Stocks To Buy Now And Hold For A Bullish Long Term

Disclaimer: The information contained in this article is for educational purposes only and the figures given are accurate as of the close of the New York Stock Exchange on March 27, 2009. If the reader utilizes the information herein to make trades or for any other financial purposes whatsoever the responsibility is the reader's and the reader's alone. By reading this article you hereby agree that Scott Isaacs, Newsvine, MSNBC and the ultimate parent company General Electric are indemnified from legal action and, furthermore, are not responsible to provide indemnification for any potential losses incurred by the reader.

I have been surveying the market for months now, watching it gyrate seductively like a stripper's hips calling out "Put some money in my g-string, baby! I'll make it worth your while!" and within the last week and a half I have actually started to believe that if investors begin putting $20's into the market's g-string that they will get a show that is worth their while. I have spotlighted a few strippers that I think will deliver the most bang for your buck here:

Order of figures: Ticker Symbol: Company Name - 3-27-09 Intraday Price | 52 Week High | 52 Week Low | Dividend

GE: General Electric - $10.78 | $38.52 | $5.87 | $1.24

For purposes of objectivity I must state that my father is employed by the General Electric Aircraft Engines division and that General Electric is the parent company of Newsvine by way of MSNBC, a joint venture between Microsoft and the National Broadcasting Company (NBC).

General Electric has been a bellwether of the Dow Jones index ever since it took its place among the 30 blue chippers. Therefore, when the market started taking serious blows, General Electric was dragged down with it. GE, however, has continued to be the strongest of the strong among American companies. It produces everything from aircraft engines to water treatment equipment. The single greatest power of the company (and thus its potential to create profits for an investor) lies in its phenomenal portfolio of ready-to-install technologies that help companies, municipalities and private citizens increase their productivity and availability of resources while decreasing their negative impact on the environment and their costs for raw materials. GE's Hamma desalination plant in Africa is slated to provide drinking water for more than a million people per day by taking in sea water and removing the salt. Such technology will proliferate throughout the world as the global population grows and fresh water supplies dwindle. We are already seeing wars in the American Southwest over the Colorado River and its designated irrigation paths and those wars are sure to multiply as the population grows along with the phenomena of a warming atmosphere currently causing snow in the mountains to melt too early to provide water during critical crop growth periods during the growing season. GE's ZENON Membrane Solutions are currently being employed to remove bacteria from water in Michigan. While the application of ZENON here in America is obvious for a sanitation-conscious society like our's, in countries plagued with overpopulation ZENON is a possible (and perhaps likely) answer. Such a country with an economy prosperous enough to buy can be found in India which boasts a population of over a billion people whose economic prowess can, and indeed must, develop the funds to deal with their water problem. In India, human waste contributes (combined with agricultural waste and industrial refuse into a noxious cocktail) to a 75% rate of surface water contamination. Such contamination is a major drain on productivity due to chronic workforce illness so it is clearly in India's best economic interests to clear up the problem and GE has the best solutions paired with the best talent in the field. Also in the field of water treatment, GE has extensive experience in dealing with wastewater generated by industrial factories thanks to its own large manufacturing facilities. GE was brought in by Ford to its Kentucky Truck Plant located in Louisville, Kentucky because of a burgeoning problem dealing with the wastewater that the plant was producing. GE was able to come into the situation, cut the factory's costs and shave 230,400 gallons of water annually from the plant's consumption. The Chinese government is facing a similar but larger problem with regards to the wastewater produced by its massive number of industrial facilities. Because China's government lives one national rebellion away from extinction each day, its consequences are by far the most dire. As Chinese manufacturing's "Poisoning of the Yangtze," the incident brought serious attention to the social price that China and her people had been paying but had rarely, if ever, been factored in by the average Chinese citizen up to then. Popularized by the media, the event was characterized by portraying it as the end of an exotic species: the Yangtze Dolphin. China took a good deal of international heat over this but the backbreaker was the potential public response which could have been much larger and toppled the Communist government. After seeing such risk, there is very little interest in testing fate once more.

Part of GE's renewable (not so green) energy business is its nuclear reactor power plants. GE has teamed with Hitachi, both of whom have been constructing nuclear reactors since the 1950's. As demand has crept upwards around the world (but not so much in the United States), particularly in the wake of high oil prices within the last two years, the competition for contracts has become heated. Toshiba, whom GE and Hitachi had worked cooperatively with on nuclear reactor R&D beginning in 1967, acquired Westinghouse within the last few years and opened an office in the United States which triggered the breaking off of cooperation between GEH and Toshiba. Toshiba has since inked two deals with China to construct nuclear reactors to produce electricity there through their Westinghouse arm. If green renewable energy does not come around fast enough and the United States comes to a point where it is in desperate need of power not generated by fossil fuels, GE will likely see significant growth in its joint venture with Hitachi.

