Buy-and-Hold Stocks That Will Make You a Fortune Now and ...

[Pages:12]5 Buy-and-Hold Stocks

That Will Make You a Fortune Now and Forever

By Timothy Lutts, Cabot Wealth Network

Why I Sent You This Free Report

5 Buy-and Hold Stocks That Will Make You a Fortune Now and Forever

Dear Reader,

If there is one reason that Warren Buffett, Benjamin Graham, Peter Lynch, John Templeton and John C. Bogle have become the richest and most successful investors in the world, this is it: They all identified great companies that stood directly in the path of growth, bought them, and then held them for the long term.

It's not fancy, but it works, and it eliminates a lot of risk. No longer do you have to worry about the ups and downs you see in the market daily. Because you're in it for the long term, you no longer have to concern yourself with daily fluctuations, volatile market swings or flash crashes.

My dad discovered that, too, 46 years ago, when he started Cabot Market Letter, now Cabot Growth Investor.

As he told me long ago, "If you want to make money as an investor, then you want to invest in good stocks that are growing now and will continue to grow in the future."

That's what we specialize in here at Cabot through our advisories. Sending you this report is our way of fulfilling my dad's promise 46 years ago which is to bring our readers "the most profitable stocks on the planet" and to prove to you that buy-and-hold is one of the smartest, safest and most profitable ways to invest for your future.

These five stocks have made many of our Cabot readers rich--all by simply buying and holding on to the stocks you're about to read about here. If you can add them to your holdings now, you can begin to enjoy similar returns.

Yours in pursuit of wisdom and wealth,

Timothy Lutts, Chief Investment Strategist Cabot Wealth Network

P.S. REMEMBER: On March 10, we are going to personally invite a handful of investors to receive unlimited access to nine of our market-beating advisories.

As a result, you'll never miss out on a long-term hold, money-doubling trade or high-yield opportunity again.

You'll begin to profit from Cabot Stock of the Week recommendations like Netflix (up 12,037%), Cabot Growth Investor recommendations like Amazon (up 1,200%), Cabot Emerging Markets Investor recommendations like ARM Holdings (up 662%), Cabot Top Ten Trader recommendations like Regeneron Pharmaceuticals (up 1,979%), and Wall Street's Best Investments recommendations like Questcor (up 1,683%).

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All while supplementing your holdings with the best, safest and highest-yielding income stocks and ETFs on the planet, delivered to you from Cabot Dividend Investor and Wall Street's Best Dividend Stocks. What's more, you'll also be able to grab great shorter-term gains, as our Cabot Top Ten Trader members do ... while taking advantage of tremendous turnaround opportunities like our Cabot Undervalued Stocks Advisor and Cabot Benjamin Graham Value Investor members do. All without your having to subscribe to nine separate advisories. So please be sure to look for it on March 10. Like your free subscription to Wall Street's Best Daily, this invitation is also FREE, and comes without any obligation to purchase a thing. In the meantime, I urge you to not only read about our 5 Buy-and-Hold Stocks but also invest in them! By adding them to your portfolio and holding over the long term, you could secure your retirement for life.

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5 Buy-and-Hold Stocks That Will Make You a Fortune Now and Forever

By Timothy Lutts, Chief Investment Strategist, Cabot Wealth Network

When my father published the first Cabot investment advisory way back in 1970, his goal was to help readers become better investors by introducing them to high-potential growth stocks, and teaching them how to cut losses short while letting profits run.

That original investment advisory, currently in its 47th year, is now titled Cabot Growth Investor, and ably managed by Mike Cintolo, Cabot's Vice President of Investing.

But there's a whole world of investing strategies beyond growth investing, and Cabot over the years has expanded its offerings to readers by offering guidance on a wide variety of other investment strategies as well.

And now, with our new Prime membership, we're making it possible for readers get nine of these valuable advisories at one bargain price!

This report highlights five growth companies, chosen from five distinct advisories, that I sincerely believe will be great buy-and-hold stocks (even for the rest of your life!)--if you have the patience.

I suggest you read them all. Get a sense of the system(s) used by each advisor. See what makes sense to you. And then put your money to work, slowly and steadily. Remember, investing is not a sprint; it's a marathon.

1. NetEase (NTES) from Cabot Emerging Markets Investor The investing world does not end at the U.S. border. In fact, you can find faster-growing countries and companies if you look overseas, particularly in emerging markets like China, Mexico, India, Turkey and Indonesia. Of course, with greater opportunity comes greater risk (there's no free lunch), but if you can exercise proper risk control, you'll find soaring profits in some of these stocks.

International investing ace Paul Goodwin is your guide to these stocks and countries in Cabot Emerging Markets Investor. Paul's readers bought NetEase (NTES) back in June and Paul continues to update them on the stock every week. Here's some of what Paul has written about the stock.

NetEase (NTES) NetEase (NTES) is one of our long-time favorites in the emerging markets space--a stock we've owned a handful of times in the past (mostly profitable trades), and one we continue coming back to as the stock resumes its longer-term advance.

