Stocks to buy

My latest gallery of stocks to buy are investments that investors might want to consider holding for years to come.

However, there’s a catch. I won’t necessarily be suggesting stocks like Apple (NASDAQ:AAPL) or Microsoft (NASDAQ:MSFT). But don’t be alarmed. All seven names are excellent businesses.

Let me explain.

On, the Swiss apparel and footwear brand, which counts Roger Federer as an investor, went public on Sep. 14 at $24 a share. The brand’s corporate name is On Holding (NYSE:ONON). It’s up more than 24% in the six weeks since its IPO.

If you follow my writing, you might know that I like to have some fun with my galleries. FYI, galleries are articles like this one that recommend or discuss more than one stock.

Here’s a recent example of a fun gallery I’ve done.

Anyway, in this article, I’ll be looking to find seven stocks to buy that have the word “holding” in their corporate name. To widen the field, this includes the plural holdings. A holding company is a parent company that doesn’t conduct its own business but holds shares of one or more other companies and other assets.

A search on Finviz gives 76 stocks with a market capitalization of $2 billion or higher with “holding” in their names. Unfortunately, the search results end partway through the alphabet, so there aren’t any symbols starting with the letters I through Z in the list, but I’ve made the best of it with a diversified list of options:

  • Ashland Global Holdings (NYSE:ASH)
  • Camping World Holdings (NYSE:CWH)
  • Capri Holdings (NYSE:CPRI)
  • Celsius Holdings (NASDAQ:CELH)
  • Athene Holding (NYSE:ATH)
  • Hill-Rom Holdings (NYSE:HRC)
  • Atlas Air Worldwide Holdings (NASDAQ:AAWW) 

Stocks to Buy: Ashland Global Holdings (ASH)

Source: Shutterstock

My friends nicknamed me “Ash,” which is short for Ashworth, my surname. So, when I saw Ashland on the list, and it has a solid business, I just had to include it.

Ashland spun off its Valvoline (NYSE:VVV) business unit in a two-step separation process, starting with the sale of 34.5 million shares of VVV stock at $22 on Sep. 28, 2016. That worked out to 17% of Valvoline’s business. The remaining 83% stake was distributed on a tax-free basis on May 12, 2017. As a result, Ashland shareholders received 2.745338 shares for every share held in the parent.

Today, one share of ASH and 2.745338 shares of Valvoline are worth more than $190, up from around $116 where Ashland stock traded before the spinoff (after accounting for a split that occurred around the time of the spinoff).

Those aren’t huge returns. However, Valvoline announced on Oct. 12 that it would split its business into two companies: Retail Services and Global Products. The Retail Services business has almost 1,600 quick-lube stores and $1.2 billion in sales. The Global Products business sells its motor oil worldwide. It has sales of approximately $1.8 billion.

So, the extraction of value for Ashland Global shareholders has yet to be fully exercised.

As for Ashland Global itself, it has a trailing 12-month free cash flow (FCF) of $426 million. Based on a market cap of $5.9 billion, it has an FCF yield of 7.2%, which puts it very close to the 8% yield I consider value territory.

Camping World Holdings (CWH)

Source: IgorGolovniov / Shutterstock.com

If you watch the CNBC show The Profit, you might be aware that Marcus Lemonis, the show’s star, is also the Chairman and CEO of Camping World. America’s largest retailer of recreational vehicles (RVs) with 176 RV dealerships and 10 RV service and retail centers.

The company had quite a second quarter with sales hitting a record $2.06 billion, 28.3% higher than a year earlier. In addition, its gross profit margin increased by 644 basis points to 36.9%. It’s no wonder then that its net income in the quarter was a record $246.1 million.

The company aims to hit $1 billion in adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) over 12 months. As of June 3o, its TTM adjusted EBITDA was $779 million. It may hit this goal by the middle of fiscal 2022.

Camping World’s TTM FCF is $522.5 million. Based on a market cap of $3.27 billion, the company has an FCF yield of 16%. Like I said while discussing ASH, I consider anything over 8% to be in value territory.

If you’re wondering, Lemonis holds 52.6% of the votes, so not only is he the CEO, he’s also very much in control.

I like everything about the RV business. Always have.

Stocks to Buy: Capri Holdings (CPRI)

Source: Tada Images / Shutterstock.com

If you haven’t followed the retail industry for several years, you might not know that Capri is the holding company for Michael Kors, Jimmy Choo, and Versace.

The Versace brand got some bad news recently. CEO Jonathan Akeroyd announced that he would leave Versace at the end of March 2022 to be closer to his family in the U.K. He will become the CEO of Burberry Group (OTCMKTS:BURBY) at that time.

Fortunately, Capri has a deep bench of talent to keep things running at Versace until a new CEO can be found.

“Versace has an exceptional management team in place, led by the innovative design vision of Donatella Versace, and we remain confident in the luxury house’s long-term growth potential,” stated Capri CEO John Idol in its press release announcing the departure.

