Stock Market Predictions, Revisited

Big news from a top wealth-creating company — one that’s been a favorite of mine for several years: VCA Antech (NASDAQ/WOOF) announced a major acquisition where it wants to buy another animal-hospital consolidator for approximately $153 million in cash.

Over the last four years, VCA Antech’s stock price has quadrupled as the company generated solid revenue and earnings growth from operating animal hospitals and veterinary laboratories. In my mind this company tells a great story. The veterinary business is almost recession-proof.

Things will change for VCA Antech as it bulks up with this latest acquisition. The company is running out of animal-hospital chains to purchase. Growth will slow at this company, but I think it will continue to provide solid returns to investors over the next several years.

In early March, I wrote in this column about another great company: Companhia Vale do Rio Doce — a world leader in the mining and steel production industry. Since then, Companhia Vale do Rio Doce (NYSE/RIO) is up $10.00 per share to its current level of around $44.00 per share.

Considering this company’s market capitalization is just over $100 billion, I’d say that’s not a bad performance in two months’ time. Clearly, you can do equally as well speculating in large-cap stocks as you can with small-caps.

Another company I wrote about a few months ago, Trina Solar (NYSE/TSL), is also doing great. They have now doubled in value since we talked about it in February. This pure-play China stock is still one of the hottest speculative stocks in the market today. I don’t know how well this stock will do from its current level; the best opportunity for it was in February. I do know that there continues to be solid investor enthusiasm for solar energy stocks and particularly those manufacturing solar products in China. One thing’s for certain: there’s no shortage of excitement in the stock market right now.