Five-Tool Fantasy Stocks
AnnaLisa is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
With the World Series upon us, people talk of five tool baseball players. Players who can hit for power, hit for average, who have speed, who can field, and who can throw quickly and accurately. These players are extremely rare and worth every penny they’re paid.
As in baseball a company that has earnings power, value, who is innovative and quick, who is adaptable ( the baseball term “soft hands” meaning a player that can catch anything), and has quickness and accuracy ( i.e. knowing their market, anticipating shifts in trends or hedging costs) is going to be worth scouting for your portfolio.
According to this bleacherreport.com article, the top five five-tool players in baseball including the Negro Leagues are: 1. Willie Mays, 2. Ken Griffey Jr., 3. Mickey Mantle, 4. Oscar Charleston, and 5.Ty Cobb.
The beloved “Say Hey” kid, Willie Mays is number one with 12 Gold Gloves, 100 RBI’s each in 8 seasons with a lifetime batting average of .302. The closest stock would be Berkshire Hathaway (NYSE: BRK-B). Willie Mays was such a hero and role model he was cheered in competitors’ stadiums. Warren Buffett is similarly respected and admired and the annual shareholder “lovefest” in Omaha is eagerly attended. Like Willie, Warren is a simple man and only buys what he understands. But like Mays he is an indomitable foe, fierce but fair, and despite his age quick to pick up on opportunities and adaptable, making money on Goldman Sachs and having soft hands on the Lubrizol fiasco, taking a setback, turning it into a triumph, and restoring the trust of shareholders.
The stock just hit a 52 week high on October 18; plenty of people have made fortunes with just a few shares. Mr. Buffett decided rather than split the A shares to instead create a B share class for people who wanted in. The company owns Geico among many other Main Street solid companies and just acquired The Pampered Chef in 2011.
Then there’s Ken Griffey Jr., young and fast but plagued by injuries throughout his career. He had a charisma that Seattle fans adored. Griffey at the height of his career reminds me of Apple (NASDAQ: AAPL) and Steve Jobs. Griffey Jr. started his career with the Seattle Mariners and even after a stint with the Reds, Mariners fans signed petitions to bring him back to the “The House That Griffey Built.” Steve Jobs was let go from the company he founded only to return and run it as never before. After Griffey suffered a hamstring injury he returned to play and was named National Comeback Player of the Year in 2005. Jobs was a comeback kid and leader like Griffey Jr. who brought the Mariners back in harmony. Griffey was considered the power hitter of the 90’s and no one can say Apple doesn’t have earnings power. Apple with its 14.33 P/E and 1.70% yield is looking better as the game goes into extra innings even after Jobs’ passing. No other tech company has so many loyal customers and there’s no better retailer. Apple reports on October 25.
Third is Mickey Mantle, a New York Yankee and maybe the best switch hitter ever. I liken him to Goldman Sachs (NYSE: GS), making money in bear or bull markets. There were private scandals (he took both wife and mistress to his retirement ceremony and was a hard drinker) like Goldman's with the Greg Smith op-ed piece. Goldman Sachs is a best of breed investment banker with the smartest people on Wall Street, highly paid just like Mantle was, once the highest paid player of his time. There’s no one that businesses would rather have underwrite an IPO or high net worth individuals invest with. Goldman has an 11.87 P/E and and 1.60% yield. It just reported Q3 earnings that were respectable but the company is powering back up and the price target was just raised to $157 by CLSA.
Then there’s Oscar Charleston, one of the best five tool players you never heard about. He played for three decades in the Negro Leagues with a career batting average of .348. This centerfielder and manager was focused and brilliant, content to stay out of the limelight and just play the game. What's another unheralded name that's a strong defensive play? Abbott Laboratories (NYSE: ABT) with a 16.18 P/E and a 3.10% yield also just reported an earnings beat, (double digit gains on EPS growth) but sales slowed. It produces medical devices, brand pharma, generic pharma, diagnostic systems and tests, and OTC health and nutritional products. Five tools, right there.
Finally, there’s the mercurial Ty Cobb, “The Georgia Peach,” prone to random acts of violence and kindness in turn. He built the Cobb Memorial Hospital with his own money and endowed the Cobb Educational Foundation providing scholarships for disadvantaged youth. He really respected intelligence and education and when son Ty Cobb Jr. flunked Princeton he drove there and whipped him. He broke over 90 Major League records in his lifetime. His career batting average was .367 and his record for career hits was unchallenged until 1985 by Pete Rose's 4,192.
Ty Cobb had a lifelong relationship with Coca-Cola Company (NYSE: KO) as a spokesman and stockholder and by his retirement owned millions of dollars worth of Coca-Cola shares and three Coca Cola bottling plants. Coca-Cola, headquartered in Atlanta started off as a small player with a flavored sugar water business to become one of the best known brands in the world. Like Cobb, Coca-Cola has adjusted to the game offering healthy beverages in its lineup now including energy drinks, nutritional waters and juices. While I’m not saying Coca-Cola is the hothead that Cobb could be, he did have a longstanding rivalry with Babe Ruth, like Coca Cola and Pepsi. Coca-Cola has a 19.55 P/E and a 2.70% yield and just authorized a share repurchase program last week. Both Cobb and Coke were born in 1886. It, too, just reported earnings, mostly in line but the recent purchase of Coca-Cola Bottling will help that bottom line.
Companies go through slumps just like players and stockholders can be just as judgmental as baseball fans. But records are made by performing season after season and these are “best of breed.” So while baseball season is almost over think about this five-tool fantasy team for your portfolio. Batter up!
leglamp has no positions in the stocks mentioned above. The Motley Fool owns shares of Apple and Berkshire Hathaway. Motley Fool newsletter services recommend Apple, Berkshire Hathaway, Goldman Sachs Group, and The Coca-Cola Company. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.If you have questions about this post or the Fool’s blog network, click here for information.