The Three Blue Chips You Must Own

12/27/2010 4:45 pm EST

Focus: STOCKS

Richard Young

Editor, Young's Intelligence Report

Richard C. Young, editor of Intelligence Report, recommends an aerospace giant as well as a famous burger franchise and an even better known drinks purveyor.  

1) United Technologies (NYSE: UTX)
Invest in companies with significant advantages compared with their competitors. United Technologies has been one of my top-ten picks for 11 of the past 18 months. You can see on my relative-strength chart that UTX has beaten the S&P 500 by 50% over the last five years. Innovation is what keeps UTX ahead of its competitors—innovations like the record-breaking Sikorsky Aircraft X2 Technology Demonstrator. The X2, built by Sikorsky, a UTX subsidiary, has broken the unofficial helicopter speed record, flying at 250 knots. The X2 uses two sets of rigid blades stacked atop one another and a propulsion propeller that achieves amazing hover and speed capabilities. Look for X2-inspired helicopters in the air soon.


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2) McDonald’s (NYSE: MCD)
McDonald’s banged out substantial sales growth in all its major markets during October, with 6.5% comparable sales growth worldwide. The sales were driven by McDonald’s deep knowledge of each individual market. In the US, core menu items like Chicken McNuggets ruled the day. In Europe, customers were drawn to wide menu variety and updated restaurants. And, in Asia and the Pacific, McDonald’s drew in business by mixing special local menu items and traditional golden-arches fare. Determining customer expectations and performing to those expectations seems to be easy for McDonald’s today. My long-term chart shows McDonald’s narrowly below trend. Buy below trend while you still can.


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3) Coca-Cola (NYSE: KO)
Coke is a branding story. The people at Coca-Cola are masters at building brand recognition. Coke has topped Interbrand’s ranking of the world’s most valuable brands since 2001 when the rankings began. Interbrand estimates that the Coke brand is worth more than those of McDonald’s and Disney combined. Coke is poised to break out above its previous peak price near $65. Add to or initiate your position today.


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[United Tech, Coke, and McDonald’s currently offer yields of 2.2%, 2.7% and 3.2%, respectively. For more on high-yielding blue chips, check out the recommendation of Johnson & Johnson (NYSE: JNJ) by Josh Peters and Taesik Yoon’s update on Microsoft (Nasdaq: MSFT)—Editor.] 

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