Top Medical Companies To Invest In 2014

Every quarter, many money managers have to disclose what they've bought and sold, via "13F" filings. Their latest moves can shine a bright light on smart stock picks.

Today, let's look at Gardner, Russo & Gardner, a hedge fund company with a record that speaks for itself. Over the past 25 years, according to the folks at GuruFocus.com, it has posted a cumulative gain of about 2,115%, vs. 920% for the S&P 500. Over the past 10 full years, it gained 179%, vs. 100% for the S&P 500.

The company's reportable stock portfolio totaled $8.5 billion�in value as of March 31, 2013.

Interesting developments
So what does Gardner, Russo & Gardner's latest quarterly 13F filing tell us? Here are a few interesting details:

The biggest new holdings are AbbVie (NYSE: ABBV  ) and J.C. Penney. Other new holdings of interest include Sarepta Therapeutics (NASDAQ: SRPT  ) . AbbVie is half of the split-up of Abbott Labs�-- it retained the pharmaceutical business, while Abbott focuses on medical, diagnostic, and nutritional products. Bears don't like its heavy debt or its being very dependent on its blockbuster drug Humira, which generates half its revenue. But the company does enjoy about $18 billion in annual revenue, more than $6 billion in free cash flow, and gobs of cash. It has other drugs on the market, too, and more in its pipeline, tackling Hepatitis C, among other conditions. It also sports a 3.7% dividend yield.

Top Medical Companies To Invest In 2014: FUTURE GBP0.01(FUTR.L)

Future plc publishes special-interest consumer magazines and Websites in the United Kingdom, the United States, and Australia. The company?s Technology segment focuses on consumer electronics, computing, photography, and digital activities. It offers magazines, including T3, MacLife, MacFormat, Tap!, Maximum PC, Linux Format, Digital Camera, Practical Photoshop, PhotoPlus, .net, Computer Arts, and Windows: The Official Magazine; and techradar.com, T3.com, gizmodo.co.uk, maximumpc.com, maclife.com, T3 edition for iPad, Tap! edition for iPad, and MacLife Tablet edition Websites, as well as organizes T3 Gadget Awards, Digital Camera Photographer of the Year Awards, and .net Awards. The company?s Games segment offers console and PC gaming products comprising Xbox 360: The Official Magazine, Official PlayStation Magazine, Official Nintendo Magazine, Nintendo Power, PC Gamer, Edge, and GamesMaster magazines; and gamesradar.com, computerandvideogames.com, pcgamer.com, Qore, and Access TV Websites, as well as organizes Golden Joystick Award events. Its Music and Movies segment focuses on films and music. This segment provides Classic Rock, Metal Hammer, Guitarist, Total Guitar, Rhythm, Computer Music, Total Film, and SFX magazines; and Websites consisting of musicradar.com, totalfilm.com, and sfx.co.uk, as well as organizes events, such as Classic Rock Roll of Honour, Golden Gods Awards, Metal Hammer Live Tours, and High Voltage Festival. The company?s Active segment focuses on sports, automotive, hobbies, and crafts. It offers Procycling, Cycling Plus, Mountain Biking UK, Triathlon Plus, Fast Bikes, Fast Car, Total Vauxhall, Mollie Makes, Simply Knitting, CrossStitcher, Your Family Tree, and Your Knitting Life magazines; and bikeradar.com, cyclingnews.com, themakingspot.com, and weheartcraft.co.uk Websites, as well as organizes Stitch and Craft Show, TRAX, Total Vauxhall Live, and Ford Fair events. Future plc was founded in 1985 and is based in B ath, the United Kingdom.

Top Medical Companies To Invest In 2014: Torotrak(TRK.L)

Torotrak plc engages in the design and development of traction drive systems for vehicle makers and transmission manufacturers in Europe, North America, India, and Japan. The company licenses its patented traction drive technology for use in main drive transmissions for vehicles, such as buses, trucks, and small cars; variable drive pressure charging for fuel economy; and mechanical flywheels that recover braking energy. It also provides engineering consultancy services, including supporting projects through advice and helping customers to apply the Torotrak plc?s technology. The company was founded in 1988 and is based in Leyland, the United Kingdom.

