Stingy Investor Contact - Subscribe - Login
  Home | Articles | Screens | Links | SNW | Rothery Report
 
The Top 500 U.S. Stocks for 2008
Southern Stars


The rise of the Canadian dollar has been good news for snowbirds and cross-border shoppers. It may be even better news, though, for cross-border investors. U.S. stocks are now on sale for 20% less, in loonies, than they were at this time last year.

To make it as easy as possible for you to pinpoint the best U.S. buys, we're happy to again present our Top 500 ranking of U.S. stocks. Just as in our Top 200 Canadian stocks, the Top 500 uses objective measures of financial virtue to uncover potential stars.

We start by selecting the 500 largest public companies in the U.S. based upon their net sales. We then evaluate each stock for its growth prospects and assign it a letter grade. The fastest growing stocks are awarded an A. The next group gets a B and so on, all the way down to F.

Growth is only half the equation, though. Next we consider a stock's value appeal and assign it a grade on that scale as well - the best bargains get an A; the most expensive stocks walk away with an F. The ideal, of course, is for a stock to get a double A rating, marking it as both an outstanding growth and value prospect, but that's rare. Only a single stock managed that feat this year, although 11 others managed to nab at least one A and a B.

Should you load up on these highest graded stocks? We wish we could say yes, but the reality is that any reasonable system of evaluating stock picks goes through up and down periods. Last year, we found five stocks that earned A's on both our value and growth scales. Our best performer was Parker Hannifin, a manufacturing firm that split its stock and rewarded us with a 43% gain. Unfortunately, two of our picks disappointed. Liz Claiborne, the clothing manufacturer, fell 35% and Old Republic, an insurance firm, posted a 33% loss. Taken as a group, our five double-A stocks lost 7%, not including dividends.

The losses show the importance of applying your own judgment to the results from the Top 500 U.S. Stocks - or, for that matter, from any stock screen. You should view the Top 500 as merely a starting point for your own research. We're confident that even if you don't use our methodology, you'll find that our tables contain a wealth of data about each stock that can help you zero in on the investments that are right for you. In fact, our tables contain so much information that we've moved our giant Top 500 U.S. Stock table to our website. We encourage you to visit MoneySense.ca and download the entire table - it's free. (See the bottom of the page for a link.)

To get a taste of what's available, consider the handful of stocks that earned at least one A and one B for their value and growth appeal. We've listed the twelve stocks that managed this feat in The Distinctive Dozen, above.

Some extraordinary qualities are needed to make this list. On the value front, all our chosen stocks pay a dividend and sell for modest price-to-sales and price-to-book-value ratios. On the growth side, they demonstrate strong increases in sales per share and earnings per-share. In addition, most generate healthy returns on equity, carry relatively little debt, and enjoy rising share prices. But keep in mind that these stocks are controversial. After all, strong growth is rarely to be had at rock-bottom prices without some risk.

CVS Caremark (NYSE:CVS) was the only stock to garner a double-A rating this year. The company's chain of drug stores has posted outstanding numbers. The company is the No. 1 provider of prescriptions in the U.S.

Archer-Daniels-Midland (NYSE:ADM), one of the world's biggest agricultural processors, was one of our top picks last year and remains on our list this year. It continues to show strong growth and is now an even better value than it was in 2006. Bargain hunters will salivate over its low price-to-earnings ratio.

Universal Health Services (NYSE:UHS), another carryover from last year, owns a string of hospitals and health care centres. Investors appear to be spooked by the heated debates over reform of the U.S. health care system and what those reforms might mean to U.S. health care providers. In response, they've driven down Universal's share price to the point where it's an even bigger bargain than it was last year.

ConocoPhillips (NYSE:COP) is a major oil and gas producer that will appeal to fans of Warren Buffett. His Berkshire Hathaway owns a large stake in Conoco. Provided oil prices remain high, ConocoPhillips should do well.

Two truck makers made our list. PACCAR (NYSE:PCAR) sells commercial trucks (think shipping) and Oshkosh (NYSE:OSK) produces specialty trucks for defence, concrete placement, and municipal services. Both firms have very strong growth characteristics with sales and earnings growth of more than 20% annually.

If you're looking for a winter getaway, you might consider investing in Royal Caribbean Cruises (NYSE:RCL). Shareholders not only get a good stock but can also obtain hundreds of dollars worth of free cruise credits.

Alternately, you can warm yourself with a dram of Dalmore single malt from Fortune Brands (NYSE:FO). The firm manages a plethora of alcohol, golf, and home product brands - and its 2% dividend yield will let you sample its products all winter long.

Two natural gas giants made our list. Chesapeake Energy (CHK) is the largest independent producer of natural gas in the U.S., while ONEOK (OKE) is one of the country's largest natural gas distributors. Both stocks show strong momentum and ONEOK was recently ranked by Fortune magazine as the most admired energy company in the U.S.

Two insurance firms round out The Distinctive Dozen. Cincinnati Financial (CINF) sells commercial insurance but it is also active in home and auto coverage. It yields a hefty 3.6%. Transatlantic Holdings (TRH) is an insurer's insurer - it provides reinsurance to other property and casualty insurance firms. We like the fact that the company has doubled its dividend over the last five years.

As always, remember that stock screens have their limitations. Check to make sure that the company's situation hasn't suddenly changed in some important way before you invest. Read the firm's latest press releases, regulatory filings, and scan newspaper stories to make sure that you're up to speed on all of the most recent developments. Then take your loonies and find yourself some U.S. bargains.