Perhaps the best profit generator that GE possesses, however, is its renewable energy sector. GE is, I believe, straddling what the steam engine was to the 18th and 19th centuries: the next step forward in the manufacture and production of goods and services with an eye towards improving the efficiency of all workers and a second, newly minted, goal of translating human knowledge into tangible results. The first aim is a simple, yet profoundly powerful, idea: if you pump up the volume of RPMs/yr you can get out of a central shaft in an engine (and, looking at electricity as simply a different but equal form of fuel to create those RPMs) while exerting downward pressure on the price of the fuel it takes to create those RPMs/yr then the entire economy's production increases (making the pie bigger) and more people can obtain more goods because prices as a whole decline because of the across-the-board increase in supply. The second goal that has only been around since early this century, converting fuel into knowledge and then applying that knowledge to obtain the savings of time & fuel, is the most efficient way of making the economic pie larger. Finding an inexpensive and abundant stockpile of fuel (like solar rays and regular wind gusts) is the key to unlocking the potential of the 21st century economy or the economy of the "future," as it were. Human life expectancy and the manner in which humans live their lives (from Hobbes' nasty, brutish and short all the way up to the present with its expected lifetime of somewhere in the mid-70's) has improved with our consumption of energy. Our discovery of electricity spiked our energy use upwards at around an 80 degree angle and rapidly improved our living conditions and general quality of life. Now the boost that gave us the spike in energy consumption, fossil fuels, are becoming harder to find and/or extract which is resulting in a slowing of the improvement of the human condition. General Electric, sitting on both solar and wind power and seemingly having the will to plow money into both until they reach their potential through Jeff Immelt, is poised to be the Standard Oil of the 21st century and put America back on top again. This is one of the most fundamentally sound stocks listed. GE's Transport sector also generates revenue for the company by manufacturing locomotive engines.

MMM: 3M - $50.33 | $83.22 | $40.87 | $2.01

The Minnesota Mining & Manufacturing Company (hence the name and ticker symbol: 3M) has been and continues to be a fine company in the American mold of expanding into different industries and spreading innovation wherever it goes. 3M has shown a consistent ability to adapt to changing market conditions as well as moving to fill new niches that open up in their areas of expertise. Even better, 3M is not afraid to strike out into an unknown direction which makes the company a great choice of investment for the long-term portfolio. The company has adopted a healthy attitude towards risk: they are concerned about trying something and failing but they are petrified of not trying new things at all and bearing the lack of success that behavior carries with it. 3M is a master of reinventing itself and it is estimated that approximately one fourth of the company's sales each year stem from new products that they have developed and not just mainstays of product lines that have succeeded in the past. 3M's track record of creating products that are unique and spread like wildfire is proven: the ubiquitous Scotch tape and Post-It Notes are just two examples. Others include Bondo (everyone seems to have a story about this automotive body paste), Filtrete, Nexcare, Scotchgard (great for furniture and carpets, especially if you have kids or pets) and Tegaderm (I've worn this clear bandage after a few surgeries and found it to be like synthetic skin). 3M stock is a bit pricey, even after the market shed a good deal of its value, but there are few better stocks to stash your money in especially while earning a $2.01 dividend.

F: Ford - $2.84 | $8.79 | $1.01 | $0.00

Given current market conditions I believe that Ford is not only undervalued right now but that it has been unfairly maligned by investors that are jittery about American automobile manufacturers. Not to say there was not good reason to be wary of them in the past, but a new day has dawned and the morning sun has risen to find a resurgent Ford building the most reliable automobiles in America that are on-par with Japanese automobiles. Ford, Lincoln and Mercury had 41 out of the 44 models that Consumer Reports tested come in at average or better reliability for a score of 93%. The best news was, however, that the Ford Fusion, Mercury Milan and Ford F-150 2WD were three out of the four American automobiles that made Consumer Reports' "Most Reliable" list. Also a positive in Ford's corner is that it was managed well enough (unlike its two domestic rivals: General Motors which was managed badly and Chrysler which was managed in what might rise to criminal negligence) that it was able to decline government bailout money and that indicates that it likely has a strong foundation since Ford was in the same market as General Motors and Chrysler and its two American competitors have verbally flirted with the notion of bankruptcy. Ford is also a good "firebreak" stock because even if things become worse in the American economy it will likely only help Ford because more economic distress has a chance (perhaps a good chance) of shoving Ford's only domestic competition over the edge and into the abyss. If that were to happen, I look for Ford to pick up some serious domestic market share since they are now producing cars that are as reliable as Toyota and Honda vehicles and Ford would be the only legitimate, non-bankrupt domestic automaker left standing.

