Investing doesn’t always have to be about high growth or low risk. Sometimes a reasonable risk to reward is what you are after. When I think of investing in three stocks that fit that bill, I’m heavily in favor of L Brands Inc (NYSE:LTD), QUALCOMM, Inc. (NASDAQ:QCOM), and Ford Motor Company (NYSE:F). A little unconventional portfolio, right? Let’s look at these three stocks to see how they fit.
Source: Ycharts
The thesis behind L Brands
L Brands Inc (NYSE:LTD) sells lingerie and apparel in mall locations through its Victoria’s Secret Brand. The company is focused on remodeling its stores, expanding it store footprint internationally, and expanding the Pink brand into its own separate retail chain.
L Brands Inc (NYSE:LTD) trades at a 19.1 earnings multiple (retail apparel companies trade at a 20.9 earnings multiple on average). The company’s somewhat higher earnings multiple is due to the premium associated with the consistent rate of growth the company’s management team has been able to accomplish over the past five years.
The stock is pretty safe. L Brands Inc (NYSE:LTD) has a short-term cash cushion with a 1.434 current ratio, meaning the company can afford to pay its short-term liabilities and still have 43.4% left over to pay for whatever emergency situation that may come up.
Analysts on a consensus basis anticipate the company will grow earnings by 11.80% on average over the next five years. The company also offers investors a 2.41% dividend yield (10-year treasuries have 2.01% yield currently).
Semiconductors offer astounding value
QUALCOMM, Inc. (NASDAQ:QCOM) is another favorite on my list. Qualcomm is in the business of licensing its semiconductor technologies to any mobile phone manufacturer. The company is heavily focused on mobile solutions. This involves antennae technologies like the QUALCOMM, Inc. (NASDAQ:QCOM) LTE Advanced (Global 4G solutions) along with mobile chipset solutions like the Snapdragon processor based on the ARM chip design.
The company is projected to grow earnings by 18% on average over the next five years. The company also trades at an 18.1 earnings multiple, which implies that the company’s growth is fairly priced into the valuation of the stock. The stock comes with a 2.18% dividend yield in order to compensate investors for the risk. The company’s 3.1 current ratio implies that the company is safe from any short-term cash needs.
The growth is undoubtedly healthy as IDC estimates that the markets for smartphones will double between 2012 and 2016 to 1.4 billion units annually. Gartner also estimates that the tablet market will grow from 125 million units in 2012 to 375 million by 2016. The growth in mobile computing is advantageous for QUALCOMM, Inc. (NASDAQ:QCOM) shareholders as QUALCOMM, Inc. (NASDAQ:QCOM) remains one of the primary suppliers of chipsets and antennae for smartphones.
When Jeff Bezos said that one breakthrough technology would shape Amazon’s destiny, even Wall Street’s biggest analysts were caught off guard.
Fast forward a year and Amazon’s new CEO Andy Jassy described generative AI as a “once-in-a-lifetime” technology that is already being used across Amazon to reinvent customer experiences.
At the 8th Future Investment Initiative conference, Elon Musk predicted that by 2040 there would be at least 10 billion humanoid robots, with each priced between $20,000 and $25,000.
Do the math. According to Musk, this technology could be worth $250 trillion by 2040.
Put another way, that’s roughly equal to:
175 Teslas
107 Amazons
140 Metas
84 Googles
65 Microsofts
And 55 Nvidias
And here’s the wild part — this $250 trillion wave isn’t tied to one company, but to an entire ecosystem of AI innovators set to reshape the global economy.
It’s a leap so massive, it could reshape how businesses, governments, and consumers operate worldwide.
Even if that $250 trillion figure sounds ambitious, major firms like PwC and McKinsey still see AI unlocking multi-trillion-dollar potential.
How could anything be worth that much?
The answer lies in a breakthrough so powerful it’s redefining how humanity works, learns, and creates.
And this breakthrough has already set off a frenzy among hedge funds and Wall Street’s top investors.
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In fact, Verge argues this company’s supercheap AI technology should concern rivals.
Before I reveal the details, let’s talk about how some of the richest people on the planet are positioning themselves.
Bill Gates sees artificial intelligence as the “biggest technological advance in my lifetime,” more transformative than the internet or personal computer, capable of improving healthcare, education, and addressing climate change.
Larry Ellison — through Oracle, is spending billions on Nvidia chips and partnering with Cohere to embed generative AI across Oracle’s cloud and apps.
Warren Buffett — not known for tech hype — says this breakthrough could have a ‘hugely beneficial social impact.
When billionaires from Silicon Valley to Wall Street line up behind the same idea — you know it’s worth paying attention to.
Even as we admire what Tesla, Nvidia, Alphabet, and Microsoft have built, we believe an even greater opportunity lies elsewhere…
But the real story isn’t Nvidia — it’s a much smaller company quietly improving the critical technology that makes this entire revolution possible.
And judging by what I’m hearing from both Silicon Valley insiders and Wall Street veterans…
This prediction might not be bold at all:
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