stock picks

The volatile markets of the past few years have offered up many tempting stocks at bargain prices. But it’s important to remember that not all bargain stocks are created equal. Investment success depends more on the quality of your investments than on the price you pay for them. That’s why you have to be very selective about which undervalued stocks you buy....

The best way to profit in the stock market in times of volatility is to stick with the high-quality stocks we recommend. These stocks generally bounce back faster when the stock market rebounds. Here are nine key factors that we always take into account when we do the stock research to uncover high-quality investments. Financial factors:

• 5 to 10 year history of profit. Companies that make money regularly are safer than chronic or even occasional moneylosers.
• 5 to 10 years of dividends. Companies can fake earnings, but dividends are cash outlays. Our stock research has proved time and again that if you only buy dividend-paying stocks, you’ll avoid most frauds.
• Manageable debt. When bad times hit, debt-heavy companies go broke first.

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Toromont Industries Ltd., symbol TIH on Toronto, is a distributor of a broad range of Caterpillar and industrial equipment. As well, its CIMCO division makes refrigeration systems. Toromont is one of the growth stocks we analyze in Stock Pickers Digest. In the three months ended June 30, 2011, this Canadian stock pick’s revenue rose 9.3% to $344.6 million from $315.3 million a year earlier, due to higher new equipment sales and increased rental revenue....

Precision Drilling Corp., Toronto symbol PD, provides contract-drilling services to oil and gas producers. The company owns 360 drilling rigs in Canada, the U.S. and Mexico. We analyze Precision in The Successful Investor, our newsletter that recommends stock picks for conservative investors. Precision recently converted from an income trust to a regular corporation. Investors received one common share for each trust unit they held. The change was in response to Ottawa’s new tax on income-trust distributions, which came into effect on January 1, 2011....

In the August 5, 2011, Wall Street Stock Forecaster hotline, we updated our buy/sell/hold advice on one of our long-time top stock picks, Kraft Foods Inc. (symbol KFT on New York). Kraft is the world’s second-largest food company, after Switzerland-based Nestle. Its owns many well-known brands, including Philadelphia cream cheese, Maxwell House coffee, and Oscar Mayer meats Kraft just announced plans to break itself into two separate, publicly traded companies. One company will sell snack foods, such as Oreo cookies, Cadbury chocolates, Trident gum and Tang powdered beverages. This business will have annual sales of $32 billion, with 42% of that coming from fast-growing markets, such as China, Brazil and India....

We’ve had a lot of success over the years with the high return investments we recommend in Stock Pickers Digest, our newsletter for aggressive investing. Of course, aggressive picks have the potential to give you bigger gains than your conservative selections. Still, aggressive stocks are best suited to investors who can accept substantial risk in the portion of their portfolios that they devote to these types of investments. You can be wrong on any of your stock picks, of course. But when you’re wrong on a speculative stock, your losses are likely to be bigger than they would be with a well-established company....

Domino’s Pizza Inc., symbol DPZ on New York, is the world’s largest chain of pizza stores that offer takeout and delivery. Domino’s operates 9,379 stores in the U.S. and over 70 other countries. Franchisees run most of these outlets. Domino’s is one of the growth stock picks we analyze in Stock Pickers Digest, our newsletter for aggressive investing. In the three months ended June 19, 2011, the growth stock pick’s earnings rose 11.5%, to $25.2 million, or $0.40 a share. A year earlier, it earned $22.6 million, or $0.37 a share. Sales rose 6.2%, to $384.9 million from $362.4 million. Same-restaurant sales rose 4.5% in the U.S. and 7.4% internationally. The consensus estimates were for earnings of $0.36 a share on sales of $372 million....

Hidden value is one of the key factors we look for when we’re looking for winning stock picks to recommend in our investment advisories, including Wall Street Stock Forecaster, our newsletter for investing in the U.S. markets. By hidden value, we mean valuable assets that are not getting the attention they deserve from investors. Here’s how that can translate into making winning stock picks: When a company’s assets are wholly or partially hidden, the stock trades for less than it’s really worth, so you get to buy at a bargain price....

I hope you are enjoying and profiting from our free TSI Network daily updates. Our dailies aim to educate you on the best practices in investing. They cover a range of investment topics—from how to make the best value stock picks to gold investing and capital gains tax—and explain conservative investment strategies you can use to grow your wealth with less risk. ...

AlarmForce Industries, symbol AF on Toronto, reported record quarterly revenue of $10.1 million in the three months ended April 30, 2011. That’s up 10.3% from $9.2 million a year earlier.

AlarmForce is one of the stocks we analyze in Stock Pickers Digest, our newsletter that helps you make hot stock picks for the part of your portfolio you devote to aggressive investing.

Earnings fell 9.2%, to $949,000, or $0.08 a share, from $1.0 million, or $0.09 a share....