GM: General Motors - $3.62 | $24.24 | $1.27 | $0.25

If you're willing to risk your money on something that could pay off or backfire in your face (Let's face it, if you were risk averse you'd be buying government T-bills or bank CDs... Am I right?) then you could buy into General Motors. GM has not had the easiest ride for about the last 6-8 months or so. Frankly, there's about a 50-50 chance that the company will implode in a bankrupt financial black hole, hauling your shareholder dough down into its inky depths never to be seen again. Now, if you're willing to accept that level of risk we will talk about the possible upside and you can decide if this one's for you, One upside is the GM brand name. Even though GM is going to have to axe a number of sub-brands under its umbrella (it had eight before all this unpleasantness started, you know) it plans to keep four of the eight: Chevrolet, Cadillac, Buick and GMC. Saturn will be phased out by 2012 and GM is shopping the Hummer brand around. GM is still undecided how to do away with a customer favorite: Pontiac. Something that an investor must keep in mind with GM is that even though it is risky in the short term, the bet will likely pay off in the long term because if the company survives in the long term it will survive as a smaller company that is more adaptable to market conditions and it will also be a company, like Ford which is already ahead of GM in this respect, that has its foot firmly in the door of the cars of tomorrow: high mileage and low gasoline.

INTC: Intel Corp. - $15.42 | $25.29 | $12.05 | $0.56

Intel makes arguably the best processors in the world and the stock is near its 52 week low and paying out a $0.56 dividend. As computers are further drafted into the sphere of human life, continuing the trend that has seen the first true computers, WWII codebreakers, begin as big as a room to today when they have been made to be barely visible to the naked eye at times. They have made their way from specialized machines used by governments, research facilities and educational institutions to smaller and more affordable to the point that I sit here typing this article on an Apple G5 with Intel processors. They have infiltrated normal life by finding their way into thermostats where they regulate climate control in my house, auto engines where they regulate the flow of gasoline among other things and in my cell phone where it not only allows me to make calls but it keeps my calendar, my large Rolodex and my cache of text messages that I use to connect with friends and political contacts. Computers have also gone from being about one thing, cryptography, to being about practically anything where their practical applications are virtually limitless. Computers now safe the environment from the testing of nuclear weapons, which are now simulated through data collected over decades from nuclear experimentation and crunched into estimates using raw computing power. Computers also now search human DNA for abnormalities and other answers as well as running through a huge range of possible treatments for all kinds of diseases including cancer while noting the possibilities that meet requirements set by researchers and save years of experimentation by using their computing power to create a virtual experimentation environment and then speeding it up so that researchers only spend their valuable time cultivating the best possible treatments. Computers have literally changed the world by speeding up the accumulation of human knowledge. While it had previously taken centuries for the sum of all human knowledge to double it now, at the height of the computer revolution, takes only ten years. Intel is at the forefront of that revolution producing the heart of the computer: the processor, the computer's brain. When a company is the best in its field, that field is critical to the advancement of human enterprise and the stock is in the toilet because of the general dismal economic picture it is time to consider a buy.

HPQ: Hewlett-Packard-Compaq - $33.33 | $49.97 | $25.39 | $0.32

Like a dog after a horrible bout with parvovirus, HP-Compaq is slowly recovering to its former health after the plague that was Carly Fiorina's tenure at the top of the company. I'm throwing this out to my readers as the "craps" pick because I suspect if you roll the dice and buy a serious stake in this company you will either decisively win or crap out. Buy at your own risk, friends.

