Buy and Hold U.S. Stock Ranking de empresas of the sector basic materials

BUY AND HOLD STRATEGY: WHAT IS IT AND HOW DOES IT WORK?

The Buy and Hold strategy is a long-term investment method in which investors buy stocks of solid companies and hold them for a prolonged period, regardless of market fluctuations.

The idea is to capture potential returns over time, relying on the growth of companies and avoiding frequent trading. Although it requires patience and discipline, this approach seeks to take advantage of the continuous growth potential of the chosen companies, aiming for significant returns over the years.

How does the Buy and Hold Stocks Ranking work?

The Buy And Hold stocks ranking is an amazing feature we have here at Investor10. But first of all, it is important to point out that the ranking is merely informative and should not be seen as a recommendation to buy or sell stocks.

To generate this ranking, we created a list with criteria based on parameters popularly known in the financial market, which aims to help investors who adopt the Buy and Hold philosophy to find investment options.

Each checklist criterion met by a given company generates a score. At the end of the list, we can establish a score for the company.

See what the checklist criteria are:

Companies with more than 5 years on the Stock Exchange

One of the criteria we use is the time a company has been listed on the Stock Exchange. A company with more than 5 years on the Exchange generally demonstrates some stability and maturity in the market, having gone through a significant period of trading and probably faced different economic conditions and market challenges over that time.

ROE above 10

ROE is nothing more than return on equity. An ROE above 10 is generally seen as a positive indicator, as it suggests that the company is efficiently using shareholders resources to generate profits.

However, it is important to note that the interpretation of ROE may vary depending on the company's sector and other factors. Sectors with higher profit margins, such as technology, may have higher ROEs than sectors with lower margins, such as retail.

Revenue growth in the last 5 years

This is another criterion that makes up our checklist. A company that has shown revenue growth in the last 5 years means that its total revenue has consistently increased over that period, covering 20 consecutive quarters.

Revenue growth is a positive indicator. This can result from several factors, such as increased sales, expansion into new markets, introduction of new products or services, among others. In this criterion, we use the 5-YEAR REVENUE CAGR indicator above 10%.

Company has daily liquidity above US$ 2M

When an asset has good daily liquidity, it means it can be easily bought or sold in the market. This indicates high demand and a large trading volume for that asset. In the checklist criterion, we use daily liquidity above R$ 2 million.

Companies that have never had a loss (fiscal year)

Companies that have never had a loss in the fiscal year are those that have reported profit in their financial statements after deducting all expenses and taxes. A company that has never had a loss in its fiscal year is generally considered financially sound and well managed. This may indicate efficient cost management and an ability to generate consistent revenue.

Dividend-paying companies (above 5% per year)

Dividend-paying companies are those that distribute part of their profits to shareholders as dividends. In this criterion, an average above 5% per year is considered, over the last 5 years. This may also mean that the company has a history of regularly distributing dividends.

Debt less than equity

Debt less than equity is generally considered a favorable financial position for a company. This indicates that the company has a balanced capital structure, with sufficient equity to cover its debts. In addition, lower debt relative to equity suggests lower financial leverage and lower default risk. In this criterion, we consider gross debt / equity to be less than 1.

Profit growth in the last 5 years

Profit growth is generally a positive indicator, as it shows that the company is increasing its profitability and operational efficiency. This can result from several factors, such as increased sales, cost reduction, expansion into new markets, improved financial management, or the launch of successful products or services. In this criterion, we use the 5-YEAR PROFIT CAGR indicator above 10%.

Investor10 user ratings

The last checklist criterion is based on Investor10 user ratings. We mark the checklist when the average user rating for the company is above 4 stars (4/5).

How does the ranking score work?

Each stock has a maximum of 100 points on the checklist. Each criterion met is worth 10 points. Thus, at the top of the ranking are the companies that scored the most points according to the Buy and Hold strategy.

It is worth noting that in addition to the ranking, it is possible to view the score of each company on their respective pages.