Finding great companies that will outperform the market is tough. Warren Buffett has been consistently outperforming the market by purchasing great quality businesses at a fair price and holding them for long periods of time. After researching numerous companies, I believe Cal-Maine Foods (NASDAQ:CALM) is a business that is currently valued at a discounted price and is poised to rebound from its recent pullback going forward. My two previous articles have documented how DNP Select Income Fund (NYSE:DNP) and Johnson & Johnson (NYSE:JNJ) have been consistently outperforming the S&P500 over a long period of time. You can read more about DNP here and JNJhere. From those articles, I believe they are safe investment for young and new investors with long investment horizon. Now looking at Cal-Maine Foods, I believe this company falls in with Warren Buffett’s strategy of buying a wonderful business at a fair price, rather than a fair company at a wonderful price. This article will provide evidences and justifications as to why CALM is a company that should belong on your buy watch list and how the recent pullback in its share price could be an opportunity to buy a great quality business at a cheap and fair price.
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As a new young investor, I find myself constantly reviewing many different stocks and comparing their performance against the S&P 500 index. In my last article, I researched DNP Select Income Fund (NYSE:DNP) and found that it had outperform the S&P 500 index in the last 29 years since it was founded. My analysis of DNP Select Income Fund can be found here. Every investor are looking for the next investment that will provide them a decent return in the future. The true is that very few companies outperform the market over a long period of time. An example of this was shown in the looking back at the Nifty Fifty stocks that were once deemed a solid buy and hold growth stocks back in 1960 – 1970. The lesson learned I took from the Nifty Fifty stocks was that even if a company is a large corporation and has a long performance track record, there are no guarantee it will continue to outperform the market much less be in business the next fifty years. For this reason, the number of companies that outperform the stock market in the long run are very little.Johnson & Johnson (NYSE:JNJ) is one of those companies that has consistently outperform the market in any given economic condition. This article will provide evidences that show Johnson & Johnson has been outperforming the S&P500 since 1944 and why this stock need to be in everyone’s portfolio.
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