Morningstar named three basic stocks every investor should own
These securities are viewed positively by most Wall Street analysts despite weaker performance compared to the market
Investment rating agency Morningstar has named three companies whose stocks are ideal as the basis of a long-term portfolio for private investors. According to David Sekera, the agency's lead strategist, beginners should choose diversified funds and ETFs, gradually adding stable, fundamentally strong companies with a clear competitive advantage.
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Investors making their market debut should always start with broadly diversified investment vehicles like mutual funds and ETFs, and then gradually expand their portfolios with individual underlying stocks - solid securities from large companies with a sustainable competitive advantage, according to Morningstar's chief U.S. market strategist David Sekera.
"These are the kind of companies that I think are suitable for long-term investing. The [first] example is Microsoft. In the energy sector, Exxon. Johnson & Johnson is another example. These stocks, based on the fundamentals of the companies and our assessment of their long-term sustainable competitive advantages, could form the basis of a portfolio of individual securities," Sekera said on The Morning Filter podcast.
If a novice investor wants to open more interesting positions in the future - not necessarily speculative, but those that are traded at a discount or belong to the so-called "story stocks" - it is possible to supplement the portfolio with such securities, the economist added.
How these stocks are valued by Wall Street
According to investing.com's data techanalysis, Microsoft stock is in a solid uptrend and is a Strong Buy. Nine out of ten key indicators point to growth. None of the analysts tracked by FactSet recommends cutting positions in Microsoft: 59 economists advise buying the tech giant's securities (Buy and Overweight ratings), while the remaining six are neutral (Hold). The average target price of $525.77 per share, calculated by the service, implies a 5.6% increase in Microsoft's stock price over the next year.
Shares of Exxon Mobil also look "strong buy" from a technical perspective. FactSet's consensus investor rating is "above market" (Overweight, consistent with a buy recommendation). The stock's average target of $122.96 per share is 11% above the closing price in New York on July 7.
Technical analysis of Johnson & Johnson stock as a whole indicates a "strong buy." Meanwhile, the moving averages paint a neutral picture, with six signaling up, six signaling down, which may suggest temporary uncertainty in the short-term dynamics. Calculated by FactSet consensus rating of Johnson & Johnson shares - "above the market": 11 analysts recommend buying these securities, 14 - to hold. At the same time, no one advises to sell them.
Over the past year, all three stocks showed weaker dynamics than the S&P 500. The benchmark U.S. stock index rose 11.9%, Microsoft shares - by 6.45%, Johnson & Johnson - by 6%, and Exxon Mobil quotes slipped 2%.
This article was AI-translated and verified by a human editor
