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!
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.