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Barron's: 12 Companies Spending Wisely to Survive Pandemic

Barron's: 12 Companies Spending Wisely to Survive Pandemic
(Weerapat Kiatdumrong/Dreamstime)

By    |   Friday, 31 July 2020 12:10 PM

Companies that have allocated wisely to capital expenditures and research and development should be the foundation for savvy investors seeking to structure an all-weather portfolio that can thrive through the pandemic.

Barron’s tackled the challenge of finding that perfect dozen.

The financial publication said it started with two lists: BofA’s list of Russell 3000 companies that rank the highest based on the methodology for the NYSE R&D Innovation Index and that also had a "buy" or "neutral" rating on the firm and a list of companies that rank high on Nasdaq’s Capex Achievers index methodology, which includes companies with rising capital expenditures and return on that invested capital of more than 10%.

“Biotechs and semiconductors dominated the research and development list and tech, media, and fintech were heavily represented in the capital expenditures list,” Barron’s said.

Barron’s screened further to find companies that had a better average return on equity and return on assets over the last three years than their respective sectors as an additional proxy for finding savvy spenders.

Barron’s whittled the list down to a dozen companies whose shares have gained less than 50% over the past year, potentially leaving more room for gains.

Here are the 12 companies that have invested wisely in capital expenditures and research and development have rewarded investors: 

Company / Ticker

  1. Facebook (FB)
  2. Visa (V)
  3. Mastercard (MA)
  4. UnitedHealth Group (UNH)
  5. Home Depot (HD)
  6. Verizon Communications (VZ)
  7. Merck (MRK)
  8. Comcast (CMCSA)
  9. Applied Materials (AMAT)
  10. KLA Corp (KLAC)
  11. Cadence Design Systems (CDNS)
  12. Micron Tech (MU)

However, others are more wary about the market's future direction.

Investment guru Ed Yardeni says the seemingly endless surging stock market is due for a pullback investors might be “delusional” to think the party will last forever.

Growth investors appear to be “punch drunk,” the president of Yardeni Research told CNBC.

“I don’t know that they’re delusional yet, but if this market just keeps going higher I’ll have to conclude that’s exactly what’s happening,” the Newsmax Finance Insider said.

“Prices have gone up at the same time that earnings expectations have gone down. They’ve only recently started to level out. So, I think the market needs consolidate, it needs to give some times for the fundamentals to show that the recovery is still there,” Yardeni said.

“The Fed just keeps filling up that punch bowl with spiked liquidity,” Yardeni said.

© 2020 Newsmax Finance. All rights reserved.


   
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Companies that have invested wisely in capital expenditures and research and development stand to continue to reward investors. 
stocks, thrive, pandemic
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2020-10-31
Friday, 31 July 2020 12:10 PM
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