Every Wall Street analyst and TV host always talks about "core" holdings. The stocks that you hand down from generation to generation. The types of companies whose certificates your next of kin would take out of the drawer and tape to your headstone once you take your one-way trip North. They have been IBM, GM, Philip Morris (PM), GE, Caterpillar (CAT), you know what I mean. There is a second tier of companies that deserve to sit in the same drawer as grandmas old stock certs, and I have identified some of them here.
Chicago Bridge & Iron (CBI) -- provides engineering, procurement, and construction (EPC) services, as well as process technology solutions primarily to energy and natural resource industries. The company offers its services for the petroleum, water, and nuclear industries, including above ground storage tanks, elevated storage tanks, liquefied natural gas (LNG) tanks, pressure vessels, nuclear containment vessels, and other specialty structures; and upstream and downstream energy infrastructure facilities, such as LNG liquefaction and regasification terminals, refinery units, petrochemical complexes, and other energy-related projects. The stock has had a tremendous 52 weeks with a gain of over 34%. I don't want to hear the run is over, the stock is still 20% off its 52 week high and trades at a 15 multiple. A few weeks back they reported stellar earnings. The top-line figure was up by 38% to $1.3 billion, as the company benefited from the rising demand worldwide for energy infrastructure, especially in the LNG, gas processing and oil sands markets. Oil sands is a key component to the future of cheap oil and our reliance on the Middle East. Most people have not heard of them, but they have been around since 1889. With over $500mm in cash and only $80mm in debt their balance sheet is very strong.
World Fuel Services (INT) -- a fuel logistics company, engages in the marketing, distribution, and sale of aviation, marine, and land fuel products and related services worldwide. It operates in three segments: Aviation, Marine, and Land.
The Aviation segment offers fuel and related services to commercial airlines, second and third-tier airlines, cargo carriers, regional and low cost carriers, corporate fleets, fractional operators, private aircraft, military fleets, and to the United States and foreign governments. Its aviation related services include fuel management, price risk management, arranging ground handling, and dispatch services, as well as arranging and providing international trip planning, including flight plans, weather reports, and overflight permits.
The Marine segment offers fuel and related services to international container and tanker fleets, commercial cruise lines, and time-charter operators, as well as to the United States and foreign governments. Its marine fuel related services include management services for the procurement of fuel, and claims management.
The Land segment offers fuel and related services to petroleum distributors operating in the land transportation market, retail petroleum operators, and industrial, commercial, and government customers, as well as operates retail gasoline stations. They have also enjoyed a 40% gain in the past 52 weeks, and there is more to come. Debt to equity ratio is 1.49 which is extremely strong, and 95% of the stock is held by institutions. Last week they reported record earnings.
Church & Dwight (CHD) -- together with its subsidiaries, develops, manufactures, and markets a range of household products, personal care, and specialty products under various names in the US/Intl. Their Consumer Direct segment offers pure baking soda, powder and liquid detergents, carpet and room deodorizers, cat litter, fabric softeners, dental care products, Trojan condoms, deodorants, etc. The Consumer Intl segment markets these same products in Canada, France, Australia, UK, Mexico, Brazil and China. The SPD segment offers specialty chemicals, animal feeds, fermentation enhancers, fatty acids, rumen bypass fat and lysine, for industrial, institutional, medical and food applications. They have been around since 1846, and like the first 2 companies I wrote about has also had a great 52 weeks, returning 31.5%. Their earnings this past week were slow and steady, as well as an $80mm stock repurchase program, and a reaffirmation of FY 2011 EPS targets. Their debt to equity ratio is 1.89, which is pretty solid as well. They declared their 443rd consecutive quarterly dividend, which is simply amazing.
Hershey Co (HSY) -- manufactures, markets, sells and distributes all types of chocolate and confectionery products, pantry items, and gum and mint refreshment products worldwide. Everyone in the world knows Hershey, and if you don't then something is wrong! Hershey's Kisses, 5th Avenue, Bubble Yum, Cadbury, HeathBar, Jolly Rancher, Milk Duds, Rolos, SKOR, Whoppers, Zagnut, Reese's, Kit Kat, Twizzlers, Almond Joy, Mounds, York Peppermint, Ice Breakers, Mr. Goodbar, Symphony. Ok, now that I am craving sugar, let's not forget the cocoa/syrup you swirl around in your favorite glass of milk. Look at their earnings as well. Over the past 5 years, gross margins are at around 43%, and averaged just over 38%. Operating margin were at 20% and averaged 17.5%. The stock is up just shy of 19% over the past 52 weeks and is still 6% off its high. You get 2.4% dividend as well, which is a nice ancillary benefit. Their latest quarter beat the street and raised guidance as well. Hershey's has a $13b market cap, you don't need a sweet tooth to tuck this one away.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.