There are probably as many investing strategies as there are investors – but just because every investor will follow his own path and intuition, doesn’t mean that there can’t be some common themes. Whether it’s seeking out stocks with low share prices or solid growth potential, or following the market’s best dividend payers, some strategies come up over and over again.
One of these common themes to is to follow the money, that is, to buy into cash-rich stocks. These will bring several advantages to the table, as their deep pockets will help to insulate them against economic shocks and give them the resources to withstand most headwinds. Additionally, many cash-rich stocks are also known for making generous capital returns to shareholders, through combinations of share buybacks and dividend payments.
The stock analysts at Goldman Sachs are following this path, and seeing the US economy as currently in a slowdown phase, during which investors traditionally favor a safety-first approach, they have been pointing out deep-pocketed stocks that are offering total returns of at least 11%. These aren’t necessarily the biggest dividend payers – but their combinations of cash reserves, buybacks, and dividend payments give them total returns that will easily beat inflation and provide investors with a ‘place of safety’ as a possible recession looms on the horizon.
We’ve opened up the TipRanks database, to pull the details on two of these Goldman picks. Let’s see just what these stocks have to offer and check out the comments from Goldman’s analysts.
Tapestry, Inc. (TPR)
The first stock we’re looking at, Tapestry, is based in New York. It’s a multinational holding company, and the owner of three well-known names in luxury fashion: Coach, Kate Spade, and Stuart Weitzman. Tapestry’s brands are operated as independent entities, although they share a common commitment to authenticity, excellence, and innovation. As a luxury retailer, Tapestry has a global reach. The company strives to turn its customer base into an empowered commercial community, and to turn the fashion industry toward sustainability.
In August, Tapestry announced it had entered a definitive agreement to acquire Capri Holdings, a firm that, like Tapestry, is a parent company to three luxury fashion brands. The acquisition will bring Capri’s brands, Versace, Jimmy Choo, and Michael Kors, under the Tapestry umbrella. Tapestry, the acquiring firm, will…