What companies are tomorrow's big winners? In our ongoing series, I'm chatting with Fool analysts and advisors to find out the stocks they're watching and the catalysts that would signal it's time to buy. Today, Fool analyst Alex Pape shares two companies on his watchlist and one he just bought for himself. (For your convenience, you can now create your own version at MyWatchlist.com, your free customized hub to follow the performance and Fool coverage of the companies you care about.)
Two companies whose time is near
Maintenance dredging isn't optional. As silt and dirt find their way into waterways and ports, ships will eventually run aground if dredging companies don't routinely clear the way and maintain the necessary depth. The U.S. government has neglected this maintenance for nearly a decade, says Alex, and that backlog is about to become problematic. The country started to pay attention last year and activity picked up, a trend that is likely to continue.
If that were the only opportunity awaiting Great Lakes Dredge and Dock
Alex's only hesitation is on the international front, where the vast majority of its work is for the Bahrain government (which accounted for 22% of dredging revenue in 2009). The market has priced in that business, which Alex views as less than stable. In his dream scenario, oil prices fall significantly, Bahrain drops its contracts, the market overreacts to the news, and he can buy the very strong and reliable remaining business at a discount.
Similarly, he would like to see Chiquita Brands
One to promote from the watchlist
Carrying plenty of debt, unable to get anticipated refinancing because of tight markets, and facing decreased occupancy rates, this is not the optimal time to be a hotel owner ... unless you can pick them up at firesale prices. That's the approach of industry veteran Jon Bortz, who came out of retirement to create Pebblebrook Hotel Trust
"There may be no better value shopper than hotel pro Jon Bortz, who's running around the country scoring mouthwatering deals for his shareholders," Alex wrote. "The market, however, is running scared at the mere mention of the word 'hotel.' Today, we have the opportunity to jump on the Pebblebrook deal train for a dirt cheap price."
And that's exactly why it pays to watch. You can make smarter investing decisions with your own version of My Watchlist, new and free from the Fool. Click below to start following one of the stocks mentioned above: