Lancaster Colony Still Rallying
Stocks have just been ripping higher lately. Sure, there are some ripples as managers steer their companies through the turbulence of an economic recovery. But the trend higher is unmistakable. It’s like there are more buyers of stocks than sellers, and simple supply-demand economics is pushing stock prices to ever higher levels.
When the current seems to be carrying almost all stocks higher, like it is now, I begin to question whether investors are remembering fundamentals. Sure, we know not to fight the trend – that’s a sure way to lose. But we also don’t want to be the last one on the gravy train either. Keep a cool head when stocks are moving straight up, and don’t forget that they can move straight down too. This balanced mentality will help you protect yourself from being that unfortunate last person on the train. But it will also give you the confidence to purchase shares of your favorite companies when shares pull back.
So even though I believe the stock market will continue to run higher in 2010, let’s remain cautiously optimistic. Don’t throw caution to the wind just because it seems that everyone is feeling good about the market’s 70% run higher from the 2009 lows.
***With this cautionary statement in mind, let’s turn back the clock to look at a conservative investment that I recommended here in Small Cap Investor Daily a few months back. This was a great call, and I hope some of you took the opportunity to buy some shares back then.
The company is Lancaster Colony (NASDAQ: LANC), a consumer goods company with a long history dating back to 1961. I first recommended the stock to Small Cap Investor Daily readers on December 4th, 2009 when it was trading at $48.76 per share.
Then on January 29, 2009 when Lancaster was a $54.28 stock and had already moved up 11.3%, I gave a full write-up on the stock. You can read that write-up by clicking here. By the way, this report is an abridged version of the ones I send to subscribers of Small Cap Investor PRO.
I wrote, “Lancaster Colony won’t knock your socks off, so feel free to sit back and relax while you read this. But the stock should be trading at least 10% higher, and could even rise as much as 28% in the next six months. That should be exciting to investors.”
And the stock has excited investors. In fact, shares have rallied higher to $59.95. That’s 10.5% higher than when I wrote the update. Readers who purchased shares on my initial recommendation are sitting on a 23% gain.
If you go back and read this write-up, you’ll see that I have a high end target of $68.50 on shares within the next six months. I think the stock will continue to move higher toward this target, and management is continuing its $0.30 quarterly dividend. Lancaster is one of only 17 U.S. companies that have paid a regular cash dividend each year for 47 years. That’s a heck of a track record. And even though I find this company’s products to be a tad on the dull side, I love the stock and I applaud management’s uber-conservative approach.
***I recently received a very kind letter from a subscriber to Small Cap Investor PRO who has used the service to recover losses from the market’s plunge in 2008-2009. Honestly, nothing makes me happier than hearing that readers have been able to make money off of my investment advice. Naturally that’s the goal, but when I read Keith’s letter, I was really pumped.
Keith wrote, “I love the newsletters and the annual reports. …your stock picks and research have helped me recover all of my losses that occurred in 2008/2009. Your advice is excellent; most importantly, I appreciate your continued references to us doing our own homework. I like to watch the stocks that you recommend for 2-4 weeks… I did, however, pick up ISSI and RMTR and am very pleased with their advancement.
I am also still holding half of my position in [company] thanks to your investment report last year. I know that you are not following all them directly, but it would be nice if you could give us all an update on the 10 micro caps for 2010 and your other reports, the ones that recommended [company] and [company] for long term investments. So far those two are great investment recommendations, but I was wondering if you still think they are long-term keepers.”
Keith’s success is simply awesome. Congratulations and rest assured my staff and I continue to work to bring Small Cap Investor PRO readers even more profitable investment ideas.
I’ll give an update on the stocks Keith asked about in a future letter (I can’t discuss all of the stocks that go out to paying subscribers, but I will discuss some). But I want to let you know that we are sending out a survey to Small Cap Investor PRO readers to get their feedback on exactly what type of small cap stocks they want us to find for them.
So this is your chance to let me know what types of stocks you want to know more about. If you’re not a member of Small Cap Investor PRO yet, I encourage you to sign up for a no risk trial service by clicking here. You can cancel within 30-days at absolutely no cost to you. But prior to that, you can respond to the survey and let me know how I can help you find stocks that fit your investment criteria.
Then finish out your trial, during which you’re likely to receive at least one stock recommendation, and decide if you want to become a member of our independent investor community.
We’re here to make profitable small-cap investments just like Lancaster Colony. But I can’t give all of my ideas away for free. So check out Small Cap Investor PRO for a no-risk trial subscription by clicking here, and let me know how we can work together to find you the stocks you want to buy.
*** With energy prices climbing ever higher, now is also a great time to start adding energy stocks to your portfolio. If you are already an energy investor, you have most likely made money over the last 12-months with your energy investments. And if you haven’t invested in this sector yet, now is a great time to get started.
Either way, you may want to check out my Energy World Profits advisory. And for a limited time, I’m offering this service at a 50% discount! That’s a great deal for my top energy investment ideas that will give your portfolio great exposure to this booming sector.
I’m opening this offer up one day early for loyal readers of Small Cap Investor Daily. The official sale will start tomorrow, but I want to give you the first chance to check out the stocks in the Energy World Profits portfolio.
