4 Stocks That I Will Buy on Friday

As I fund my SEP-IRA a little early this year, I'm ready to put my money where my mind is. I want to make the most of freefalling share prices by buying into the stocks that I've been eyeing earnestly during the market's swoon.

I aim to buy four new stocks on Friday. Why am I not buying them right now? Well, we do have trading restrictions in place. I couldn't have bought into these companies this morning -- ahead of you.

Waiting a few days will also give me time to dig a little deeper into my due diligence. As long as the fundamentals haven't crumbled, or the share prices haven't shot through the roof, I'll be ready to buy into these four investments on Friday.

Travelzoo (Nasdaq: TZOO  )
As a longtime fan of the travel-deals publisher, I've learned to respect its ridiculous volatility.

The stock began 2004 in the single digits, only to top $110 by December. It gave most of those gains back in 2005. In this past year, the shares have lurched from the pre-teens last summer to as high as $103.80 just four months ago. Most of those gains have now vanished as well.

Travelzoo has a history of bouncing back with a vengeance, and it's in much better shape now than it was going into its two previous short-lived rallies. Its overseas operations are now profitable, and Travelzoo's Groupon-like initiatives have added a potent layer of incremental revenue.

Analysts lowered their projections after Travelzoo's rare quarterly miss this summer, but it's hard to pass up on this recession-ready contender, now trading for just 17 times next year's forecasted earnings.

Liberty Capital (Nasdaq: LCAPA  )
Now that John Malone made the sane decision on Barnes & Noble (NYSE: BKS  ) , it's time to give him his halo back.

Liberty Capital's largest portfolio holding is a 40% preferred share stake in Sirius XM Radio (Nasdaq: SIRI  ) , valued at roughly $4.6 billion alone. Because of this stake, we've previously recommended Liberty Capital as a smarter satellite radio play than Sirius XM itself.

Liberty Capital's market cap is a little more than $5 billion, but it includes small stakes in several publicly traded companies, as well as the Atlanta Braves franchise. Add it up, and Liberty Capital trades at a tempting discount to its underlying assets. If you believe in the future of Sirius XM -- and I do -- Liberty Capital is one way to play it.

Wisdom Tree Asia Local Debt (NYSE: ALD  )
I won't only make pure company plays this week. I'm not keen on the greenback, and if the U.S. dollar continues to fall relative to glitzier Asian currencies, I may as well profit from the slide.

This ETF invests in short-term Asian debt -- ex-Japan -- in the local currency. This isn't simply a play on the rising yuan in China. In fact, the fund has larger stakes in South Korea and Australia (at 11.2% stakes each) than in the world's most populous nation.

The payouts aren't much, with an indicated yield of roughly 2% after the fund's reasonable 0.55% expense ratio. However, the rising Asian currencies should pay off nicely. As long as the share price isn't trading at too rich a premium to net asset value -- which closed yesterday at $52.99 -- I'm going in.

Hewlett-Packard (NYSE: HPQ  )
How's this for a contrarian play? I've been bashing HP since last summer -- even making it the trash-worthy subject of my "Throw This Stock Away" column two months ago -- and now I'm likely days away from bellying up to the shareholder bar.

I don't necessarily see a renaissance here. I'm still down on the prospects of many of the blue-chip tech stocks, and HP's all but waving the white flag of surrender on webOS and its PC business, which won't win it new fans. Yes, HP is right to think outside the box, but competition lurks in the suddenly crowded business services market.

However, it's hard to resist HP now that it's trading at a mere five times this year's projected profitability. It's almost a can't-lose situation. If CEO Leo Apotheker can dig his company out of this mess, shareholders will benefit. If he fails, he'll either be replaced, or the company will be acquired, and investors will still likely come out ahead.

Either way, I can't wait until Friday.

Agree with Rick? Disagree with Rick? Want to talk him into new purchases for Friday? Let him know in the comment box below.

Motley Fool newsletter services have recommended buying shares of Travelzoo. Try any of our Foolish newsletter services free for 30 days. 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.

Longtime Fool contributor Rick Munarriz believes that there are far more than four stocks out there worth buying. He does not own shares in any of the stocks in this story -- yet. He is part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.


Read/Post Comments (25) | Recommend This Article (77)

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 August 23, 2011, at 3:54 PM, chadscards1274 wrote:

    Just a thought, if you want a company trading at about 5 times this year's expected earnings look at AFL - currently trading at about 5 times this years earnings, pays a dividend north of 3% and has shown the ability to navigate this economic cycle fairly well. Add to it it's ability and history of increasing the dividend and I think there is a lot more to like about AFL then HP.

  • Report this Comment On August 23, 2011, at 5:06 PM, Popnfresh100 wrote:

    No fair!

    You are not allowed to make money off of Barnes and Noble's recovery after trashing them so many times.

