Following your favourite quality stocks takes time, but the results can be well worth it. Good companies usually have steady track records of financial strength and performance. Other times, short-term problems can crop up, sending the stock down.
Peter Lynch, the author of the famous investing book One Up on Wall Street, wrote that investing is like playing stud poker. In the game you have to make the best hand with just 7 cards, betting with each new card revealed over time.
The great thing about Lynch's investing stud poker is that he thinks investing is more like getting a 70-card hand. With that many cards, you are going to get some low cards, but by being patient, eventually enough good cards can come out to make a winning hand.
One bad half year or year for a regularly good stock can be disappointing and make investors wonder if they should ditch their shares. Foolish investors know that this is how you can pick up those stocks that you always wanted to buy at cheaper prices.
Super Retail Group Limited (ASX: SUL), the specialty retailer which operates such brands as Supercheap Auto, Rebel Sports, BCF and Amart Sports is down almost 17% in the last two months.
The market is used to seeing its earnings grow at higher rates, so the thrill is gone for some investors. Two new distribution centres being developed now will create cost savings that will improve earnings margins. Also, a higher Aussie dollar allows the company to import goods at lower prices for better price spreads. It offers a hefty 4.4% dividend yield for income-conscious investors. Picking up Super Retail Group shares now can be a good start if the stock rebounds.
Flight Centre Travel Group Ltd (ASX: FLT)
The well-known holiday and travel booking agency has also tumbled about 17% since late April. It has a dividend of 3.3%. Analyst forecasts have earnings growing steadily over the next several years. For a company with a great earnings track record, this could be a great opportunity while the stock is taking a "breather" from its fantastic share price run-up in the past two years.
