The Motley Fool's Weekly Editors' Picks
Fools were out and about this past week in an investing world jam-packed with actions and ideas. Here are three articles you might find useful as you decide how to invest your money.
Ford Returns to Investment Grade
Fool analyst John Rosevear brought the good news that analysts at Fitch Ratings have taken a look and found that Ford (NYS: F) is well-positioned to keep on trucking during a severe economic downturn. "The upgrade [of its credit rating] ... marks Ford's first visit to the exalted land of the creditworthy since its debt was downgraded to 'junk' status in 2005," John wrote.
He goes on to explain what this means for the company. Benefits include:
- Ford will pay less to borrow money.
- Ford could restructure its debt, which could save it hundreds of millions of dollars a year.
- More institutional investors, like mutual funds and pension funds, will be able to invest in Ford bonds.
For individual owners of Ford stock, the upgrade is a gold star in the turnaround process, John wrote. He noted that one of the things working in Ford's favor is that while competitors including General Motors and Toyota reduced spending when times got tough, Ford, "which had borrowed everything it could back in 2006, was able to keep development going at full speed even during the worst of the economic crisis."
Read the article for more insight into the situation at Ford.
3 Stocks to Buy Today and Tuck AwayFool analyst Jason Moser picked out three stocks he would be comfortable buying as long-term investments for his young daughters. Pharmaceuticals powerhouse Pfizer (NYS: PFE) muscled its way onto Jason's list partly because of its size. "The scale, I think, is their big competitive advantage," Jason wrote. "They can always really keep research going." The company has a bustling pipeline of potential drugs, lots of cash on its balance sheet, and a nice 4% dividend yield, he noted.
Fool favorite Berkshire Hathaway (NYS: BRK.A) also distinguishes itself as a stock Jason would be happy to "buy today and tuck away." Jason is confident Warren Buffett's recent diagnosis of prostate cancer won't be an impediment to the man or the company. Jason likes Berkshire's diversity, its potential to benefit from economic recovery, and its culture. He also favors Berkshire's investment in its "Big Four" stocks: Coca-Cola,Wells Fargo,American Express, and IBM. In hisannual letter to shareholders, Buffett said, "We view these holdings as partnership interests in wonderful businesses, not as marketable securities to be bought or sold based on their near-term prospects."
Watch the video to find out the third stock on Jason's list of long-term winners. It's likely to be more popular with his kids than Pfizer or Berkshire Hathaway.
3 Great Strategies for Surviving Without Social SecurityPeople who plan to stop working someday should take advantage of any 401(k) plan offered through their job, contributing at least enough to get any matching funds their employer offers, Fool analyst Nicole Seghetti advises. But there's more.
A Roth IRA is another good tool, Nicole notes. "Consider more aggressive, growth-oriented investments for funding your Roth IRA since they afford you the best tax-free bang for your investment buck," she wrote. "This is especially true for young investors who have more time for the tax-free growth to compound." She believes Apple (NAS: AAPL) and Google are "fantastic growth stocks" to consider for a Roth.
Apple reported a stupendous quarter this week. Nicole noted improvements in gross margin and $14 billion in cash flow from operations. "The company has a ton of cash and still appears a good value considering its five-year expected PEG ratio of 0.65," she wrote. She credits it and Google with "great management ..., fantastic sales and earnings growth, and valuations which continue to entice."
Read the article for more insight, including information about an option Nicole considers a "Roth IRA on steroids."
For a little more help building a solid portfolio, check out this free Motley Fool report: "3 Stocks That Will Help You Retire Rich."
At the time this article was published Fool online editor Kris Eddy owns no shares of any stocks mentioned in this article.The Motley Fool owns shares of Berkshire Hathaway, Coca-Cola, Google, Ford, Wells Fargo, Apple, and IBM, as well as having created a covered strangle position in Wells Fargo.Motley Fool newsletter serviceshave recommended buying shares of Coca-Cola, Ford, Google, Apple, General Motors, Wells Fargo, Pfizer, and Berkshire Hathaway; writing a covered strangle position in American Express; creating a synthetic long position in Ford; and creating a bull call spread position in Apple. The Motley Fool has adisclosure policy.We Fools don't all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. Try any of our Foolish newsletter servicesfree for 30 days.
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