NetEase originally made a name for itself as one of China's leading internet portals (providing news, chat, email, educational content and the like)--the "Yahoo of China" was its nickname among most investors, and the mid-2000s were excellent years for the company, with sales and earnings spiking and the stock getting institutional support for the first time.

Today, the company continues to do a very good business in the general internet space, which includes email services (NetEase is China's largest email provider with a whopping 860 million

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registered addresses), online advertising (on its various free portals) and its e-commerce business (including entertainment and finance services).

But the real growth driver at NetEase (accounting for 76% of total revenues) is the game business. The firm first began building this segment in a big way in the mid-2000s, and today it's one of the leading PC and mobile game firms in China and the world as a whole.

There's a little bit of a "fashion" trend to the game industry; if a firm's development efforts launch a few duds, the whole lineup can sag. But NetEase has proven to be among the best when it comes to its lineup of games--it offers many self-developed and major licensed PC games (including the World of Warcraft franchise from Activision Blizzard), and in recent years, it's made a huge push into mobile games (they now account for 63% of game revenue), many of them the multiplayer ventures that have proven addictive (and lucrative!).

Today NetEase offers more than 90 mobile games, and expects a steady stream of new releases this year, including potential hits New Ghost and Fantasy Westward Journey: Warriors.

Plus, it's worth noting that there's something of a network effect in the game industry. The more successful a company is, the more buzz it garners for its games, the more money it has for R&D to develop new games, the more data/feedback it has to predict what gamers will pay for, and the more willing other developers are to partner with them.

In the second quarter of this year, NetEase's revenues grew 83% while earnings jumped 80%, and analysts expect more great growth ahead.

As for the stock, NTES has made great progress over time, but that progress has been interspersed by more corrections and dead periods than you can count (thus our history of buying and selling the stock). The good news, though, is that when it gets going, the stock tends to trend for many weeks if not months.

So, to take advantage of NetEase's growth, you can be a buyer and seller from time to time, trying in particular to buy after major corrections--or you can choose to hold some of the stock "forever," and look back perhaps 10 years later and see how far you've come.

2. Tesla Motors (TSLA) from Cabot Stock of the Week

To understand Cabot Stock of the Week's recommendation of Tesla, you first need to understand the advisory's system. In short, there isn't one--there are seven! That's because every week, I choose the most attractive stock from seven other Cabot advisories, paying attention to the overall investing environment, short-term opportunities and portfolio diversification.

Tesla Motors was originally recommend by Cabot Top Ten Trader, because the chart was attractive, and Cabot Stock of the Week repeated that recommendation in December 2011, before the firm had even produced its first Model S electric-powered luxury sedan. Here's an update.

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Tesla Motors (TSLA) Readers who bought TSLA when I originally recommended it back in December 2011 now have a profit of more than 700%. That's their reward for taking the risk of buying before even the Model S was launched and when uncertainly about the company's fortunes was the dominant sentiment.

But the company has come a long way since then fundamentally, and it's far more widely known as well. The Model S sedan has been a home run; it now outsells Mercedes' S Class and BMW's 7-Series combined. The Model X SUV is selling well, too. And on the horizon is the Model 3, the affordable sedan that will seat five and go more than 200 miles on a charge.

Plus, Tesla just completed its merger with SolarCity, the U.S.'s number one installer of both commercial and residential solar power systems--and it continues to refine the world's most widely used self-driving system (named Autopilot) a system that has already saved ten of thousands of users untold hours of driving tedium while making them safer as well.

But neither Tesla Motors nor SolarCity have managed to generate profits consistently! Tesla has been investing in manufacturing capacity, as well as building a gigafactory in Nevada that will produce more lithium batteries than all the factories in the world today. And SolarCity's business model, which is based on leasing solar power systems to customers, is very capital-intensive. Furthermore, the way solar panel prices have been trending, there's no knowing when profitability will occur.

Still, Cabot Stock of the Week readers who are sitting on big profits have been advised to be patient, given that Tesla still has enormous growth potential as it leads the automotive revolution (both on the electric front and the self-driving front), and that investors as a whole are still uncertain about the company's future, and will be until it can generate steady and growing profits.

Last but not least, TSLA's long-term chart shows that the stock had been basically going sideways for two years. In that time, it digested its earlier gains, but it hadn't declined meaningfully; the sellers have not taken charge here. Thus, technically, the chart tells us that the majority of investors waited patiently, biding their time until the stock resumed its long-term uptrend.

For anyone with large gains, that's what I recommend now as well. And for readers who don't own the stock yet, I recommend buying now that the stock's long-term uptrend has resumed.

3. Facebook (FB) from Cabot Growth Investor Cabot Growth Investor is Cabot's "flagship" advisory--the original and still the biggest. To a large part, that's because it provides exactly what most investors want--stories and charts about great growth stocks, with a little market timing added to reduce risk and increase profitability. Lead analyst Mike Cintolo recommended Facebook (FB) to his readers back in 2013, and those readers have profits that now exceed 250%. But Mike still has FB on Buy! Here's what he wrote recently.

