Buffett-Inspired Picks that Could Outrun the Bulls

Using the annual “Running of the Bulls” as a backdrop, Validea CEO John Reese offers insights in a recentForbes article concerning the current bull market and how investors can avoid getting “trampled.” He writes, “Certainly not by trying to outrun—or outsmart—the bulls.”

Reese highlights the investing mantra of market guru Warren Buffett, who inspired one of the stock screening models he created for Validea, and underscores the importance of sticking to fundamentals rather than stock market trends when deciding what to buy.

Using this model as well as those inspired by other market legends, Reese identifies the following high-scoring picks:

  • Tractor Supply Company (TSCO) is an operator of rural lifestyle retail stores in the U.S. that focus on supplying the needs of recreational farmers, ranchers, tradesmen and small businesses. The company scores well based on predictable earnings growth and the ability to pay off debt with earnings in under two years. Get the Buffett-based Analysis on TSCO here. 
  • Gilead Sciences (GILD) is a research-based pharmaceutical company that discovers, develops and commercializes medicines in areas of unmet medical need. The company is favored for its ten-year average return-on-equity and free cash flow-per-share. Get the Buffett-based Analysis on GILD here. 
  • Dow Chemical Company (DOW) manufactures and supplies products used primarily as raw materials for various other manufacturing applications, and earns high marks for cash flow-per-share as well as trailing 12-month sales. Get the Buffett-based Analysis on DOW here. 
  • Snap-On (SNA) is a manufacturer and marketer of tools, equipment, diagnostics and repair information and systems solutions, and is favored for its debt-equity ratio and earnings yield. Get the Buffett-based Analysis on SNA here.