LMT: Lockheed-Martin - $71.28 | $120.30 | $57.41 | $1.98

One of the government's favorite military contractors whose stock price is near its 52wk low while also still being in the government's good graces. Lockheed-Martin's secretive laboratory for advanced research projects is called "Skunk Works." The very one in the same "Skunk Works" of stealth bomber fame. LM has built a stellar tradition on its spectacular aircraft and, most importantly, the Skunk Works' ability to discover a method to make aircraft nearly invisible to enemy radar. LM is known for its fine fighter aircraft. One of LM's earliest pedigrees was the brainchild of an LM genius: Kelly Johnson. The P-38 Lightning was Lockheed-Martin's first big aircraft break, cutting the most distinctive figure in the sky at the time with twin fuselage connected to one another with the main wing and a smaller rigging in the back. Two 1,000 HP Allison prop engines powered the Lightning which would go on to win Lockheed-Martin the foundation of their reputation for excellence and for being able to engineer and mass produce aircraft, vehicles, etc. to the exacting specs that the government usually needed for one reason or another. In the a la carte world of military procurement, Lockheed-Martin would prove to be one of the few chefs that the government could consistently count on to listen intently to what it needed, take the contract and then go out in the world to acquire and fashion those ingredients into cutting edge military equipment. Successors to the P-38 that illustrated Lockheed-Martin's finesse in constructing fighters include the F-16 Fighting Falcon, the F-35 Lightning II (Joint Strike Fighter) and the grand masterpiece: the F-22 Raptor. While the F-16 and F-35 are fine aircraft and certainly works of aircraft art either one pales in comparison to the F-22. The Raptor has advanced communication and radar systems that utilize thirty antenna integrated into the body of the aircraft itself, thus cutting down on the signals emanated from the aircraft and further silencing the radar signature of the plane. The plane breaks up and minimizes flat surfaces so as to deprive radar signals of anything to reflect back to their tower off of. The F-22's weapons systems are stored inside the body of the plane, only coming out when armed to deploy. This alteration makes "supercruising" (going supersonic without burning excessive fuel using afterburners) possible and "supercruising" makes the F-22 the fighter of choice as a quick responder because it can get to the location of a dogfight quickly without burning extra fuel and because of that extra fuel it can linger at the site of the dogfight much longer than any other American fighter plane. If the site of the dogfight is equidistant from both the American base of operations and the opposition's, the F-22's supercruising ability confers an unmistakable advantage as it will be able to linger on station longer than any enemy aircraft. The F-22 could even score kills by outlasting the opposition's aircraft and then pouncing when the opposition aircraft is forced to turn for home, exposing its undefended back to the F-22. The Raptor's advanced weapons systems even allow it to score kills on the enemy without a visual (or line of sight) contact. In June 2006, participating in Exercise Northern Edge at Elmendorf AFB in Alaska, the F-22 racked up an unreal 144-0 kill ratio in head-to-head action with legacy aircraft and a 97% mission capability rate. It proved itself vastly superior to any aircraft that could be fielded against it. Better than that, however, was its performance in team exercises. The Raptor showed itself to be a force multiplier by marshaling its advanced integrated avionics to improve the situational awareness of other non-Raptor aircraft on its team, making those aircraft far more effective than they would have been on their own or even in tandem with other non-Raptor aircraft.

Lockheed-Martin's real growth industry, however, is information technology. It was this strong sector that has helped to buoy the company's prospects during recent trying economic times. This department of Lockheed-Martin includes dozens of smaller companies that LM has obtained and merged together into a versatile mix that allows the IT department to handle everything from nuclear power research & SuperFund clean-up to the FBI's second attempt to digitize its records and create a paperless case file system called Sentinel. The FBI's previous attempt at digitizing its filing system resulted in a number of shortcomings but the most problematic and dangerous failing of the original was the failure of it to interact with other agency's systems and share intelligence. This fatal flaw could not be tolerated after 9/11 and this prompted the FBI to opt for a combination of Lockheed-Martin and avoid custom-made software the second time around. Lockheed-Martin also received a few years on the contract after completion of the system for maintenance. One would surmise that members of the FBI will be observing, integrating and finally replacing Lockheed-Martin personnel when it comes to fixing, upgrading and keeping the system running smoothly in general after the contract with LM expires. With the increasing reliance on computers by the military, other government branches and large multinational corporations, hacking to steal intelligence from governments and trade secrets from corporations is on a steep increase. As long as computers are integrated into the most important jobs, companies and organizations in the world, groups like LM's IT division will be needed to facilitate the networks at the beginning by building them and over the long term to protect them and, for some companies and agencies, teach members of the organization to protect them. Lockheed-Martin appears to have a very rosy future when it comes to profits.

NOC: Northrop-Grumman - $45.02 | $80.64 | $33.81 | $1.60

Northrop-Grumman is the fourth largest defense contractor in the entire world. That is in addition to being the single largest builder of naval vessels worldwide too. The company is organized in four divisions based on their specialty. The four divisions are as follows: Information & Services, Electronics, Aerospace and, finally, Shipbuilding. Shipbuilding, as you will learn, is Northrop-Grumman's primary advantage that separates it from other defense contractors like General Electric, Lockheed-Martin, etc.