Download the full table of top US stocks for 2008 (a .xls file)

From the December/January 2008 issue

  MoneySense Articles
 Cdn Top 200 2016
 US Top 500 2016
 Retirement 100: 2015
 Cdn Top 200 2015
 US Top 500 2015
 Retirement 100: 2014
 Cdn Top 200 2014
 US Top 500 2014
 Retirement 100: 2013
 Cdn Top 200 2013
 US Top 500 2013
 Retirement 100: 2012
 Buffett Buys
 FB IPO
 Stocks that pay
 Value in the S&P500
 Cdn Top 200 2012
 US Top 500 2012
 Retirement 100: 2011
 Where to invest $100k
 Where to invest $10k
 Summer Simple Way
 A crystal ball for stocks?
 Cheap & safe
 Risky business
 Cdn Top 200 2011
 US Top 500 2011
 Retirement 100
 Dividend investing
 Value investing
 Momentum investing
 Low P/E P/B
 Dividends
 Dividend growers
 Cdn Top 200 2010
 US Top 500 2010
 Graham's prescription
 Income 100: 2009
 The case for optimism
 Cdn Top 200 2009
 U.S. Top 500 2009
 Wicked investments
 Simply spectacular
 Income 2008
 Small stocks, big profits
 Cdn Top 200 2008
 US Top 500 2008
 Value that sizzles
 So simple it works
 Income 100
 No assembly required
 Investing by the book
 Cdn Top 200 2007
 US Top 500 2007
 Invest like the masters
 A simple way to get rich
 Top Trusts 2006
 Stocks for cannibals
 Car bites dogs
 Cdn Top 200 2006
 US Top 1000 2006
 So easy, so profitable
 Top Trusts 2005
 Dogs of the Dow
 Top 200 2005
 Money for nothing
 Yield of dreams
 Return of the master

MoneySaver Articles
 2 Graham Stocks for 2017
 3 Stingy Stocks for 2016
 5 Graham Stocks for 2016
 3 Stingy Stocks for 2015
 3 Graham Stocks for 2015
 3 Stingy Stocks for 2014
 4 Graham Stocks for 2014
 8 Stingy Stocks for 2013
 6 Graham Stocks for 2013
 9 Stingy Stocks for 2012
 8 Graham Stocks for 2012
 Simple Way 2011
 5 Stingy Stocks for 2011
 7 Graham Stocks for 2011
 Simple Way 2010
 5 Stingy Stocks for 2010
 8 Graham Stocks for 2010
 Simple Way 2009
 Timing Temptation
 19 Stingy Stocks for 2009
 4 Graham Stocks for 2009
 Simple Way 2008
 Active at Passive Prices
 Unbundling ETFs 2008
 5 Stingy Stocks for 2008
 5 Graham Stocks for 2008
 Is your index too active?
 Graham's Simple Way
 Canadian Graham Stocks
 5 Stingy Stocks for 2007
 8 Graham Stocks for 2007
 Top SPPs
 The Simple Way
 A hole in your IPO?
 Monkey Business
 8 Stingy Stocks for 2006
 Graham Stock Gainers
 Blue-Chip Blues
 Are Dividends Safe?
 SPPs for 2005
 Graham's Simplest Way
 Selling Graham Stocks
 RRSP Money Market Funds
 Stingy Stocks for 2005
 High Performance Graham
 Intelligent Indexing
 Unbundling Canadian ETFs
 A history of yield
 A Dynamic Duo
 Canadian Graham Stock
 Dividends at Risk
 Thrifty Value Stocks
 Stocks in Short Supply
 The New Dividend
 Hunting Goodwill
 SPPs for 2003
 RRSP: don't panic
 Desirable Dividends
 Stingy Selections 2003
 10 Graham Picks
 Growth Eh?
 Timing Disaster
 Dangerous Diversification
 The Coffee Can Portfolio
 Down with the dogs
 Stingy Selections
 Frugal Funds
 Graham Revisited
 Just Spend It
 Ticker Temptation
 Stock Mortality
 Focus on Fees
 SPPs for the Long Term
 Seeking Solid Stocks
 Relative Strength
 The VR Approach
 The Irrational Investor
 Value Investing

Globe & Mail Articles
 Indexing advice
 Media-shy stocks
 Curse of size
 Market uncertainty
 Be even lazier
 Scary beats safe
 Small, illiquid, value
 Use the numbers
 What value is good value?
 Sculpt for value
 Value vs CAPE
 Graham Rules
 CAPE vs PeakE
 Top value ratio
 Low Beta
 Value and dividends
 Walter Schloss
 Try unloved AIG
 Why I'm a value investor
 New world of ETFs
 Low P/Es possible
 10 yielders
 Be happier
 Long-Short
 Dividend Downside
 Shiller's P/E
 Copycat investing
 Cashing in on class
 Index roulette
 Theory collides
 Diving too deep
 3 retirement villains
 Scourge of inflation
 Economic omens
 Analyst Expectations
 Value stock scarcity
 It's all in the index
 How to pick good funds
 Low Beta Wins
 Hunt for dividend stocks
 Think garage sale

Advisor's Edge Articles
 Passive Rebundling
 Doing the math

Norm Speaks
Flip Books

Tools:
 Asset Mixer
 Periodic Table
 ETF Fee Calculator



 
About Us | Legal | Contact Us
Disclaimers: Consult with a qualified investment adviser before trading. Past performance is a poor indicator of future performance. The information on this site, and in its related newsletters, is not intended to be, nor does it constitute, financial advice or recommendations. The information on this site is in no way guaranteed for completeness, accuracy or in any other way. More...