If you have a long-term investment horizon, then focusing on stocks with staying power can be a great way to build wealth. These overlooked long-term stocks usually have strong industry moats or sticky products and services for their customers. Even if they don’t provide the same hyper-growth as high-flying tech stocks, they usually come with less volatility and greater peace of mind.
When we use the term secret stocks, it does not necessarily mean unknown companies. Rather, when the bright lights shine on the same high-profile companies, these secret stocks offer a less-crowded trade and strong, longer-term performance without any of the headlines. Here are three secret stocks we believe can help your portfolio grow for years to come.
Freeport-McMoran (FCX)
Freeport-McMoran (NYSE:FCX) has long been viewed as just another precious metal mining company. While many focus on mining gold, FCX has emerged as the world’s largest copper miner. Wall Street analysts can see the light with FCX, providing a one-year price target range of $41.62 to $55.49. While this only implies about a 10% upside, these targets will likely be revised as the price of copper continues to rise.
You might be wondering what all the excitement is about copper. With the recent surge in demand for data centers to power artificial intelligence (AI) and machine learning technologies, investors are realizing that we’re going to start needing a lot more copper. Nvidia (NASDAQ:NVDA) announced earlier this year that they are moving from fiber optic cables to copper wiring in its data centers. Not to mention, copper is a critical component in other technologies like electric vehicle batteries and renewable energy infrastructure.
The stock has seen an uncharacteristic spike in price this year, already gaining 22.4% in 2024. This has caused its stock multiples to increase as shares now trade at 32x forward earnings and 3.1x sales. These are historically high for FCX, although, with rising demand for copper, the company should easily be able to grow into these multiples.
Dell Technologies (DELL)
Investors who have been around for a couple of decades might be wondering why Dell Technologies (NYSE:DELL) is trending again. In recent weeks, Dell has been rejuvenated and is trading at all-time high prices. Analysts on Wall Street are expecting more from Dell as the stock has a street-high price target of $197.00 which is about 25% higher than its current price.
So what has Dell’s stock hitting new all-time highs in 2024? Like FreePort-McMoran, Dell is also benefiting from the emergence of the AI industry and a friendly shoutout from an old friend at Nvidia. Nvidia’s CEO Jensen Huang has always had a soft spot for Dell which used Nvidia’s chips in its laptops when others would not. Huang has returned the favor by suggesting that Dell builds the best enterprise end-to-end systems and that the company is a key to widespread AI adoption.
For the first time in a long time, Dell’s stock is seeing some price multiple expansion. Shares are trading at their highest levels in years at 21x forward earnings and 1.3x sales. Investors likely want to see Dell prove it before they believe it but as long as it can stick with Nvidia, the stock should continue to do well. It’s not likely to be one of the overlooked long-term stocks for long at this rate.
Waste Management (WM)
The last pick for stocks with staying power has a simple bull thesis: everyone creates garbage. Waste Management (NYSE:WM) is the world’s largest waste and recycling brand by market cap. It has long been a favorite of Wall Street analysts and this is indicated by their bullish price targets. WM is currently trading below the lowest price target of $210 and is well below the average price target of $228.16.
Waste Management has 53% of the market share of American waste removal services. While waste management will always be an essential service for any society, this company has started to branch out. Waste Management is also branching into energy production by converting landfill gases (LFG) into an energy source. The company has also converted most of its fleet to compressed natural gas (CNG) vehicles.
Although it may seem just like other overlooked long-term Stocks, WM has provided excellent shareholder returns. Over the past five years, WM has returned more than 90% to shareholders as well as an 8.5% CAGR for its dividend. Shares trade at 29x forward earnings and 4x sales which is right in line with its historical multiple, even though revenue has been growing at a CAGR of 7.0% over the past five years.
On the date of publication, Ian Hartana and Vayun Chugh did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
