Dorfman: Pick Stocks with High Profits, Low Debt

The current spate of volatility in the stock market makes companies with strong profits and low debt burdens an attractive investment, writes Bloomberg columnist John Dorfman.

He cites several companies with a 25 percent return on equity last year and debt of less than 10 percent of equity.

The largest companies meeting those prerequisites are Apple, MasterCard, and Gap, says Dorfman, who also is chairman of Thunderstorm Capital.

Of those, he likes Gap best, because it has the lowest price-to-earnings ratio – 12, compared to 23 for Apple and 18 for Mastercard.

But Dorfman prefers several smaller stocks: Western Digital, Seagate Technology, Wet Seal, Loral Space & Communications, and Sturm Ruger. (more)