best stocks

Royal Dutch Shell plc (ADR), $76.69, symbol RDS.A on New York, (ADRs outstanding: 1.8 billion; Market cap: $137.9 billion; www.shell.com), owns interests in the many companies that make up the Royal Dutch Shell Group. Together, these companies are engaged in various aspects of the oil and gas industry around the world. Shell also has interests in chemical companies and other energy-related businesses. As well, it owns about 45,000 service stations worldwide. Shell recently completed two major projects in the Middle East: the Pearl gas-to-liquids (GTL) plant in Qatar, which is the world’s largest; and the Qatargas 4 plant, also in Qatar. This is Shell’s first entry into Qatar’s liquefied natural gas (LNG) industry. Shell now participates in LNG supply projects in seven countries. These projects will add growth in an area that had been sluggish for the company....

Genuine Parts Co., symbol GPC on New York, distributes auto parts through more than 5,700 NAPA Auto Parts stores in the U.S. and 690 wholesalers in Canada. The company also distributes industrial parts, office furniture, and electrical equipment. We analyze Genuine Parts in Wall Street Stock Forecaster, our newsletter that helps you find the best stocks in the U.S. markets. In the three months ended March 31, 2011, Genuine Parts earned $126.5 million. That’s up 25.7% from $100.6 million a year earlier. Earnings per share rose 27.0% to $0.80 from $0.63, on fewer shares outstanding....

We’ve long relied on these three tips to find the best stocks to recommend in our investment services and newsletters, including our flagship advisory, The Successful Investor. We think they can help you pick winners, too. 1. Some of the best stocks have hidden assets: By hidden assets, we mean assets that are getting less investor attention than they deserve. When assets are wholly or partly hidden or ignored, a stock trades for less than it’s worth. So buyers get a bargain. These are also some of the best stocks for attracting takeover bids from corporate acquirers, who are usually looking to buy asset bargains, just like us.

Hidden assets can consist of real estate or underused brand names. For example, companies often carry their real-estate assets on the corporate books at its purchase price, even though its value has multiplied many times over the years.

Research and development spending by technology stocks is one of today’s best-hidden assets. High research and development budgets let tech stocks keep adding profitable new products to their lines and improving existing ones.

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You need to look at each conglomerate on a case-by-case basis. Here are some examples: Power Financial holds majority interests in Great-West Lifeco and Investors Group. We see both Great-West and Investors Group as buys. However, Power Financial also has a large stake in Pargesa Holding S.A. of Europe. Pargesa, in turn, has large interests in a group of major European media, energy, utilities and specialty minerals companies. We don’t have the same confidence in these holdings as we do in Great-West Lifeco and Investors Group. So we think investors should stick with Great-West and Investors Group — the highest-quality segments of Power Financial’s holdings. We don’t recommend Power Financial....

In our July 27 Hotline, I said the market downturn could go on till October. I felt it could ultimately knock another 5% to as much as 15% off the market indexes, from July 27 levels. However, I felt the index losses would be temporary and markets would go to new highs in 2008. I also felt speculative areas would suffer most of the lasting damage. Risk is always higher in speculative stocks, and prices of many speculatives have risen out of proportion to value. That’s still how I see things. The market has had some really jolting down days in the past month, but the overall situation is unchanged....