'Everybody Is Chasing The Next AI Hype,' Says Investor. But They're Asking: What Are The Boring Stocks With 'Tech-Like Returns?'
'Everybody is chasing the next AI hype,' they said, mentioning companies like Palantir (NASDAQ:PLTR), Rocket Lab (NASDAQ:RKLB) and even semiconductors. When someone mentions semiconductors, they typically refer to companies that design or manufacture these chips, like Nvidia (NASDAQ:NVDA), Advanced Micro Devices (NASDAQ:AMD), or Intel (NASDAQ:INTC).
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Plenty of Reddit users responded with names most mainstream investors overlook. These weren't meme stocks or hot IPOs, but legacy industrials, auto parts retailers, and HVAC firms.
'Before the most recent sell-off Berkshire was at 194% in 5 years,' one investor noted about Berkshire Hathaway (NYSE:BRK, BRK.B)). 'Sitting at 165% right now. Better than all the Mag 7 except Nvidia and Meta (NASDAQ:META). Boring as hell and doing rock solid.'
Several mentioned Parker-Hannifin (NYSE:PH), which specializes in motion and control technologies. Others highlighted Ingersoll Rand (NYSE:IR), Eaton Corp. (NYSE:ETN), and Trane Technologies (NYSE:TT) as industrials that quietly beat the S&P 500 over long periods.
One user summed up the appeal by asking: 'How many people on the planet took a sh*t this morning, and/or turned on the heat or AC?' The message: boring businesses that keep infrastructure running are everywhere, and often profitable.
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Another favorite was Comfort Systems USA (NYSE:FIX), which installs HVAC systems. One investor called it 'very well-performing' and compared it to IES Holdings (NASDAQ:IESC), which has outperformed the market over the past 10 years by 32.69% on an annualized basis, producing an average annual return of 43.61%.
Comfort Systems itself has outperformed the market over the past five years by more than 51% on an annualized basis, producing an average annual return of 65.31%.
'I inherited FIX which had done VERY well,' one user said. 'But I sold it for very petty and personal reasons lol.'
Casey's General Stores (NASDAQ:CASY), a convenience store chain with more than 2,900 locations, was called out as a quiet outperformer. One Reddit investor wrote: 'It has a better 5-year return than Tesla (NASDAQ:TSLA) and it pays a dividend.'
Fair Isaac Corp. (NYSE:FICO), the company behind FICO credit scores, was another standout. It has soared 352% over the last five years.
AutoZone (NYSE:AZO) and O'Reilly Automotive (NASDAQ:ORLY) also earned praise for delivering steady gains while operating in a no-glamour sector.Dollarama, Canada's version of Dollar Tree (NASDAQ:DLTR), has surged over 300% in the past five years. Nutrien, the world's top potash supplier, is up 92% over that span.
Some mentioned European companies like Rheinmetall, a German defense stock up 2,200% in five years. Others nodded to Fairfax Financial, a Canadian insurer with a 500% return in five years.
While the tech crowd continues to ride waves of speculation, some long-term investors are betting on plumbing, autoparts, fertilizer, and insurance. As one investor in the thread put it, 'Unless we have Armageddon tomorrow, yes, absolutely' these companies are still worth buying.
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