In late July, Capri announced Q1 2022 results. Highlights of the quarter included all three brands exceeding company expectations for sales and earnings. As a result of the better-than-expected results, it raised its guidance for all of 2022.

It now expects to generate $5.3 billion in sales with an operating profit of $848 million. Michael Kors is expected to account for 70% of its overall revenue.

CPRI stock is up 139% over the past year.

Celsius Holdings (CELH)

Source: Shutterstock

I don’t know what your definition of a momentum stock is. Still, the maker of functional calorie-burning beverages under the Celsius brand name fits the description from my vantage point.

CELH stock is up 89% year-to-date, 345% over the past year, and 114% on an annualized basis over the past five years. It remains on fire despite these gains.

Over the past few months, I’ve been conflicted about this company.

In late July, I recommended that holders of CELH might consider taking profits as its valuation had gotten ahead of itself. Better to buy back in when it drops into the $40s. It never happened. $65 was as low as it got.

More recently, I reversed course, suggesting that Celsius is bound to be one of those stocks that always seem too expensive to buy. And so, you never do, losing out on a tremendous amount of capital appreciation.

In 2020, I thought it could be a micro-cap to buy and hold for the next decade. However, until it delivers a couple of poor quarters, I need to hold steady in my thoughts on this one.

This time next year, we could be saying CELH seems too expensive to buy at $200.

Stocks to Buy: Athene Holding (ATH)

Source: Shutterstock

Apollo Global Management (NYSE:APO) held its investor day event on Oct. 19. CEO Marc Rowan said the alternative asset manager expects that its assets under management will double to $1 trillion by 2026.

It plans to achieve this lofty goal by expanding its business units, including its insurance platform. That’s where Athene Holding comes in.

Apollo currently owns 35% of Athene; it generates 30% of its fee-related earnings revenue. However, Apollo’s ownership of Athene sits on its balance sheet as a $2.5 billion asset that produces no fees.

So, in March, it announced it would buy the remainder of Athene in an all-stock transaction that would value the merged Apollo/Athene entity at $29 billion.

Athene is a leading retirement services company. It is one of the largest providers of fixed index annuities in the U.S. Since its founding in 2009; it has generated adjusted book value growth of 17% annually through Q2 2021.

In 2015, Athene had $67 billion in assets under management. Over the next six years, these assets experienced compound annual growth of 21% to $207 billion. The company makes money through investment spreads.

Athene is a money machine.

Whether you buy Athene or APO stock before the merger is up to you; in either case, you ought to benefit long-term.

Hill-Rom Holdings (HRC)

Source: sfam_photo / Shutterstock.com

In April 2017, I included Hill-Rom Holdings’ former stablemate, Hillenbrand (NYSE:HI), in a gallery of retirement stocks that nobody talks about. The two companies were split up in 2008.

Hill-Rom outperformed HI in the 54 months since. It’s up 119% vs. 26% for the maker of caskets. I guess investors value hospital equipment and medical supplies over the death industry.

However, most of the gains have come from Baxter International’s (NYSE:BAX) bid to acquire it. In July, Baxter bid $144 per share for the company. Hill-Rom rejected that bid. On Sep. 2, Baxter upped its offer to $156 a share. If successful, the large-cap maker of surgical products will pay $10.5 billion in cash for the equity, plus it will assume $1.9 billion in debt.

Hill-Rom stock is currently trading $2 below Baxter’s offer price. Should Hill-Rom find a superior proposal, Hill-Rom would have to pay Baxter a $367 million termination fee.

While I wouldn’t say it’s likely, merger arbitrage is still in play.

Stocks to Buy: Atlas Air Worldwide Holdings (AAWW)

Source: Shutterstock

If you’ve got ongoing cargo transportation needs, Atlas Air is the company you call. It provides aircraft, crew, maintenance, insurance (ACMI) and other services for those who need it.

A big part of its business involves ACMI. In other words, you provide the contents, and it provides the cargo transportation and everything else required to operate a cargo plane.

However, due to its ACMI and charter businesses becoming so similar in recent years, it merged those two businesses into what’s now called Airline Operations. This segment accounts for 95% of its quarterly revenue.

In the first six months of 2021, AAWW’s revenues were $1.85 billion, 26.1% higher than a year earlier. Its operating income was $264.3 million, 45.4% higher than in the first half of 2020.

As of June, the company had 17 767-300 aircraft flying for Amazon Fulfillment Services. In addition, it provided Amazon (NASDAQ:AMZN) with 19 767-300 aircraft for Dry Lease services. These dry leases are generally for 10 years.

Atlas Air has the equivalent of 107.2 aircraft operating at the moment, many of which are 747s.

Given the current supply chain mess, I imagine Atlas Air will be very busy for the foreseeable future.

On the date of publication, Will Ashworth did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Will Ashworth has written about investments full-time since 2008. Publications where he’s appeared include InvestorPlace, The Motley Fool Canada, Investopedia, Kiplinger, and several others in both the U.S. and Canada. He particularly enjoys creating model portfolios that stand the test of time. He lives in Halifax, Nova Scotia.

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