Free Annual Reports
Naughty Stocks For A Nice Portfolio
Unless a lump of coal is your idea of a good Christmas gift, it pays to be nice rather than naughty around this time of year. You'll just have to hope that Santa isn't checking your stock portfolio, however, as the "naughty stocks" are doing quite well lately.
IN PICTURES: 9 Simple Investing Ratios You Need To Know
The term "sin stock" is used loosely, but it usually refers to companies that engage in the sale of weapons, alcohol, gambling, tobacco, or pornography. Over time many investors have taken a liking to sin stocks because these stocks are seen as sheltered from the business cycle and the whims of the market. Basically, in good times or bad, people will still, smoke, drink, gamble, shoot each other etc.
With that in mind, below is a list of five sin stocks worthy of follow-up research.
Will GD Keep Moving with the Market?
Even when the United States is not engaged in a major conflict, it still needs weapons that act as a deterrent. Enter General Dynamics. The company supplies things like tanks, fighting vehicles and ammo. If you want something dead, General Dynamics' only question is "how dead do you want it?" To balance out the business, it also makes business jets with its Gulfstream Aerospace segment.
To be clear, the stock hasn't had a great year. Investors have only seen the price of their shares rise 2.5% this year, while the S&P 500 is up just under 12%. This stock is flying under the radar and it is likely to be a good addition to a diversified portfolio in 2011.
General Dynamics is also coming off a decent third quarter. It earned $1.70 a share, topping analyst expectations of $1.65 per share. Management also raised its guidance for its full-year EPS. (To learn more, read Can Earnings Guidance Accurately Predict The Future.)
Bottom Line
Sin stocks are no guarantee of safety in a down market, but they can be a good addition to a diversified portfolio. The key is to do your homework, and look for stocks that are truly immune to the ups and downs of the market. Should ethics play a role in portfolio building? To learn more, read Socially Responsible Investing Vs. Sin Stocks. Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!
IN PICTURES: 9 Simple Investing Ratios You Need To Know
The term "sin stock" is used loosely, but it usually refers to companies that engage in the sale of weapons, alcohol, gambling, tobacco, or pornography. Over time many investors have taken a liking to sin stocks because these stocks are seen as sheltered from the business cycle and the whims of the market. Basically, in good times or bad, people will still, smoke, drink, gamble, shoot each other etc.
With that in mind, below is a list of five sin stocks worthy of follow-up research.
|
Company |
Market Capitalization |
|
Constellation Brands (NYSE:STZ) |
$4.5 B |
|
Diageo (NYSE:DEO) |
$45.99 B |
|
General Dynamics (NYSE:GD) |
$26.43 B |
|
Northrop Grumman (NYSE:NOC) |
$18.87 B |
|
WMS Industries (NYSE:WMS) |
$2.6 B |
|
Data from market close December 14, 2010 |
|
Will GD Keep Moving with the Market?
Even when the United States is not engaged in a major conflict, it still needs weapons that act as a deterrent. Enter General Dynamics. The company supplies things like tanks, fighting vehicles and ammo. If you want something dead, General Dynamics' only question is "how dead do you want it?" To balance out the business, it also makes business jets with its Gulfstream Aerospace segment.
To be clear, the stock hasn't had a great year. Investors have only seen the price of their shares rise 2.5% this year, while the S&P 500 is up just under 12%. This stock is flying under the radar and it is likely to be a good addition to a diversified portfolio in 2011.
General Dynamics is also coming off a decent third quarter. It earned $1.70 a share, topping analyst expectations of $1.65 per share. Management also raised its guidance for its full-year EPS. (To learn more, read Can Earnings Guidance Accurately Predict The Future.)
Bottom Line
Sin stocks are no guarantee of safety in a down market, but they can be a good addition to a diversified portfolio. The key is to do your homework, and look for stocks that are truly immune to the ups and downs of the market. Should ethics play a role in portfolio building? To learn more, read Socially Responsible Investing Vs. Sin Stocks. Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!
by
Investopedia Staff
Investopedia.com believes that individuals can excel at managing their financial affairs. As such, we strive to provide free educational content and tools to empower individual investors, including thousands of original and objective articles and tutorials on a wide variety of financial topics.
Free Annual Reports
http://sp.fastclick.net/ad/tr/10858-64082-15546-0?mpt=6bad0595f7345ae5f267e08f7cda4e4d