Military history shows us several things about combined arms fighting and what each armament platform is useful for. Infantry is needed to put boots on the ground and occupy territory that you have captured from your enemy. Infantry is the backbone of the military because while areas may be seized without infantry the areas cannot be held without it. Armor exists to engage the enemy's armor, to punch holes in the enemy's line through which the infantry can penetrate and widen (which is how armor became a fixture on the modern battlefield when the Germans utilized such tactics in their blitzkrieg [lightning war] and when armor advances more slowly it provides infantry with much-needed cover from small caliber gunfire. Artillery is, on the modern battlefield, the secondary option through which one softens up the enemy by raining metal down on their heads. The first option for harrying the enemy with large ordnance is air cover. The reason that you see so much time and money invested in researching and developing next generation aircraft (including fighters, bombers, close air support aircraft [like the A-10 Warthog] and UAVs [unmanned aerial vehicles]) is because air supremacy is non-negotiable in battle. If you do not have control of the skies, the odds of winning are stacked heavily in your opponent's favor. Thus, America has spent much treasure and effort on developing air power that cannot be denied air supremacy. If you have control of the skies, your own infantry, armor and naval vessels can advance without being impeded by aircraft strafing or bombing them, etc. If you have control of the skies, not only are your own forces immune from being harassed from the sky but you have the ability to hamper your enemy's combat efficiency by bombing the bejeezus out of his supply & communication lines, racking up casualties on his forces before they ever arrive at the site that they expect to commence fighting with your ground forces and high military and political leaders are no longer safe either because a participant that dominates the skies can strike at a time and place of his choosing. However, as important as air power is, naval power is just as critical to a military endeavor. As Britain proved several times during its history, a navy cannot win the war for a country but it can most certainly lose it if it is not up to the task. Three well-known examples are Philip II (whose armies were commanded by the Duke of Parma), Napoleon Bonaparte and Adolf Hitler. In the first example, Philip put together the Spanish Armada in an attempt to get at Britain because the British were supplying the resources to Philip's Dutch enemies. The Duke of Parma was having success in carrying the field in battle but without a competent Spanish navy he could not take the fight to the true enemy and end the war. All that separated Parma from ending Dutch resistance was the English Channel so the Armada came to try to transport Parma and his army across the Channel. The British navy ended the threat of invasion by defeating the Armada and scattering it. The Spanish empire eventually had to yield because it could not take that final step and bring pressure on Britain. So it was in the second case that Napoleon Bonaparte had swept every single nation before him on the continent of Europe with his land forces but the British navy stymied every attempt by the French to give Napoleon's army safe conduct across the English Channel to subdue Britain. Britain's ability to hold out and maintain resistance against Napoleon through the lean years directly led to its ability to form alliances and send a multinational contingent of troops under the Duke of Wellington to Waterloo and effect Napoleon's defeat. The third example is perhaps the best-known. While Nazi Germany had effective submarines that were starving Britain out, Hitler's Operation Sea Lion could not be carried out without neutralizing Britain's Royal Navy. Hitler had not been able to build a navy on par with the Royal Navy. When Britain managed to fend off the Luftwaffe's bid to control the skies over the English Channel (and thus make it open season on Royal Navy vessels which would clear the way for an amphibious invasion of Britain), Hitler had no choice but to turn his back on the recalcitrant island nation and attack the Soviet Union. We are all aware of how that turned out. Thus is the importance of a navy.

Northrop-Grumman has the largest privately-owned naval yard in the world situated in Newport News, Virginia. This shipyard is the only one capable of building Nimitz-class aircraft carriers (called supercarriers) which displace 70,000 tons. These aircraft carriers have allowed America to project its power around the world by carrying American airpower anywhere that a ship can sail. We have used aircraft carriers in battles, parked them off the shores of non-compliant nations to "persuade" them to see our side of things and used them to give an air of security to the swaths of sea that they patrol. NG's Newport News yard is also one of two that can build submarines, which have become an integral part of the nuclear strategy of Mutually Assured Destruction that the United States uses to dissuade nuclear countries like Russia and China from a first strike on America because they have no way of knowing where our nuclear submarines are and, thus, cannot prevent them from a retaliatory strike. So it is that the American navy has insinuated itself as an irreplaceable defensive asset as well as a platform from which to fire cruise missiles at our discretion and as a secondary transport method for our ground forces. NG also builds vessels such as icebreakers for commercial, non-military sale along with other products.

On the air and space front, Northrop-Grumman is responsible for many products, just a few of which I will mention. It is responsible for the B-2 Spirit bomber as well as the Hunter UAV drone. It is also heavily involved with the ballistic missile defense shield (which never seems to die no matter which party is in control) along with the solid-state laser program which seeks to use a large laser on board a Boeing aircraft to attack enemies with directed energy. NG also builds a good deal of product for NASA's space program. One of the better-known surveillance products NG builds is the AWACS plane. It also produces night vision goggles and secure communications equipment. NG's subsidiary Remotec is also the largest producer of remote-controlled vehicles to dispose of explosive ordnance and handle toxic and hazardous materials.

Yet another aspect of Northrop-Grumman's business model is illustrated by its subsidiary Vinnell. Vinnell provides training and communication services for the military. It already has a contract to train the Iraqi Army and with the training of the Afghan Army I expect Vinnell to at least be in the running, if not win, more contracts as they become available now that the Afghan strategy appears to be shifting to an expedited training of the Afghan Army.

Since the early 1990's, Northrop-Grumman has a list of defense companies that it has merged with or acquired as subsidiaries that is as long as my arm. Don't expect NG to run out of national security-related work for the United States government any time soon, the economy notwithstanding.

