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If you have a long-term investment horizon, then focusing on stocks with staying power can be a great way to build wealth. These overlooked long-term stocks usually have strong industry moats or sticky products and services for their customers. Even if they don’t provide the same hyper-growth as high-flying tech stocks, they usually come with less volatility and greater peace of mind.
When we use the term secret stocks, it does not necessarily mean unknown companies. Rather, when the bright lights shine on the same high-profile companies, these secret stocks offer a less-crowded trade and strong, longer-term performance without any of the headlines. Here are three secret stocks we believe can help your portfolio grow for years to come.
Champion Of Copper: Freeport-McMoran (FCX)
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Freeport-McMoran (NYSE:FCX) has long been viewed as just another precious metal mining company. While many focus on mining gold, FCX has emerged as the world’s largest copper miner. Wall Street analysts can see the light with FCX, providing a one-year price target range of $41.62 to $55.49. While this only implies about a 10% upside, these targets will likely be revised as the price of copper continues to rise.
You might be wondering what all the excitement is about copper. With the recent surge in demand for data centers to power artificial intelligence (AI) and machine learning technologies, investors are realizing that we’re going to start needing a lot more copper. Nvidia (NASDAQ:NVDA) announced earlier this year that they are moving from fiber optic cables to copper wiring in its data centers. Not to mention, copper is a critical component in other technologies like electric vehicle batteries and renewable energy infrastructure.
The stock has seen an uncharacteristic spike in price this year, already gaining 22.4% in 2024. This has caused its stock multiples to increase as shares now trade at 32x forward earnings and 3.1x sales. These are historically high for FCX, although, with rising demand for copper, the company should easily be able to grow into these multiples.
Tech Titan Resurging: Dell Technologies (DELL)
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Investors who have been around for a couple of decades might be wondering why Dell Technologies (NYSE:DELL) is trending again. In recent weeks, Dell has been rejuvenated and is trading at all-time high prices. Analysts on Wall Street are expecting more from Dell as the stock has a street-high price target of $197.00 which is about 25% higher than its current price.
So what has Dell’s stock hitting new all-time highs in 2024? Like FreePort-McMoran, Dell is also benefiting from the emergence of the AI industry and a friendly shoutout from an old friend at Nvidia. Nvidia’s CEO Jensen Huang has always had a soft spot for Dell which used Nvidia’s chips in its laptops when others would not. Huang has returned the favor by suggesting that Dell builds the best enterprise end-to-end systems and that the company is a key to widespread AI adoption.
For the first time in a long time, Dell’s stock is seeing some price multiple expansion. Shares are trading at their highest levels in years at 21x forward earnings and 1.3x sales. Investors likely want to see Dell prove it before they believe it but as long as it can stick with Nvidia, the stock should continue to do well.
Unearthing the Strength of Waste Management (WM) as a Long-term Stock
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Amidst the vast expanse of the stock market, there lies an overlooked gem, often buried amidst the hype and hoopla of more flamboyant counterparts. Waste Management (WM), a stalwart in the waste and recycling industry, emerges as a beacon of stability and resilience in a world of volatile equities.
The Bulwark of Waste Management (WM)
Waste Management stands as the unrivaled titan in the waste and recycling domain, commanding a significant market share as the largest player by market capitalization. A darling of Wall Street aficionados, Waste Management currently languishes below the beckoning call of price targets, with its stock trading shy of $210, a level beneath the glowing average target of $228.16.
Tallying an impressive 53% share of the American waste removal market, Waste Management’s allure rests not merely on waste collection but transcends into pioneering territories. The company’s foray into energy generation through the conversion of landfill gases (LFG) into a viable energy source and the conscientious shift to compressed natural gas (CNG) vehicles herald a new dawn in sustainable waste practices.
Resilience and Reward
While seemingly lost in the shadows of overlooked long-term stocks, Waste Management boasts a track record of rewarding its shareholders handsomely. Over the last half-decade, WM has proffered returns exceeding 90%, coupled with a generous 8.5% compound annual growth rate (CAGR) for dividends. The stock trades at a forward earnings multiple of 29x and a sales multiple of 4x, aligning harmoniously with its historical valuation metrics. This semblance holds true even as revenue charts a steady growth trajectory at a 7.0% CAGR over the past five years.
As investors navigate the tumultuous seas of the stock market, overlooking stalwarts like Waste Management (WM) could be akin to ignoring the sturdiness of a lighthouse in a storm. In an era where sustainability and corporate responsibility take center stage, Waste Management emerges as a beacon of unwavering commitment towards a cleaner, greener future.
Embrace the resilience, reap the rewards, and consider the steadfastness of Waste Management as a cornerstone in a well-diversified investment portfolio.