Hot Heal Care Companies To Watch For 2014: VASCO Data Security International Inc. (VDSI)

VASCO Data Security International, Inc., through its subsidiaries, engages in the design, development, marketing, and support of hardware and software security systems that manage and secure access to information assets worldwide. The company offers hardware and software products in the areas of user authentication, electronic signatures, and digital signatures/public key infrastructure. It provides VACMAN Controller that supports multiple authentication technologies, including passwords, dynamic password technology, electronic signatures, digital signatures, and certificates and biometrics on one platform. The company also offers IDENTIKEY Server, a centralized authentication server that supports the deployment, use, and administration of DIGIPASS user authentication. In addition, it provides aXs GUARD Identifier, a standalone authentication solution, which offers two-factor authentication for remote access to a corporate network or to Web-based in-house business applicat ions; and aXs GUARD Gatekeeper that integrates DIGIPASS to provide secure two factor user authentication. Further, the company offers DIGIPASS product line exists as a family of software and hardware client authentication products and services for authenticating users to any network, including the Internet. Its DIGIPASS solution calculates dynamic signatures and passwords to authenticate users on a computer network and for various other applications. The DIGIPASS technology is also designed to operate on desktop personal computers or laptops, personal digital assistants, mobile phones, and smart cards. VASCO sells its security solutions through its direct sales force, as well as through distributors, resellers, and systems integrators. The company was founded in 1996 and is headquartered in Oakbrook Terrace, Illinois.

No Matter What the Market Is Doing, Don't Change the Way You Invest!

Last week I wrote about a few things investors should do if they knew a market correction was coming. The preparation for the impending correction was simple: Review your holdings to ensure your portfolio was still properly balanced so that no one stock commands the lion's share of your investable dollars, determine whether your investing thesis was still alive, and mentally prepare yourself for some possible short-term paper loses. Then sit back and let the market do what the market does, because even if the market declines in the short term, it tends to rise ever higher in the long term.

I got a number of reader comments on the article, but one stood out to me. Misterpotatohead wrote, "So how exactly does this strategy differ from any other period in the market cycle?"

Well, let's first look at the market and its cycles. My colleague Dan Caplinger recently published a great piece explaining that when we look at the history of the markets, we typically see three 5% corrections each calendar year, one 10% correction each year, and a 20% correction once every three and a half years.

Since nobody has a crystal ball to magically predict when each of these corrections is going to happen, I think we should approach investing with the assumption that a correction is always about to happen. A simple answer to Misterpotatohead's question, therefore, is that my strategy for how investors should act if they knew a correction was coming doesn't really differ from how investors should act at any other time. We should always be prepared so that we can sell stocks that have a broken investing thesis, pare back our big winners to rebalance our portfolios and spread the risk evenly, and have cash available so that when the markets or an individual stock pulls back, we can, as Warren Buffet says, unload our elephant guns and buy stocks at a discount to their intrinsic value.

Since the beginning of the year, the Dow Jones Industrial Average (DJINDICES: ^DJI  ) is up 15.35%, while the S&P 500 (SNPINDEX: ^GSPC  ) has risen 14.23%, and over the past five months we haven't yet seen any meaningful pullback. Not even a small 5% correction. The inevitable will happen, though. Stocks will decline in value. Fear will run high. Rational people will act irrationally. Billions of dollars will be lost simply because investors weren't prepared for the future.

Whether you're new to investing or an old pro, a few simple things will help you from adding your hard-earned cash to the billions that will be lost in the coming correction. First, take Morgan Housel's advice and memorize the five things we should all know about investing. In fact, double-memorize the first point. Then once you have a solid foundation and an understanding of how to make money through investing and what to avoid, never change your strategy, never forget the power of compounding interest over time, stick to your guns during the bad times, and prepare during the good times.

More Foolish insight
The best investing approach is to choose great companies and stick with them for the long term. The Motley Fool's free report "3 Stocks That Will Help You Retire Rich" names stocks that could help you build long-term wealth and retire well, along with some winning wealth-building strategies that every investor should be aware of. Click here now to keep reading.