UBS Quality Growth at a Reasonable Price Portfolio Is Red Hot: 4 Top Picks

Print Email

For almost the past year and a half, we have been in the proverbial sideways market. Sure we had two 10% corrections in a six-month period, but all in all the numbers tell the story. The S&P 500 index closed last Friday at 2,046, which is the same level it was at in November of 2014. That kind of sideways move is probably very positive in the longer running bull market. The question remains, who is doing well and who isn’t.

At 24/7 Wall St., we are impressed when we see consistent positive results from a money management team year after year. One of the top portfolios we cover is the UBS Quality Growth at a Reasonable Price (Q-GARP) portfolio. It is slightly ahead of the S&P 500 this year, and it has trounced the index since inception in 2007. We scanned the current holdings and found four outstanding ideas.

Adobe Systems

This is a high-profile old-school software company and has been posting outstanding earnings. Adobe Systems Inc. (NASDAQ: ADBE) operates in three segments. The Digital Media segment provides tools and solutions that enable individuals, small and medium businesses, and enterprises to create, publish, promote and monetize their digital content.

The Digital Marketing segment offers solutions for how digital advertising and marketing are created, managed, executed, measured and optimized. This segment provides analytics, social marketing, targeting, media optimization, digital experience management and cross-channel campaign management solutions, as well as video delivery and monetization to digital marketers, advertisers, publishers, merchandisers, Web analysts, chief marketing officers, chief information officers and chief revenue officers.

The Print and Publishing segment offers products and services, such as eLearning solutions, technical document publishing, Web application development and high-end printing, as well as publishing needs of technical and business and original equipment manufacturers (OEMs) printing businesses.

Adobe is also reasonably safe route for investors looking to own a company with Marketing Automation product, which has become huge.

The Thomson/First Call consensus price target for the stock is set at $110.38. The shares closed on Friday at $95.97 apiece.


Colgate-Palmolive

This top dividend payer is also a very safe play for investors. Colgate-Palmolive Co. (NYSE: CL) is the stock to buy in consumer staples. The company continues to deliver solid execution and is one of the best-positioned companies in the consumer staples sector, given its strong brands in attractive categories, particularly oral care.

More than half (52%) of total revenues at Colgate-Palmolive are derived in faster-growth emerging economies, and the company maintains leading or near-leading market shares across the Brazil, Russia, India, China (BRIC) regions. While those have slowed over the past year, a pickup in growth could be coming.

Colgate-Palmolive’s board of directors recently increased the quarterly common stock cash dividend by 3%. The company has declared a new quarterly dividend of $0.39 per share on its common stock. The dividend will be paid Monday to shareholders on record at the close of business on April 22, 2016.

Colgate-Palmolive investors are now paid a 2.3% dividend. The consensus price target for the stock is listed at $73.59. Shares closed near that on Friday at $71.67.