Cisco Systems And ON Semiconductor Make The 30-30 Club
Welcome to the updated edition of the 30-30 Club, a prestigious accolade that identifies corporations demonstrating superior growth and efficiency, much like its baseball namesake where players achieve 30 home runs and 30 stolen bases in a single season. Think of Willy Mays, Barry Bonds, and Mike Trout. However, in the corporate world, this elite club celebrates companies that have managed not only to grow their profits by 30% annually over five years but also to achieve a 30% return on stockholders’ equity.
This year, the club has become even more exclusive with only 27 companies making the list, a decrease from previous years. This exemplifies the rigorous standards and spotlight on those truly excelling in their financial performance and shareholder value creation.
Among these distinguished companies, certain stocks stand out not only for their excellent financial performance but also for their investment potential. This year, we shine a light on five recommended stocks, including the notable Cisco Systems Inc. and ON Semiconductor Corp.
Cisco Systems Inc., headquartered in San Jose, California, leads the market in computer-networking. Despite a challenging stock market performance in the past five years, the company has consistently increased its sales and earnings, boasting 22 consecutive years of profitability.
ON Semiconductor Corp. specializes in manufacturing computer chips for the automotive industry, impressively growing profits by 44% annually over the past five years. Though growth has slightly slowed, the company’s profits remain strong, with its stock priced attractively at 14 times earnings.
Other recommended companies include Axcelis Technologies Inc., Atkore Inc., and Builders FirstSource Inc., each delivering strong performance in their respective sectors—from semiconductor production equipment to construction materials supply.
While these five companies are specially highlighted, it’s important to recognize all members of the 30-30 Club for their outstanding achievements. Notables include large corporations such as Deere & Co., Chipotle Mexican Grill Inc., and Autodesk Inc., among others. Each demonstrates exceptional growth and efficiency, marking them as leaders in their industries.
Reflecting on the past year’s recommendations, notable successes included Super Micro Computer Inc., which saw a striking 789% gain, contributing to an average collective rise of 185% for the five recommended stocks from the previous year. This performance significantly outpaced the Standard & Poor’s 500 Total Return Index, underscoring the potential value of investing in these high-growth companies.
Over the years, recommendations from the 30-30 Club have consistently outperformed, with an average annual return of 19.1%, compared to the S&P 500’s 8.7%. These outcomes attest to the strength of the Club’s criteria for identifying companies poised for outstanding financial performance and rewarding investment opportunities.
It’s prudent to note that while past performance is illuminating, it does not guarantee future results. Investments should always be made based on thorough analysis and consideration of one’s financial situation and risk tolerance.
Disclosure: The author notes personal and client investment in Merck, Encore Wire, and Nucor, showcasing a belief in the ongoing potential of these companies.
In closing, the 30-30 Club continues to highlight the achievements of companies that excel in both profitability and equity returns. As the market evolves, these businesses stand out as benchmarks of success, embodying the spirit of excellence we cherish in both sports and the corporate world.