BA: Boeing - $37.53 | $88.29 | $29.05 | $1.62

Boeing is the largest exporter in the United States. It is the largest aircraft manufacturer in the world. It is the second-largest aerospace and defense contractor in the world. Furthermore, Boeing has been redesigning and releasing variations on its previous 7_7 product lines that have been selling well. The 787 Dreamliner has sold very well and will continue to sell well from all indications. Boeing stumbled in its competition with its European counterparts but seems to have regained its footing. It has reorganized its assembly lines so that not as many laborers are needed to assemble aircraft and this reorganization has included vertical wing assembly. The future is being probed very carefully by Boeing, which is looking into more efficient aircraft designs including a mixture of the "flying wing" and "tube fuselage" designs. Boeing is also testing greener fuels that will create less pollution than the current jet fuel in use. It has created a number of business alliances with Brazilian firms to achieve this end because of their success in creating a biofuel economy that relies on less petroleum-based energy sources than nearly any other country. Boeing has the economy of scale and the engineering know-how to move successfully into the new economic profile of successful businesses which is to make products that are smarter (using integrated computers) and more efficient, the latter which means the products will not only consume fewer resources and thus cost less to operate but they will also be more environmentally friendly and that is a trait that is highly desired among both consumers and governments around the world at this time.

RTN: Raytheon - $39.40 | $67.37 | $33.20 | $1.12

Generally a fine stock purchase is denoted by purchasing the stock of a company that produces not the overall aircraft, vehicle, etc. but rather produces the integral electronics that are needed. At that point, you don't have to fear if, say, Lockheed-Martin or Boeing wins a contract for a warplane because the company you own will be manufacturing the internal products for it. So it is with Raytheon.

Raytheon is in on many internal components of warplanes. It produces the radar for many of them including the F-15, F/A 18, F-22 (this is going to be a major contract as time goes on because it will be difficult to top the F-22 as a nextgen fighter without years of development), B-2 Spirit bomber, and RQ-4 Global Hawk UAV. That is not to mention that Raytheon has its hand in the radar used on naval vessels, for Air Force bases and air traffic control towers. On a similar subject, Raytheon is a player in the GPS targeting equipment, the Space Tracking and Surveillance System (part of the National Missile Defense system that, as I mentioned above, just never seems to die), satellite communications over the MilSat network for Navy commanders, software that assists the pilots of UAVs to better perceive the environment of the UAV and to manage more than one UAV at a time, software to pick up radio and digital signals for use with government (like the National Security Agency's ECHELON program that monitors the world's communication networks including phone calls), semiconductors and integrated circuits for a wide range of products and purposes, an Advance Spectroscopic Portal for Homeland Security (allowing border security to look for radioactivity in containers and vehicles without opening them up) and missile defense system components including the kinetic kill vehicle which is the part of the system that slams into a ballistic missile killing it. Also in production by Raytheon is software called ABACUS (Advanced BAttlefield CompUter Simulation) and HFT (Higher Formation Trainer) to train members of the military how to handle small specialist units up to corps-sized units. Raytheon also has an arm called Raytheon Professional Services that offers training technology and expertise on a worldwide scale.

The real money for Raytheon, however, is in its missile technology and production. Raytheon manufactures a list of missiles that is a mile long. They manufacture missiles that can be fired from the air, from the sea and from the ground. They produce the missiles themselves but the huge profits are in the guidance systems, which Raytheon specializes in. They rely on integrated circuits, semiconductors and other miniature (yet incredibly powerful) targeting computer components. The beautiful thing for Raytheon's bottom line is that every time a missile is fired, the expensive guidance system is destroyed on impact. That means Raytheon gets to start all over again building a computerized guidance system that can send a missile within 3 meters of a target from hundreds of miles away. Also, Raytheon is blessed in that the United States government seems to never run out of targets and, unlike the aircraft, ships and vehicles that fire these missiles, the missiles can't be used twice. That all adds up to major $$$. Plus, Raytheon never has to worry about going hungry for R&D funds because they spend millions lobbying Congress and because Raytheon has little work outside government contracts they garner (in some years) the most funding for research from the National Science Foundation, which is the government's arm to fund research and development costs that will create technology to improve America's economic and military might.

