Looking for Long Shots
When the new edition of Value Line comes out each week, one of the first places I turn is to the list of the 100 stocks the service estimates have the highest three-to-five-year appreciation. Almost all of these stocks receive very low ranks for short-term performance, financial strength and overall safety. They are long shots and turnarounds that will either soar to new heights and give investors a return of many times their investment -- or they will flame out entirely, leaving a pile of ash. This list requires careful shopping, but it has provided some of the best performing investment ideas over the course of my career.
Many of the stocks on the list can be ruled out almost right away. Green Mountain Coffee Roasters (GMCR) makes the list. If everything goes right for the company, the stock could regain some if its former glory. However, I dislike the product and think there is a high fad element to the business, so I have no interest in owning the shares. The same can be said for the handful of for profit education stocks on the list of potential high-return long shots. The industry's business model is broken so until the majority of the group trades below liquidation value, I don't want to own these stocks....451 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
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