U.S. Markets open in 8 hrs 15 mins
  • S&P Futures

    4,059.50
    -86.75 (-2.09%)
     
  • Dow Futures

    33,521.00
    -662.00 (-1.94%)
     
  • Nasdaq Futures

    13,000.50
    -345.50 (-2.59%)
     
  • Russell 2000 Futures

    2,134.20
    -69.10 (-3.14%)
     
  • Crude Oil

    63.78
    -2.30 (-3.48%)
     
  • Gold

    1,819.90
    -16.20 (-0.88%)
     
  • Silver

    27.10
    -0.56 (-2.03%)
     
  • EUR/USD

    1.2080
    -0.0072 (-0.5919%)
     
  • 10-Yr Bond

    1.6950
    +0.0710 (+4.37%)
     
  • Vix

    28.25
    +6.41 (+29.35%)
     
  • GBP/USD

    1.4057
    -0.0087 (-0.6171%)
     
  • USD/JPY

    109.6200
    +1.0000 (+0.9206%)
     
  • BTC-USD

    49,436.08
    -1,401.98 (-2.76%)
     
  • CMC Crypto 200

    1,468.19
    -95.64 (-6.12%)
     
  • FTSE 100

    7,004.63
    +56.64 (+0.82%)
     
  • Nikkei 225

    28,147.51
    -461.08 (-1.61%)
     

A Trio of Stock Picks for the 'Buy and Hold' Approach

  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
GuruFocus.com
·4 min read
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.

- By Alberto Abaterusso

The GuruFocus business predictability rating ranks companies on a five-star scale, defining the more predictable companies as businesses whose revenue per share and Ebitda per share are going up steadily and who have produced a strong long-term performance of their stock prices.

Thus, an investment strategy based on a "buy and hold" approach could achieve a great rate of success if applied to stocks with a high GuruFocus business predictability rating. Value investors may be interested in the following three companies, as they have high business predictability ratings from GuruFocus.


Texas Pacific Land Corp

The first company that makes the cut is Texas Pacific Land Corp (NYSE:TPL), a Dallas, Texas-based administrator of various land and related mineral resources in West Texas.

Texas Pacific Land Corp's business has a high score of 4.5 stars out of a total of 5 stars for its predictability rank. The company saw the revenue per share grow by 41.80% and the Ebitda per share grow by 43.10% on average every year over the past 10 years.

A Trio of Stock Picks for the 'Buy and Hold' Approach
A Trio of Stock Picks for the 'Buy and Hold' Approach

The share price ($1,541.34 at close on Thursday ) represents a more than 33-fold increase from 10 years ago. The stock has a market capitalization of $11.95 billion.

A Trio of Stock Picks for the 'Buy and Hold' Approach
A Trio of Stock Picks for the 'Buy and Hold' Approach

GuruFocus assigned a financial strength rating of 7 out of 10 and a profitability rating of 10 out of 10 to the company.

The price-earnings ratio is 58.99 versus the industry median of 14.96, the enterprise-value-to-Ebitda ratio is 44 versus the industry median of 10.28 and the price-sales ratio is 35.28 versus the industry median of 1.17.

As of March, Wall Street sell-side analysts recommend a median rating of overweight for the stock.

McGrath RentCorp

The second company that matches the criteria is McGrath RentCorp (NASDAQ:MGRC). Based in Livermore, California, the company rents and sells relocatable modular buildings, liquid and solid containment tanks and boxes, portable storage containers and electronic test equipment to businesses in the U.S. and internationally.

McGrath RentCorp's business has a good score of 3.5 stars out of a total of 5 stars for its predictability rank. The company saw the revenue per share grow by 6.6% and the Ebitda per share grow by 5.40% on average every year over the past 10 years.

A Trio of Stock Picks for the 'Buy and Hold' Approach
A Trio of Stock Picks for the 'Buy and Hold' Approach

The current share price ($83.77 as of Thursday) has risen by 210.26% over the past 10 years for a market capitalization of $2.02 billion.

A Trio of Stock Picks for the 'Buy and Hold' Approach
A Trio of Stock Picks for the 'Buy and Hold' Approach

GuruFocus assigned a financial strength rating of 5 out of 10 and a profitability rating of 8 out of 10 to the company.

The price-earnings ratio is 20.19 compared to the industry median of 22.97, the enterprise-value-to-Ebitda ratio is 9.52 versus the industry median of 12.57 and the price-sales ratio is 3.59 versus the industry median of 1.23.

As of March, Wall Street sell-side analysts recommend a median rating of buy for the stock.

American Tower Corp

The third company that matches the criteria is American Tower Corp (NYSE:AMT), a Boston, Massachusetts-based specialty real estate investment trust holding a portfolio of more than 180,000 communications sites.

American Tower Corp's business has a high predictability rank of 4 out of a total of 5 stars. The company saw the revenue per share grow by 14.20% and the Ebitda per share grow by 13.50% on average every year over the past 10 years.

A Trio of Stock Picks for the 'Buy and Hold' Approach
A Trio of Stock Picks for the 'Buy and Hold' Approach

The current share price ($223.58 as of Thursday) has risen by nearly 380% over the past 10 years for a market capitalization of $99.14 billion.

A Trio of Stock Picks for the 'Buy and Hold' Approach
A Trio of Stock Picks for the 'Buy and Hold' Approach

GuruFocus assigned a financial strength rating of 3 out of 10 and a profitability rating of 8 out of 10 to the company.

The price-earnings ratio is 58.87 versus the industry median of 21.24, the enterprise-value-to-Ebitda ratio is 29.92 versus the industry median of 20.62 and the price-sales ratio is 12.37 versus the industry median of 8.09.

As of March, Wall Street sell-side analysts recommend a median rating of overweight for the stock.

Disclosure: I have no position in any security mentioned.

Read more here:



Not a Premium Member of GuruFocus? Sign up for a free 7-day trial here.

This article first appeared on GuruFocus.