BNI: Burlington Northern Santa Fe Railroad - $61.97 | $114.58 | $50.86 | $1.52

As you can see on this map the Burlington Northern Santa Fe Railroad controls a lot of tracks. Over 50,000 miles of them to be more accurate. If you look closely at the map, you will see that it controls railways that run from the West Coast all the way to the Mississippi River. This is a salient point because that means BNSF connects the busiest port in the United States, the Port of Los Angeles, and the second-busiest port in the United States, the Port of Long Beach, to the rest of the country by the most efficient transport system for goods: railroads. When it comes to railroads, they are like real estate: it's all location, location, location. Because BNSF straddles the two busiest ports in the Western hemisphere and provide the most bang for one's transportation buck (especially when oil prices increase as they have recently and inevitably will again) that means that BNSF will be handling the most shipping (and, thus, the largest profits) of the two largest ports in the world and it covers two thirds of the United States where trains can potentially drop off goods to be trucked to the final marketplace where they are sold to the end user. Railroads started their career off as major rainmakers because not only did they cart goods across the country but, in the age prior to interstates and air travel, they also transported everyone that did not want to hop a horse to travel from one major city to another. Their profits started to wane as the post war America emerged with its interstate highway system, cheap gasoline and air travel which was sped along by the quick development of aircraft that WWII necessitated. Railroads' profitability continued to wane. Two things conspired to change this state of affairs. The first was a major systemic change that worked its way throughout the markets of the world: containerization. The movement towards containerization began with the United States military which began experimenting with using metal containers of a uniform size towards the end of WWII. During Korea, however, was where the idea truly picked up steam. Uniform metal containers were substituted for the regular transport modes and the intermodal method reduced shipping time from the United States to the front lines in Korea by 50%. By the Vietnam War the U.S. military was almost totally containerized and then later that decade the rush towards commercial containerization was on. One containerization had taken over commercial shipping, it had made the method of transporting goods by train a very popular option. Railroads could move large amounts of goods at more efficient use of fuel and had the advantage of being able to move throughout the nation dropping off containers where they belonged and picking up cargo to be transported to a point further on. The second condition has just recently combined with full-on containerization to make railroads the most profitable means of transport for goods over long distances and that is the high cost of fuel. While we are experiencing an abatement of high fuel prices for automotive transport, the high prices are sure to return and, when they do, railroads like BNSF's profits will shoot higher as semi-trucks for transport of goods become more and more untenable for longer distances. BNSF is a winner while the economy is slumping and holding BNSF's stock price artificially lower because of investors jittery about the economic big picture. When the economy recovers, the stock will go up. The stock price will have a converse relationship to automobile fuel prices, following them upwards in price.

UNP: Union Pacific Railroad - $43.00 | $85.80 | $33.28 | $1.03

One can view Union Pacific's railway holdings in the graphic here. Unfortunately, the stock has gained approximately $6 since I chose it for this portfolio and my research to put together the cases for each stock have delayed the publication of the raw list of stocks that I am recommending.

UNP benefits from the same things that BNSF does: location of its track infrastructure, containerization, the converse relationship between railroad profits and gasoline prices. UNP has the further advantage of having more track infrastructure in the South, particularly east Texas, where the population has been growing and, thus, there will be a bigger demand for goods from the container ships at the Port of Los Angeles and the Port of Long Beach. This and the other explanations for the railroad stocks may seem short, but they all share advantages with BNSF that I have already outlined at length so I will only highlight the advantages that each company has that BNSF doesn't.

NSC: Norfolk Southern Railroad - $34.88 | $75.53 | $26.69 | $1.27

As the reader can see here the Norfolk Southern Railroad company has around 21,000+ miles of tracks. While this is substantially less than its Western competitors, NSC's railroads run through far more populous areas which makes every mile of NSC track more valuable than its competitors' that run through rural areas. Furthermore, NSC's tracks converge on the mighty ports of New York and New Jersey which bodes well for NSC. Not only can the tracks haul goods to market from the NY/NJ ports to market here in the United States, but they can also load up manufactured goods and take them to the NY/NJ ports for export. Major points of manufactured goods are the car plants (primarily foreign car manufacturers plants like the Toyota plant in Georgetown, Kentucky and others at points further south and occasionally one like the Honda plant in Greensburg, Indiana) that are concentrated in rural America. In addition, NSC benefits from the advantages conferred on the entire railroad industry as outlined under BNSF.

CSX: CSX Railway - $27.41 | $70.70 | $20.70 | $0.84

CSX has railroad tracks that cover most of the area east of the Mississippi as the reader can see here. CSX shares the railroad industry advantages that are identified in the BNSF assessment. It also shares the advantages that NSC has with regard to its western rivals of rail connections to the NY/NJ ports and the manufacturing facilities that need to move their cars via rail. CSX, however, has a distinct advantage over its three main competitors: it runs track deep into Florida. Florida is a quickly growing state and also is home to a delightful port of entry and exit to the Caribbean Sea and an alternate sea route for South American goods that do not travel the overland route through Central America or through the port at Houston, Texas.