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Facebook (FB) Every few years, there comes a flag-bearer for all growth stocks--an emerging blue chip that combines all of the characteristics of past market mega-winners, from the story (revolutionary product or service, barriers to entry, mass market) to the numbers (sales and earnings growth, cash flow, profit margins, earnings estimates) to the chart (liquid enough to attract hundreds of huge mutual, pension and hedge funds, whose buying pushes the price higher over time).

Today, I think that stock is Facebook, whose growth story is as huge as they come. Driving that potential is the size of its user base: A mind-boggling 1.18 billion people use its core service every day. To put that in perspective, the most-watched TV show of all time was Super Bowl XLIX in February 2015, where 115.2 million people tuned in. Facebook gets 10 times that viewership every day of the week!

Amazingly, the user base is still growing at a good clip (daily users up 17% year-over-year) as the company expands internationally. And all of that is providing highly-targeted opportunities that provide a great return for big advertisers. Amazingly, despite revenues north of $27 billion, Facebook's advertising revenue is growing north of 50% annually as it increases the efficiency of its advertising tools (more and better targeting) and as more advertising dollars go online from offline.

If this was the whole story, we think Facebook would be a fine stock, likely able to grow solidly over the long-term. But there's a lot more to the story than just Facebook's namesake property, and that's a big reason why we see this as a forever stock.

First you have Instagram, which is a leading photo and video sharing site. There are 300 million daily active users (500 million every month) of the service, and Facebook just began to slowly ramp up advertising during the past year. Revenues totaled "only" a few hundred million dollars in 2016, but most analysts are projected a rapid expansion in the years ahead. Some even think $4 billion of revenue is possible by 2020!

Then there's Messenger, the firm's messaging system, with a whopping one billion average monthly users. Facebook isn't directly monetizing this yet, but plans are in place to make this a key cog in consumers' interaction with companies both for ordering (food, tickets) and customer service.

There's also WhatsApp, a highly popular international messaging service that lets users get around standard telecom texting and video calling fees. WhatsApp also has one billion monthly users, and while Facebook hasn't made any money from it yet, it doesn't take a genius to figure out they will. And Facebook also has its hands the virtual reality space, which figures to be a huge market (especially for gaming) in the years ahead.

As with any forever stock, a key factor is management, and whether they'll pull the right levers. So far, Mark Zuckerberg and his team have done so and we have no reason to think that won't continue. With 30% annual earnings growth likely for many years, we think the stock is a solid Buy today.

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4. (AMZN) from Cabot Top Ten Trader Cabot Top Ten Trader is the second advisory managed by Mike Cintolo; the difference (as the title says) is that traders can find more to work with here; a lot of Mike's recommendations are bought and sold in a matter of weeks. Still, some persist longer than that and one that you could easily hold "forever" is that well-known king of retailing and more, .

(AMZN) One common thread among most big winners is mass markets--selling products and services to tens of millions of customers. Amazon has that in spades! The company, of course, is the King of E-Commerce, and what's so impressive (and what makes it a forever stock) is that the company is constantly pushing the envelope in terms of products and services it offers.

In fact, we first recommended AMZN way back in 1998, when the company was just a small, rapidly growing online bookstore. Today Amazon offers everything under the sun and is continuing to push into new areas, including groceries, business-to-business sales (it has a Staples-like online store) and cloud computing.

That cloud operation, dubbed Amazon Web Services, is one of the top cloud providers in the world. And it's one of the main driving forces behind the company's surging earnings! In the most recent quarter, the Web Services division saw revenues of about $3.5 billion (that's a run-rate of more than $14 billion annually, and was up 47% from a year ago), and importantly, it provided a bit under half of Amazon's operating income in the quarter.

Longer-term, the potential of Web Services is enormous as more and more companies move online, and as Amazon is the price leader in the category--you're literally seeing thousand of businesses build their online platforms using Amazon's infrastructure.

However, the most bullish long-term story here is the stickiness of Amazon's overall business--from retail products to business-to-business items to cloud infrastructure to third-party sales to Amazon's own devices (like its Fire tablets, Kindle e-readers and Echo personal assistants), the firm's customers continue to order more and more, relying on Amazon for a ever-growing portion of their spending.

A big part of that stickiness comes from Prime, which offers free two-day shipping on most products, as well as many other benefits (a Netflix-like streaming TV and movie service; some free e-book rentals), for just $99 per year. Most analysts believe there are north of 70 million Prime members and they outnumber their non-Prime customers! The big thing here is that Prime customers spend three or more times as much as non-Prime customers--these are the people that are ordering from Amazon every week or two.

While investors have long worried about AMZN's valuation, the key here has always been the earnings power, even when actual earnings were flat because of the firm's heavy investments in its cloud business and major distribution centers. Now, though, the bottom line is surging--analysts see earnings north of $10 per share as capital expenditures stabilize and most of Amazon's growth (which is still running north of 20%) falls to the bottom line.

Long-term, there's no foreseeable limit to Amazon's potential, and with Jeff Bezos pulling the strings, the sky's the limit.

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