    At least say you were wrong.

    Well played though.

  • Report this Comment On August 23, 2011, at 5:18 PM, jimmy4040 wrote:

    Better make it a buy on close order, because there is an excellent chance that what Bernanke says on Friday won't be enough and that the market will tank.

  • Report this Comment On August 23, 2011, at 5:40 PM, azmfool wrote:

    I'll take a complete pass on HP. Management is supposed to be a huge factor at the Fool. The current and previous two CEO's have given a lot of cause for shareholder- friendly pause. Mark Hurd's pay out was an affront to shareholders. Add in the Compaq and Palm debacles, plus the current taper/yes, tablet/no circuses.

    I wish you well, but I'm not interested yet

  • Report this Comment On August 23, 2011, at 5:42 PM, azmfool wrote:

    Sorry, autocorrection kills me again. The former should say "tablet", not "taper".

    Mike

  • Report this Comment On August 23, 2011, at 6:00 PM, mitchjl wrote:

    Down 25% and i am on a hold position.Waiting to see if p/s has steady increase.

  • Report this Comment On August 23, 2011, at 6:07 PM, Howard1ii wrote:

    HP is always a day late and a dollar short. Their long term strategy the last couple of years seems to be "me too." They ought to stick to their printers.

  • Report this Comment On August 23, 2011, at 6:11 PM, 102971 wrote:

    I'll put Chesapeake Energy (CHK) against all of your four. Yes I'm long on it.

    How on earth can you include HP?

  • Report this Comment On August 23, 2011, at 6:30 PM, bofaa wrote:

    Why on Friday....Why not now????

  • Report this Comment On August 23, 2011, at 7:44 PM, H8CAGERS wrote:

    Puck it all.

    I've lost 40% of my IRA, thanks to our great financial institutions. I.E. Stock Market and Banks, and crooked Real Estate deals.

    I think selling off everything and buying gold and silver coins!!!

    At least it's mine and nobody has control but me

  • Report this Comment On August 23, 2011, at 8:14 PM, brucethrift wrote:

    like all of the picks. But siri is questionable. heard they may be selling out soon. Maybe that is why you are buying it. Is that why? Yall are much better at this than I am. Thanks for all the lessons and tips.

  • Report this Comment On August 23, 2011, at 8:15 PM, TSIF wrote:

    bofaa, Fool has a three day wait period for it's analysts after they recommend a stock.

    Hmmm, Rick, an interesting mix and clearly thinking outside the box and preparing for more bad times if they come. I've been thinking outside the box lately also, but in shorter terms than your IRA so I see where you're coming from. Interesting enough, and maybe a good think, none of the four spiked in today's 3-4% rise. Good for waiting for Friday, but it also shows they don't have any pent-up beaten down demand, so definitely will be longer term on rewarding you. I wouldn't have expected much pent up demand on ALD or HPQ, but TZOO dropping today bears some investigation as to your possible entry timing.

    I also agree that Friday will be a tough day. Low volume initially waiting on Bernake and then either a buy or sell on the "news". Hard to say which way, so it's good you're looking long term.

    HPQ. Research the debt as you "wait. Huge debt repayments due starting in January and the next five years. Cash flow may not cover it. If they spin off the PC business that might generate some cash flow or allow them to shift debt to the spin-off.

    Thanks for sharing, Good LUCK!!

    TSIF

  • Report this Comment On August 23, 2011, at 10:11 PM, Sunny7039 wrote:

    This frankly sounds like a lot of trendy nonsense, which is not to say that a person cannot make very good money on it.

    But the obvious question is -- What is your time frame and your target price? There is nothing on this list I'd expect to be holding for very long, perhaps not even long enough to qualify for LTCGs, assuming I ended up with CGs.

  • Report this Comment On August 23, 2011, at 11:29 PM, tnk4800 wrote:

    Hmmmm,

    " A fool and his money are about to part"

    tnk4800

  • Report this Comment On August 24, 2011, at 12:01 AM, dunha001 wrote:

    I'm in. HP is a buy right now. Down 40+ percent for the year. They are taking a big hit for the wrong reasons. HP is one of the largest tech companies in the world and they will either recover or get bought and either way, it should be beneficial for stakeholders.

    HP already an huge amount of work in business services. HP is not simply PCs and printers. In fact, that is actually relatively small portion considering their reach. The real money for HP and others like IBM is not in personal computers and printers but in enterprise software and services.

    Recall that IBM spun off their PCs and and printers. IBM is doing quite well. HP is just following suit. Something they probably should have done earlier.

    I trust that this tech giant will either recover or get bought. Either way, should be a win.

