Tuesday, August 21, 2007
Johnson Controls: 'Stable and dependable'
“Given the market’s wild action, I’ve been favoring stocks with low volatility, such as our latest buy: Johnson Controls (NYSE: JCI),” says Neil Macneale in his 2-for-1 newsletter.
“It's very hard to get a good night's sleep if you have a big stake in the stock market these days. And while our portfolio has been outperforming the market, that does not fully calm the jitters caused by the crazy volatility in the market.
“My advice is to try to ignore the day to day or even month to month gyrations in your stocks, and keep your eye focused on the big picture somewhere out there in the future. I know it's hard but impulsive actions now will separate the ‘players’ from the true long-term investors.
“Based on our proprietary ranking formula, Johnson Controls (NYSE: JCI) will be added to our 2-for-1 portfolio as this month's new recommendation. The stock’s low beta of 0.70 (or 70% of the market’s volatity) should help.
"Our portfolio holdings are chosen from those stocks that have split their shares 2-for-1 in the previous month. Johnson Controls has the highest dividend of the seven stocks that split in July (although it is only 1.1%) and this dividend has been growing 13% a year and is deemed very secure.
“JCI makes the increasingly sophisticated electronics and hardware that control the heating and cooling of our buildings. There is no end in sight for the need to make our buildings more efficient and JCI is going to benefit.
“We owned Johnson Controls back in 2004 and 2005 and it was a solid and dependable performer. It's a well run, old style, Midwestern business that will bring a measure of stability and steady growth to the 2 for 1 portfolio.”
posted at 3:07 PM
