Stanley Black and Decker (SWK)

Great managers. Trading at 16x earnings. Strong balance sheet and international growth. They continue to buy smaller tool manufacturers like the Sears Craftsman line. They will grow its dividend. (1.8% dividend, Analysts' price target: $178.06)

The home building and material sector has gone through a correction over the past few months. He believes the bull cycle will resume and thinks this could be starting now. He just doesn’t think this is one of the leaders in the group. He would like to see a move back above $145 before he would get excited. He would favour Home Depot instead.

The long term uptrend has ended and is definitively in a new down trend. Until that changes, he would stay away. (Analysts’ price target is $184)

(A Top Pick May 24, 2017. Up 7%). This is a great company. They recently acquired Craftsman Tools from Sears. This is a good play on both the new home market and renovations. He expects price increases in the latter half of this year which will help. The proposed tariffs on steel and aluminum have affected them, but 40% of their sales are outside the US. They have a proprietary battery that they are considering using in all of their tools, which would improve customer retention. He is buying more, expecting a stock price rise toward the end of the year.

(A Top Pick April 12/17 - Up 5%) Owned it for a long time. They recently added. One of the best management teams in terms of integrating acquisitions in the tool business. Cheap on an earnings multiple basis. Great long-term growth story.

(A Top Pick Jan 19/17, Up 28%) Fantastic track record of growth as the largest hand-tool company in the world. Fantastic M&A track record of successful integration. Strong balance sheet. Strong growth worldwide. A dividend grower. The weak US dollar will boost their bottom line looking forward with 50% of sales international. They also produce innovative tools using RFID; they re-invested their money in technology.

They have power tools, fasteners and security divisions, less than 18 times earnings and a good balance sheet. They invested in Craftsman from Sears. 55% of revenues are from the US and the rest are from outside. They raised the dividend for 50 years. (Analysts’ target: $183.00).

It is probably a little richly valued for him, but the trend is quite good. Industrials should do better. You will see continued demand loosely tied to housing and infrastructure.

He likes this because it gets him exposure to consumer spending, home renovations and the housing market without having to take on 3 distinct companies. They just sold a component of their locks division, which he views as positive. They have a new component for their tool side, coming out with a battery that works with everything and should generate good numbers for them. A positive balance sheet and some good strength sales in Europe. Dividend yield of 1.7%. (Analysts’ price target is $150.)

A global provider of tools and security systems. Every acquisition they’ve integrated has been flawless. It has been a great, great long-term investment. Great earnings growth and great dividend growth. They always under promise and over deliver. A great way to play the growing economy. Dividend yield of 1.8%. (Analysts’ price target is $140.)