plays in the 'green' energy category like BYD and AONE. Lastly, the theme of financials was strong as many people decided that they wanted to own Goldman Sachs (GS) as they've emerged through the crisis as heavyweights, with votes also trickling in for JPM.

Overall, very interesting results and thanks again for participating! Hopefully in five years we'll be able to check back in on this post and see who had the magic crystal ball to pick the right stock. After all, the point of this exercise was stockpicking for the long-term. Who will win? We'll have to wait and see. In the mean time, make sure you check back with us for our constant coverage of hedge fund portfolios and the like.

Comments

[BeeJay:]

Where is Big Blue (IBM)? Without IBM your list is suspect.

Oct 18 08:52 AM

[buoy:]

...that was fun, thx.

Oct 18 08:57 AM

[MILESCFA:]

That was an interesting popularity contest. However, we're in a secular bear market that is undergoing a strong (counter-trend) cyclical bull. I would not want to be initiating a 5 yr "buy and hold" here and my one instablog shows why :

seekingalpha.com/user/...

I urge you to at least view the first chart in my instablog, which is a 90 yr Dow chart showing percentage ups and downs. Volatility rules in a secular bear
...

Oct 18 09:26 AM

[john1940:]

I'm not impressed. The list feels more like a popularity result than carefully considered financial analysis. They are all US companies (was that a requirement?) although I admit they have good international positions. For the next five years, I would have picked a more international group with China, Brazil, and commodity based companies. Anything depending on the US consumer is suspect in my opinion. My best? Hongkong and Shanghai Hotels. It's the owner of the Peninsula hotels. 45 (that's it's HK exchange symbol) is expanding in Asia and is best in class. Disclose? I own 45 but not enough yet.

Oct 18 10:33 AM

[brewer:]

Apple is clearly the stock to own, they will continue taking share from Microsoft, and have huge growth potential doing it, the best cell phone, the iPod, the iTunes store, and the most profitable store in the entire retail market.

Oct 18 10:44 AM

[Granville:]

Please revisit this in one year to measure the effectiveness of this survey.

Oct 18 11:04 AM

[PhreddyPhert:]

HEY...John1940... sorry... they are NOT all USA stocks ... BHP? BYDDY.PK? ... lookem mup...

Oct 18 12:28 PM

[ModestGramm...:]

A friendly reminder: one says "number of entries" rather than "amount of entries." Explanation: "entries" is a countable noun.

Oct 18 02:24 PM

[mbkelly75:]

Interesting survey - Thank you for bringing it to my attention.

Oct 18 08:21 PM

[TheHague:]

WMT? Nice try! I just sold my shares that I bought in March! I can now buy into them cheaper than they were when I bought them! I gave up! Their last Div. was not that great! I tried to believe, but some thing is not right there! I don't know what it is but it ain't cool!

My two cents? JNJ or PG!

Oct 18 09:18 PM

[Road Runner:]

I'm impressed by the quality of this list, and how it reached down into some stocks that I didn't think were in the minds of the general investor community, like AONE and BYDDY.PK. Plus, it listed stocks that are truly (not stuck-in-the-mud like Microsoft and Yahoo) innovative companies that are “pushing the envelope” on the technology front like GE with green technology, like Google with search, operating system, and “cloud computing” technology, and like Apple with mobile Internet technology.

A123 Systems (AONE) and BYD of China (BYDDY.PK) are head-to-head competitors in the plug-in vehicle battery market. They both make the Lithium Iron Phosphate (LFP or LiFePO4) battery which, when the manufacturing is perfected, will be the ideal battery for vehicles, in my opinion. These are the clearly, in my opinion, the leaders in the quickly emerging LFP battery market. A123 seems to be the high quality player, and BYD seems to be the high quantity player. BYD is an established player with non-LFP batteries so it is well established and profitable. A123 is a startup with only one product – its LFP battery. I see investing in A123 as very speculative but potentially very profitable.

As a side note, if Japan wants to pull itself out of its 2 decade economic stagnation, one of the best things it could do is let Wal-Mart “run wild” in its country. Japan’s retail system is very inefficient. There is a lot of job protection going on. Wal-Mart would cause many jobs to be lost, but it would spur economic growth via a much more efficient retail system that would deliver goods to its citizens at a much lower price. This would leave money left over in people’s pockets that would lead to a higher consumption of other products increasing the economy.

Oct 18 10:14 PM

[Road Runner:]

TheHague, Don't lose faith in Wal-Mart. Wal-Mart hasn't performed this year simply because it is considered a "defensive stock”, a safe place to put money during tough economic times. Well, during 2009, money shifted out of defensive stocks into potential high growth stocks as the threat of economic catastrophe abated. It has little to do with how Wal-Mart, as a company, is performing. It’s just natural stock rotation.


On Oct 18 09:18 PM TheHague wrote:
> WMT? Nice try! I just sold my shares that I bought in March! I can
> now buy into them cheaper than they were when I bought them! I gave
> up! Their last Div. was not that great! I tried to believe, but some
> thing is not right there! I don't know what it is but it ain't cool!

Oct 18 10:40 PM

[bynd2009:]

Mr. Roadrunner, while providing valuable information about the future batteries also gets into some circular logic. Letting sprawl mart run amuck in Japan will cost a lot of jobs (as clearly mentioned in RR's comment) and all these jobless haps won't be able to buy the cheaper toothpaste and dinner sets and dress pants by "George" because they have no money!!! Japanese people will wake up one of these days and realize that their lunch is being stolen regularly via the 'Yen carry' trades because their Government QE policy of keeping interest rates near zero for almost two decades now. May be Sony or Matsushita will come up with a super-duper rechargeable battery. I would dump WMT and replace it with either IBM, HPQ, FCX or JNJ.

Oct 19 11:43 PM

[Benny D.:]

I agree with 'Road Runner' I Think that walmart is just out of favor right now. walmart I think is also an international growth play in China and Mexico and in the future, other countries! I would get some on a major pullback! Just my opinion. BD!

Oct 20 12:17 PM

[E.D. Hart:]

I would consider adding POT, and SLW to the mix to be considered on the list. POT is an extremely well run and dominant company with excellent fundamentals, and low valuation, with superior ROE .

POT has an estimated forward 2010 PE of 12. It has shown 32% earnings growth the last 5 years, and is estimated to show 40% growth earnings going forward.

I like AAPL, but I don't like the valuation. An estimated 28-32 forward.
Earnings growth last five years 75%, next five an estimated 20%.

In five years, SLW is a potential 4 bagger, and it is still at an attractive valuation--forward 19 estimated.
Growth the last 5 years-79%, next five years --estimated 19%.

Oct 20 08:11 PM

[warrejt:]

Agree w/ the comments about WMT. It's simply a victim of sector rotation i.e. taking on more risk. The economic recovery will be bumpy at best. At the end of the day, I still think people will continue to trade down and choose WMT for their value proposition.

Interesting list otherwise.

Oct 21 10:06 AM

[TJA:]

I lthink you missed a major factor of your survey. How many people submitted a choice. Was it 200, 2000, 20000, what? This is very important--lets make it have real credibility.

Oct 21 11:47 AM

[Mistrofan:]

Lol - nice - but other the Wal-Mart I wouldn't put my money in any of the mentioned stocks.

Oct 21 07:03 PM

[Windsun33:]

The biggest mystery to me is how AONE got on the list, unless it was pure hype and hope. They are not even close to making money, they lose money on every sale, and they are heavily in debt. There are more downsides, but those alone make me consider AONE an $8 stock at best.

Oct 21 09:47 PM