Down 10% last year, this large-cap now looks priced to deliver solid rewards.
Today I want to tell you about one of my favourite blue chips -- and how I found it using what I call my 'no-thesis' approach to buying shares.
Now this approach is quite simple. You see, all I do is just look for straightforward and significant companies where potential share-price gains are not based on complicated stories, convoluted theories or chancy projections.
For example, my no-thesis approach rules me out of shares that have to...
- reignite sales
- sustain annual profit growth of 20%-plus
- reinstate the dividend
- undergo some sort of debt restructure
- constantly develop new products
- wait for the economy to pick up
- raise margins
- hope a rival goes bust
- attract a bidder, or
- strike oil
... before the share price starts to rise.
Instead, my no-thesis approach looks for companies that can just keep on doing what they've always been doing to deliver solid rewards to patient investors.
Chugging along nicely
As you may expect, my approach draws me to steady, blue-chip businesses. SABMiller (LSE: SAB) and Unilever (LSE: ULVR), for example, are ideal candidates for me, whereby they should be able to sell more drinks and deodorants every year to increase their profits.
With those types of companies, all I have to do is buy them at good-value prices -- to ensure I enjoy decent returns as the firms keep chugging along.
An idea from your cupboard
Now with all the fuss about eurozone debts, the predictability of SAB and Unilever has sadly been recognised by many investors. While the wider market fell last year, the share prices of that pair both reported gains as their earnings and dividends defied the gloom.
However, there is another steady blue chip that I am very keen on right now. Its shares fell 10% last year, but it -- similar to SAB and Unilever -- also sells well-known brands that shoppers buy week in, week out, whatever the economy is doing. Indeed, you probably have some of this large-cap's products in your cupboards right now.
A textbook 'no-thesis' opportunity
I have to admit, this particular large-cap does look like a textbook 'no-thesis' investment. In particular, the financial track record shows impressive progress during the last ten years, while sales, profits and the dividend have advanced commendably during the recession. As such, there is no turnaround, takeover or other long-shot event required to kick-start the share price.
Instead, all what's needed is this business to keep on selling its branded products to ordinary shoppers like you and me. If profits and the dividend can continue to rise at a reasonable pace, then my sums tell me the languishing share price ought to produce a very welcome return to buy-and-hold investors. Indeed, I see the price has already perked up this year.
Here's my free research
Anyway, I've produced a full report about this 'no-thesis' large-cap for you to study at your leisure. The report is free of charge to all ordinary Fools and comes without any further obligation -- you have my word on that. (You can also watch this short video, in which I provide one or two more clues to the large-cap's identity!)
My complementary research on this blue chip can be accessed right here. Good luck, and happy 'no-thesis' investing!
> The Motley Fool owns shares in Unilever.
