Stick With Your Winners

Everyday I follow the same routine. I look for any material news from the hundreds of stocks I already follow. I peruse Wall Street’s upgrades and downgrades, earnings reports, and I run my screens looking for new opportunities.

Often, though, I find it pays to stick with your winners. At any given time, there are only a few really solid wealth creating companies in the marketplace. Sure, many stocks go up and down in value and there is opportunity to make money trading, but the fact of the matter is that trading stocks is a difficult thing to do. It’s also difficult to be successful at it for an extended period of time.

This is why it pays to find good companies that are well managed and growing. Let time and the company’s management do the day- to-day worrying for you.

When I think about a company with a track record of success of creating wealth for stockholders, I think of VCA Antech (NASDAQ/WOOF). This company is part of my affinity for the petcare industry.

VCA Antech makes money by providing traditional, small-animal veterinary services in local communities, but it also makes money by providing laboratory services to other veterinarians. This is a great strategy.

Not only does the business have two solid revenue streams, the laboratory business builds relationships with private veterinary clinics that may want to cash out someday and become part of the VCA Antech team.

The company is a proven consolidator in the veterinary hospital industry so this business strategy makes sense.

I like this company for many reason, but one reason that stands out is that no matter what happens to the economy, people will spend money on their pets because they are members of the family. In a sense, it is a kind of recession-proof business.

Consider then the stocks that are in your portfolio. You might like to trade stocks for capital gains and the excitement. But, at the end of the day, some of the biggest moneymakers are those companies that grow their business in a diligent and deliberate manner.