CINF: Cincinnati Financial - $22.69 | $40.24 | $17.06 | $1.56

Cincinnati Financial is a company that I have been familiar with my whole life. This is a long-termer because it is on solid financial ground and returns a solid dividend for the $20-some you have to outlay to purchase a share of stock. The company isn't doing anything groundbreaking but, then again, that is a positive thing in this market climate.

AKS: AK Steel - $7.97 | $73.07 | $5.20 | $0.20

AK Steel is the successor to the prolific ARMCO (American Rolling Mill COmpany) steel manufacturer originally based in Middletown, Ohio. AK's largest facility is still the Middletown Works even though the headquarters have moved out. AK endured a long and rough strike with its main union but finally found an agreement. Now it has labor peace. This is easily the biggest gamble of all the stocks listed here but the price is low enough that a reasonably-sized investor can accumulate a good deal of stock to collect the dividends for years or punch out with a gain if the stock soars to even 50% of its previous high. Caveat emptor, friends.

PM: Philip Morris Intl - $37.58 | $56.26 | $32.04 | $2.08

I am extremely down on domestic tobacco stocks that rely on markets in the United States, Canada or Western Europe because the public health sector in all three regions have put cigarettes squarely in their sights and plan to eliminate smoking as best they can. The current economic crunch is offering the public health sector in these countries another chance to cut the ranks of smokers by raising the cigarette tax substantially to make up for lost tax revenue and accomplish their aim of eliminating smoking as a habit among their citizens. That is why I have only chosen stocks that sell to the third world, specifically countries in Africa, the Middle East and South America that sell the United States or Great Britain oil and look to import a product to help even the trade imbalance. Africa and South America smoke their fair share of cigarettes but the Middle East smokes like a chimney. Since the Middle East has the most oil to sell, it stands to reason that they are most likely to import cigarettes since their citizens love to smoke and most of their countries are not acceptable to cultivate tobacco and their citizens have had American and British cigarette brands hammered into their heads through movies and other media-driven demand. In the three regions that I mentioned, it is not illegal to advertise cigarettes on television nor is it illegal to advertise cigarettes to children with children-friendly characters. Everything that tobacco companies did 50 years ago in America that sold cigarettes is still fair game to practice in the Middle East, Africa and South America. In addition to this, China's cigarette market is nationalized right now so the 1.7 trillion cigarettes that the Chinese smoke per year are not included in market estimates nor are they considered to be a part of the global tobacco market since China is not free to import foreign cigarettes. It is likely that when China's cigarette industry is opened to foreign brands that the advanced marketing strategies, better quality and recognized brand names of cigarettes made by companies like BTI, RAI and PM will seriously cut into the formerly nationalized Chinese cigarette company. PM also has both value brands and fine brands that consumers of different tastes can buy which doubles the chances that PM will sell to a consumer looking for cigarettes. A final advantage is that when hard times hit, people want to smoke more to relieve stress.

RAI: Reynolds American - $36.53 | $62.49 | $31.55 | $3.40

While I am down on domestic cigarette companies, I make an exception for RAI. Why? Because RAI has an impressive selection of smokeless tobacco products that the public health sector is not out to quash like they are smoking. Also, it has a recent history of a higher stock price and it has a great dividend to boot. I think that RAI has the brands to survive long term selling to current smokers and the smaller number of people that begin smoking which makes it worth holding for the dividend and possibly to wait for a price to sell.

TAP: Molson Coors - $35.37 | $59.51 | $31.13 | $0.80

The dividend isn't great on this but if there is one thing that people will always buy regardless of economic difficulties it is beer. A number of fairly popular brands are accumulated under this company's aegis. The recession may increase their sales even. It could be worth taking a chance on.

BTI: British American Tobacco - $43.89 | $56.26 | $32.04 | $1.54

BTI markets four major brands globally: Dunhill, Kent, Lucky Strike and Pall Mall. Lucky Strike and Pall Mall are both fairly recognizable brands. BTI is basically a riskier version of PM because, while it is a tobacco company that markets its products everywhere but the places hostile to smoking, it has only two recognizable brands while PM had seven. Look to PM for foreign tobacco advantages not listed here.

CHDN: Churchill Downs - $30.84 | $52.98 | $20.71 | $0.50

Churchill Downs is the home of the Kentucky Derby. Buy up a block of this stock, hunker down, collect your dividends and wait for a Triple Crown winner. When the next horse wins the Triple Crown I suspect it will make horse racing popular again and if you are willing to hold for the long term, a decade of Triple Crown winners like the 1970's could push this stock price way up.

CSH: Cash America - $16.02 | $48.86 | $11.60 | $0.14

Cash America is the largest chain of pawn brokers in America and possibly the world. People need ready cash during this recession which means $$$ in Cash America's pocket. Not a great dividend but a fairly decent chance of making capital gains on it by the end of the recession.

Back To Top