Ken Fisher says that, with the bull market maturing, investors can make hay by keying on star CEOs.
“Usually the first third of a bull market is led by stocks bouncing back from getting crushed in the prior bear,” Fisher writes in his latest Forbes column. “But the last two-thirds of bulls are usually led by high-quality stocks, and particularly ones that weren’t perceived to be high quality early on. These companies are often thought to have ‘hero’ CEOs. The later stages of bull markets tend to generate a flock of them.”
Fisher says that many of these “hero” CEOs get wiped out in the next bear market. “Still, real hero CEOs can materially boost a firm’s multiples in the years ahead,” he says, noting that his “hero” CEOs include Warren Buffett, Steve Jobs, Howard Schultz, and Richard Branson. “They are all larger than life, and their stocks’ prices reflect them,” he says. “Smart investors seek to find future hero CEOs early.”
Fisher thus takes a look at five companies with hero CEOs whose shares he thinks will benefit as this bull matures. Among them: Xerox’s Ursula Burns and Steel Dynamics’ Keith Busse.