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Tuesday, June 12, 2007
3 U.S Stocks to hold forever
McDonald's (MCD)
With more than 30,000 restaurants in more than 100 countries, you might think that most of McDonald's growth has already happened.
But that's not necessarily so. For years, while consumer tastes evolved, McDonald's was stuck in neutral, offering, in essence, the same menu it started with in 1955. But that's no longer the case. McDonald's now gets it. New menu items have spurred sales growth, and more are on the way. Look for continued domestic sales growth for the next few years as McDonald's learns to upscale its menu.
Looking abroad, only 3% of McDonald's sales come from Latin America, and only 16% from Asia and other developing areas. So there are plenty of expansion opportunities outside the United States.
Chevron (CVX)
With surging demand from the emerging economies, world energy consumption will continue to head higher for the foreseeable future. So, even if oil prices stay put, increasing production levels will drive oil company profits up.
Chevron, the world's second largest player behind ExxonMobil, engages in every aspect of the energy industry from exploration and production to retail marketing. Thus, either Chevron or ExxonMobil would be a good proxy for the entire industry.
Chevron is favourable over ExxonMobil because it has a 50% stake in a huge deep-water petroleum pool under the Gulf of Mexico. The existence of that pool, potentially the biggest U.S. oil discovery since Alaska's Prudhoe Bay, was only recently confirmed. Chevron also holds interests in several other recent major oil and natural gas discoveries.
Starbucks (SBUX)
Starbucks operates or licenses more than 8,800 retail coffee shops in the United States and plans to grow that number to around 15,000. The company recently annouced its aim to have 40,000 stores worldwide. Starbucks also plans to increase sales by adding new food or gift items to its store mix, as well as developing new products such as ice creams and liquors that would be sold in other venues.
Starbucks has been successful at exporting its concept overseas. Its coffee has even caught on in Britain, where tea is the national beverage. It already has more than 500 outlets there. Starbucks has opened a couple of hundred outlets in China. If the concept catches on with China's emerging middle class, the possibilities are huge.
So there we have it. 3 stocks that command great respect.
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