Help Amanda Make Her Next Pick

Today, you have the opportunity to shape the investing career of someone taking her first steps toward a lifetime of successful engagement with the stock market. And really, there's nobody you'd rather help than Amanda, the incredibly helpful, positive, wonderful Fool who greets people when they first arrive at Fool HQ. She's the kind of person who really means it when she sends you a smiley-face emoticon. : )

Amanda recognized early in her career at the Fool that although subsidized massages, a stocked game room, and unlimited vacation days are nice benefits, the most valuable thing she could take from her employment here (aside from her paycheck) was unlimited access to a world of investing knowledge. And so she dove right in.

Going the buy-what-you-know route, the one-time wedding planner (and recently married person) liked the business model of TheKnot.com (Nasdaq: KNOT  ) and appreciated the avenues it had taken toward expansion – into TheNest.com for everything from home décor to recipes to budgeting, and on to TheBump.com for all things baby. Being a good Fool, Amanda read the company's annual report, listened to quarterly analyst calls, and grabbed a friendly neighborhood analyst to talk through the numbers. Feeling good about TheKnot's prospects, Amanda dove into the market with her first purchase ever. It's performing well for her. Hurray!

Where next?
Inspired by her early success and invigorated by the idea of building a portfolio, Amanda's ready to find her next stock. But she is looking for some guidance.

"I'm not exactly sure where to go next," she says. "The analyst I talked to about TheKnot's numbers had some ideas, but semiconductors and insurance companies don't exactly fit into my circle of competence."

She decided to stick closer to home and has put together a watchlist:

  • Fossil (Nasdaq: FOSL  ) – "When someone told me to buy what I know, I literally looked around me. One of the first things I saw was my Fossil wallet, which is 10 years old and still looks brand new. Their stuff is amazing."
    • Analyst's Take: Fossil is a well-liked company (409 CAPS players picked it to outperform while only 49 pegged it to underperform), but it's up about 100% in the past year and now trades toward the high end of its 52-week range. Yet with retail bouncing back with a resurgent economy, Fossil could still have some room to run.
  • Avery Dennison (NYSE: AVY  ) – "Working in Office Ops, we order lots of labels. Avery totally dominates this market. It's true I don't really know anything about this company and how they run their business, but they are the standard."
    • Analyst's Take: The stock jumped around in 2010, but it's had a strong climb in price the past few months and now is only a dollar or so off its 52-week high. The company sports a 1.9% dividend yield and seems well-positioned to maintain or even grow that number.
  • Diageo (NYSE: DEO  ) – "It turns out I'm very familiar with Diageo's products. They own everything I drink!"
    • Analyst's Take: Diageo has an unrivaled global distribution network and a portfolio of lasting brands, and it's one of the favorites over at Motley Fool Income Investor. The team there estimates its value at $82 per share.
  • Under Armour (NYSE: UA  ) – "I printed off their annual report and started to read it almost a year ago when I was just starting. I don't remember what turned me off from them, but there was something in that report that I didn't like about the way they operated. But they do have awesome branding and they seem to be up and coming."
    • Analyst's Take: A two-time recommendation at Motley Fool Rule Breakers, Under Armour should have more upside as its footwear business picks up in the year ahead, particularly as the company recently launched its Micro G line of basketball shoes to go head-to-head against Nike.
  • Borders (NYSE: BGP  ) – "I'm almost embarrassed to tell you that Borders was a strong contender last year. Book stores aren't exactly thriving and I think I'm the only person left who prefers Borders to Barnes & Noble. Still, I was thinking about it until I polled a few friends who used to work there and they all hated it and said they were treated horribly, so I finally abandoned that notion."
    • Analyst's Take: The Fool just published this article: "Can Borders Survive?" That's probably all that need to be said on this one.

Please help Amanda
So, Foolish investors, it's your turn to help Amanda. Should one of these businesses be the next in Amanda's portfolio? Or should she head in a different direction -- no defense contractors or nanotechnology companies, please. Leave a comment below and tell her what you'd recommend.

And to help you out, the Fool has created a service for you to track the news and numbers about the companies you're watching. Just go to www.MyWatchlist.com or click on one of the links below to start building your own.