  • Report this Comment On August 24, 2011, at 4:23 AM, azmfool wrote:

    @dunha001 - I agree about IBM, but HP is no IBM. The elephant in the room is that IBM, which almost singlehandedly invented the PC market bailed out a very long time ago. The increasingly bipolar HP is late to this party. I think they are undisciplined. I also think the shareholder is taken for granted. Obviously you and Rick do not agree, but that's OK. It will definitely be interesting to see how this plays out.

    @howard1ii - You've hit it right on the head. Of all places, I learned this in a poly-sci discussion 25 yrs ago in college. "Me, too" is a losing proposition.

  • Report this Comment On August 24, 2011, at 6:26 AM, hot1053 wrote:

    I'm happy to see that the fool is staying smart in the commentary.

    I can't say these picks are any good.

    There's no way I would ever consider Liberty. Their management was so dumb to offer to buy Barnes and Noble after it said it wasn't giving guidance!

    TZOO appears to be Priceline on steriods. People only have to look at the PCLN chart to know these travel companies can end miserably.

    HWP is dead in the water. Why buy an oversized company with management that haven't firgured it all out yet. Look to smaller, leaner and meaner companies with a lot of international sales if you want a company in this sector, not a large dinosaur.

    Just because the heard recs this post, doesn't mean it's right. This time around they are wrong.

  • Report this Comment On August 24, 2011, at 7:22 AM, pauwelsfc wrote:

    name new stock in japan about window solar ?

  • Report this Comment On August 24, 2011, at 9:46 AM, NumbersDontLie wrote:

    Regarding TZOO:

    Do you think the recent allegations hold water? (http://pr-usa.net/index.php?option=com_content&task=view...

    It seems the primary reason for the spikes we've previously seen (and are now buying the stock in hopes of seeing again) may have been a result of this kind of thing going on... and, if true, may never be seen again.

  • Report this Comment On August 24, 2011, at 11:59 AM, summertimeVA wrote:

    Assumption- Growth does not stock and we do not have a double dip.

    It would have been nice if you had clarified what returns you are talking about- 1 yr horizon. Starting DAY BEFORE YESTERDAY ending today would have been a great time to buy with easy 5-10% gains but since you choose Friday and the above mentioned stocks I only see risk and assumptions like HP will meet its targets, TZOO will have a surge because it has had surges before, if the greenback rises there goes your investment in the ETF.

    Sorry but no offence there is no meat in your argument to buy any of these stocks. If you had mentioned that they are all dividend stocks (MSFT, J&J, Best buy) at their 52 week lows or not affected by the US and European debt crisis and are taking a bashing (example Baidu) or great companies that have constantly been performing like GMCR, AMZN, YUM that could have been an argument.

    The ETF is a hedge play so you dont make money with it as it cancels something else out. Liberty Media I have no idea about, HP is a pioneer move- either you become rich (I wish that you do) or it just bloats and stinks for a couple of years.

  • Report this Comment On August 24, 2011, at 12:59 PM, 51RonB wrote:

    I first connected with HP as a reseller in the early 80s. While they often had good products, I just never really thought much of them. And I really thought they were tanking under Carly Fiorina's watch. Not to even get into HP's buy of Compaq, Compaq a great company with great products.

    But, today I'm starting to reevaluate my view of HP. It is a long-time leader in many fields, and maybe this restructuring is just the thing to finally throw off HP's involvement in things it never really mastered. I do hope the best for HP, and maybe they are a buy now.

  • Report this Comment On August 25, 2011, at 3:57 PM, beadnell wrote:

    I'm starting to like HP, because I'm starting to like Autonomy.

  • Report this Comment On August 25, 2011, at 8:49 PM, StockPickinBob wrote:

    Rick: Why are you recommending buying those stocks when you could be recommending high yield dividend stocks which are at a record low now such as ALSK, FTR, OTT, IVR, CII, BGY, JNK, NFJ?

    Get with the program.

    You may have this tip pro bono, but I will expect 50% of your first month dividend returns for the tip.

  • Report this Comment On August 26, 2011, at 4:25 AM, rodessa wrote:

    I do think that the pullback is not finished for TZOO and above all for LULU, as PER of more than 54, mean 3 times the PER of NIKE.Big institutionals ar short on LULU (16%).I follow that trend, as 60% of fat to lose after a climbing of more than 400% during the last 20 months !!!

    The actual rebounce of TZOO could be finished and the pullback could take his rights again soon... as the insiders of the both companies have sold all their stocks options since months.They know their company better than us ...

  • Report this Comment On August 26, 2011, at 8:35 PM, alvinpall wrote:

    I think you should give the name of one of these great stocks in your ads rather than a whole bunch of words before telling us to subscribe to one of your newsletters for 30 days etc., before finding the name out. Let us actually see this stock in progress as it moves up or down and then we might be more inclined to subscribe. It's easy to speak of your past winners. I want to watch one of your winners wether I buy it or not before I subscribe even though I know I can end it in 30 days. Thanks. Jazzist

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