Stock Picks for Conservatives

 | Sep 27, 2012 | 7:30 AM EDT
  • Comment
  • Print Print
  • Print
Stock quotes in this article:






Earlier this week, for those who believe their political leanings can help dictate how the economy can get moving forward, I availed readers of some solid picks out of the most liberal-leaning U.S. states, according to a February Gallup poll. This week's column is geared toward more conservative-oriented readers, featuring companies headquartered in Utah and Louisiana -- two of the five most right-leaning states in the country.

Salt Lake City-based Usana Health Sciences (USNA) sells nutritional, diet and personal care products via a network of 222,000 independent distributors. It uses the direct-selling model: It sells to distributors who, in turn, sell to consumers. About three-quarters of its sales come from outside the U.S.

When I choose stocks to recommend, I use automated strategies that mirror the strategies used by some of Wall Street's greatest investors -- and the strategy based on the writings of Joel Greenblatt gives high grades to Usana. Using the thousands of stocks in our database, including those listed on the New York Stock Exchange and the Nasdaq, this strategy ranks stocks based on their earnings yield and return on total capital. Then, in a final ranking, it combines the rankings of these two variables.

Usana ranks No. 164 for its earnings yield, No. 95 for its return on total capital and an impressive No. 32 for a combination final ranking. A stock with such a strong double-digit final ranking is certainly worth considering as an investment.

Albemarle (ALB), headquartered in Baton Rouge, La., is a specialty-chemical company that develops, manufactures and markets complex chemicals and chemistry solutions.

Albemarle earns a strong recommendation from a strategy based on the thinking of Peter Lynch. This stock screen focuses on the P/E/G ratio, which is price to earnings relative to growth. The metric needs to be at 1.0 or lower in order to garner the highest rating, and 0.5 or less is considered particularly strong. Albemarle's P/E/G is just a hair off this most desirable territory, at 0.51, based on the average of the three-, four- and five-year historical earnings-per-share growth rates. Albemarle is producing some excellent investment "chemistry," as well as physical chemicals.

Finally we have Nu Skin Enterprises (NUS) -- which, like Usana, is based in Utah and uses the direct sales model. This company, whose headquarters are in Provo, sells personal-care products and nutritional supplements through 890,000 independent distributors.

Nu Skin, like Albemarle, has earned approval from the Lynch strategy. The company's P/E/G is deeply into very desirable territory, with a value of 0.37. That is impressive. In addition, the company is managing its inventories well.

These three companies come from very conservative soil. If such politics and economics are to your liking, and you lean conservatively, take a close look at all of them. Yet even if you trend left, these companies still represent good investments.



News Breaks

Powered by


Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data provided by Interactive Data. Company fundamental data provided by Morningstar. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by Interactive Data Managed Solutions.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

IDC calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.