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Seven Best Bulletproof Stocks

No matter whether you're looking for the next tech rocket or beaten-down value plays, just one of your holdings filing for bankruptcy would ruin your day. Thus, it’s best to stick with stocks unlikely to suffer that fate. I call them “Bulletproof Stocks.” Here's the formula that we use to screen for Bulletproof stocks:

Bulletproof Stock Screening Formula

•  Maximum debt/equity ratio (MRQ):  0.2

•  Minimum quick ratio (MRQ): 1.0

•  Operating cash flow (TTM): greater than zero

•  Return on Equity (TTM): greater than zero

•  Revenues (TTM): minimum $50 million

•  Trading price: minimum $10

MRQ = most recent quarter, TTM = trailing 12 months

Click here for more about the formula. Click here to see a recent list of Bulletproof stocks.  Qualifying as bulletproof only means that a stock isn’t a bankruptcy candidate, not that you’ll make money owning it.

Seven Best Bulletproof Stocks 

To solve that issue, we've developed a formula for pinpointing the stocks on the Bulletproof list that have the best appreciation potential. After extensive backtesting, we found that limiting this new list, Best Bulletproof Stocks, to seven picks produced the best returns. In fact, if held for six months, a portfolio containing equal dollar amounts of each of the seven stocks should significantly outperform the S&P 500. Here are the numbers.

Backtesting suggests you would have achieved these returns had you generated
a new portfolio every week over the past 10 years and held each portfolio for three months.

Returns vs. S&P 500

All Markets Ave Gain

Up Markets Ave Gain

Down Ave Markets Loss

Sell/Rebalance 3 months

2.3*S&P 500

1.1*S&P 500

0.4*S&P 500

The returns displayed above are based on backtesting that involved buying new seven stock portfolios every week for 10 years, and holding each portfolio for six months, then selling.

Although the average returns of the 497 completed weekly portfolios were profitable, about 31% of them recorded losses, roughly equal to the number of weeks that the S&P 500 also lost ground. Further, historical returns do not necessarily predict future performance, and your returns may not be profitable.

 Without further ado, here's the list. Buy equal dollar amounts of each stock, hold for six months, then sell all and repeat.

  Seven Best Bulletproof Stocks  

 

Data: 5/19/17 

Recent Price

Debt /Equity

Quick Ratio  

Oper Cash Flow

Net Income

ANF

Abercrombie & Fitch  

12.46

0.3

1.5

185

50

AEM

Agnico Eagle Mines  

49.24

0.3

2.6

856

76

HRL

Hormel Foods  

34.83

0.1

1.3

892

235

KBAL

Kimball International  

17.06

0.0

1.3

59

9

LANC

Lancaster Colony  

121.58

0.0

2.3

147

14

MYGN

Myriad Genetics

21.08

0.2

1.4

126

4

RGR

Sturm Ruger  

63.70

0.0

1.5

94

22

Disclaimer:

Do not assume that buying these stocks will be profitable. Do your own research. The more you know about your stocks, the better your results.

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