Magic Recipe -0.19%
Deep Value 0.31%
Star List -0.32%
S&P 0.22%
Today's Performance (see long-term performance)

Reviewing the Magic Recipe Stocks: #31-40

What are the best stocks in the Magic Recipe Spell?

There are a lot of stocks in there - 50 in total. Doing full reviews on all 50 would take a substantial amount of time, and by the time we were done, the list would be all different again!

So we're breaking them up into 10 at a time and doing a "Twitter" style, 160-character maximum review of each current Magic Recipe stock (140 was not enough)! In addition, I'll provide a quick "thumbs up", "thumbs down", or "neutral" OPINION of each stock's potential to outperform the market over the next 12-18 months, as well as a basic-as-possible description of the company's business.

You can find reviews of stocks #41-50 here. Today, let's cover stocks #31-40. With no further ado...

#40: Reynolds American (RAI)

Company Description: Cigarettes and tobacco.

Outlook: Neutral.

"Tweet" Review: With Lorillard on board, solid #2 in smokes. Good yield of 3.3%. Pricing power. Strong moat. New regulations the main risk. Valuation just ok.

#39: Express Scripts (ESRX)

Company Description: Pharmacy benefit manager (PBM).

Outlook: Thumbs up.

"Tweet" Review: One of few large PBMs with CVS, United, and Blue Cross. Very stable cash flows. Recession-proof. Major regulation changes past. Valuation enticing.

#38: Cato (CATO)

Company Description: Women's clothing retail.

Outlook: Neutral.

"Tweet" Review: Well-run, debt-free, 3.5% yield. No moat biz, needs very cheap valuation that isn't there yet.

#37: Thor Industries (THO)

Company Description: RVs and trailers.

Outlook: Thumbs up.

"Tweet" Review: Another extremely well-run firm, debt free, 1.9% yield and rising. Long history of strong ROI. Limited competition. Growth potential better-than-avg.

#36: EMCOR Group (EME)

Company Description: Large-scale building systems design and maintenance.

Outlook: Neutral.

"Tweet" Review: Modest revenue growth, flat margins. Not a growth industry. Few competitive advantages. Debt-free, small dividend. Overall uninspiring.

#35: Insys Therapeutics (INSY)

Company Description: Speciality pharmaceuticals, notably using cannabis (marijuana).

Outlook: Thumbs up.

"Tweet" Review: High-risk, but high-upside with marijuana-based epilepsy drug in trials. Existing product sales, profitable, no debt. A "binary outcome" stock.

#34: Brocade (BRCD)

Company Description: Networking equipment.

Outlook: Thumbs up.

"Tweet" Review: Classic value. 2.5% yield, aggressive buybacks, rising margins. Has upside to $13 or so, but don't see this as a long-term hold.

#33: H&R Block (HRB)

Company Description: Tax preparation services and software

Outlook: Thumbs up.

"Tweet" Review: Historically cheap valuation. 3.7% dividend yield. "Inevitable" industry, recession-proof. Increasing competition in software is headline risk.

#32: GNC (GNC)

Company Description: Nutritional products retailer.

Outlook: Neutral.

"Tweet" Review: Traditionally strong name in supplements, but facing increased competition from online, other retailers. Value, 3% yield, but little growth or margin potential.

#31: Biogen (BIIB)

Company Description: Bio-pharmaceutical giant, especially in MS.

Outlook: Thumbs up.

"Tweet" Review: Dominates MS drugs. Big potential in MS, Alzheimer's pipeline. Growing earnings 20%+, but 15 P/E. Buyout candidate. Strong choice.

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