Roger owns shares of Under Armour but none of the other companies mentioned above. Amanda owns shares of TheKnot but none of the other companies mentioned above ... yet. Under Armour is a Motley Fool Rule Breakers recommendation. Fossil and Under Armour are Motley Fool Hidden Gems picks. Diageo is a Motley Fool Income Investor recommendation. Nike is a Motley Fool Stock Advisor pick. The Fool owns shares of Diageo and Under Armour. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


Read/Post Comments (10) | Recommend This Article (17)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On January 27, 2011, at 1:14 PM, kinosternon wrote:

    Check out Corning (GLW). They had a strong quarter in all their divisions and the Specialty Materials division (Gorilla glass is in that one), one of the smaller divisions is expected to grow particularly fast. The last I heard Gorilla glass is used by 29 different brands. As smartphone sales grow so will Corning's bottom line. Anyway, check it out. Full disclosure: I'm long GLW.

    Good luck,

    kinosternon

  • Report this Comment On January 27, 2011, at 5:31 PM, TMFAmandaBee wrote:

    Thanks for the rec, kinosternon! I'll look into it. Although, I'm not sure how well I'll be able to gauge the potential of their product. Worth a shot, though!

  • Report this Comment On January 27, 2011, at 5:58 PM, TMFTheDoctor wrote:

    Hey Amanda,

    Of these options I probably like AVY best but I haven't really looked at any of them so take that with a grain of salt. As for other suggestions, check out GG's excellent analysis of WMT. The international growth opportunity there is hard to ignore. I'm also fairly bullish on SBUX long-term, but it's had a good run lately and may not have much near-term upside, especially with rising commodity costs. Hope this helps.

    Jacob

  • Report this Comment On January 27, 2011, at 6:22 PM, damiec wrote:

    As Amanda's aunt and former Diageo employee, I say in good times or bad, people always drink! Diageo has a strong portfolio of brands and a global presence. It's a mature industry, so you won't see huge growth, but you will get a nice return over time.

  • Report this Comment On January 27, 2011, at 7:16 PM, TMFAmandaBee wrote:

    Jacob,

    I like the WMT rec. I hadn't considered them at all, really, but I do shop there a few times a month. I'll read the analysis, thanks!

    Damiec,

    Thanks for your comment! I like the idea of picking stocks for the long-term, so a nice return over time works for me!

    -Amanda

  • Report this Comment On January 27, 2011, at 7:56 PM, traderpat9 wrote:

    hey amanda- here's 5 for you to choose from

    HOG

    IMAX

    MPEL

    DWA

    HAS

    have fun & enjoy remember buy & hold for 3/5 years min. i am starting my daughter out in february with buying stocks.

    thanks in advance

    pat aka traderpat9

  • Report this Comment On January 27, 2011, at 8:10 PM, TMFNato wrote:

    Costco (Nasdaq: COST). It's not the fastest grower, but it pays a dividend, it's consistently successful, and it's run by some of the most competent, ethical folks in the business. Wait until some temporary spot of bad news drives the price down, then buy and enjoy rock-solid performance.

  • Report this Comment On January 27, 2011, at 8:42 PM, TMFBreakerRob wrote:

    I would suggest Apple (AAPL). Yeah, there are a lot of people that like it....and often that is a sign of *too* much popularity...but this time the crowd has it right.

    Phenomenal growth in revenues, earnings and cash. "Cult like" status in the marketplace allows premium pricing while it still has a very small global market share in its computers, phone and pad.

    Topping it off....a very low stock price for those revenues, earnings and cash. Pretty hard to beat.

  • Report this Comment On January 27, 2011, at 9:43 PM, daveraj wrote:

    If you're looking for a bit conservative but steady with a great dividend, I'd pick RY. Banks don't turn everyone on, but we should all own stock in one. To invest in banks is to invest in Capitalism. And RY is the best one out there.

    If you're looking for something a little aggressive, take a look at ATVI. One of the SA community favorites and Top Dog in its industry. To invest in ATVI is to invest in coolness and addiction.

  • Report this Comment On January 28, 2011, at 9:27 AM, TMFAmandaBee wrote:

    Traderpat9,

    I love all of these suggestions! These are companies that I'm familiar with and feel comfortable evaluating. Your daughter is lucky to have you helping her out with this. :) Good luck!

    TMFNato,

    Nate! Thanks for the rec! I do love me some Costco, so I'll look into it. Although, are there any Fools that don't love Costco?

    TMFBreakerRob,

    Apple is impressive, and I agree that they still seem to have a lot of great days coming their way. Unfortunately, while it's a great value, it's still a bit out of my price range for now. But I'll definitely add them to My Watchlist (which everybody else should probably do, too!)

    Daveraj,

    ATVI is a great suggestion, too. My husband basically lives on his XBox, so we're pretty familiar with the brand in our household. I see a romantic evening of researching business models and purusing annual reports in our future...

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