To make money in the market, you can take two basic routes: buy low and sell high, or buy high and sell higher. The first is preferred by classic value investing, while the second is favored by growth investors, and, at the extremes, momentum investors.
Today, the latter is a tough route to travel; there’s far too much fear in the market to sustain prolonged advances. Thus, to select today’s featured stock, I went hunting for a value play.And I had a good time! The four final contenders included a well-known toy company, a well-known tax-preparation company, a well-known automobile manufacturer (all of which pay big dividends) and an unknown chemical conglomerate (which, having come out of bankruptcy five years ago, doesn’t pay a dividend).
In the end, I settled on the auto manufacturer, whose stock is currently recommended by three of our advisories—Cabot Dividend Investor, Cabot Benjamin Graham Value Investor and the recently launched Smart Investing in Turbulent Times, whose lead analyst, Crista Huff, recently wrote, “The huge dividend yield is going to bring new money into the stock during the market downturn.”
This is an excerpt from Cabot Stock of the Month, which features the best stock to buy right now. Each recommendation is hand-selected from those recently researched and recommended by Cabot analysts. Editor Timothy Lutts explains why it’s the single best stock to buy in the current market environment. This publication is a great introduction to Cabot’s services.