When stocks are down, amateur investors tend to take their money out of the market. Although understandable, this ends up hurting investors in the long run, as they pull their money out when shares are down.
For investors seeking great ideas, our Rising Stars have been on a tear lately, buying shares in eight different companies over the last two weeks. I'm going to give the details on five of those buys, but check out Rising Star Anand Chokkavelu's Web page to get the details on the other three.
Add these companies to your watchlist, and you'll remain up to date on the latest news; read to the end, and I'll offer you access to a special report identifying the one stock set to profit from the trillion-dollar mobile revolution.
Huntington Bancshares (Nasdaq: HBAN )
Rising Star Anand Chokkavelu isn't afraid to delve into an industry others are trying to stay far away from: banking. Earlier this month, he tapped shares of Huntington -- a regional Midwestern bank based in Ohio.
Anand is a big fan of diversifying across a wide swath of smaller regional banks, which tend to have far more transparent balance sheets than their larger counterparts: "They tend to stick to basic banking rather than loading up on exotic derivatives. There are a lot of these banks, and their business models are pretty similar, so I like to buy small banks that exhibit excellent metrics and pass some basic (but carefully chosen) sniff tests." Huntington, which Anand believes is righting its ship, passed those tests.
Freeport-McMoRan Copper & Gold (NYSE: FCX )
Rising Star Jim Mueller is all about buying companies with messed-up expectations: prices so low that they assume absurd failure in the future. He's already tapped shares of Freeport once in the past, but that didn't stop him from going back for more.
While slowed demand for copper worldwide would certainly hurt the company, he believes that the company's low production costs and strong balance sheet simply aren't appreciated enough based on the price of the company's shares.
Weyerhaeuser (NYSE: WY )
Rising Star Jeremy Myers teases us by explaining he's found a commodity that "is known to be a great inflation hedge and it's countercyclical ... [and] it tends to have a low correlation with other asset classes, which makes it a great portfolio diversifier." What is this magical commodity? Timberland.
Jeremy explains what many of us may intuitively miss here, though it's amazingly simple: "If it is properly managed, it increases in value yearly as the trees grow, and you only have to harvest the wood if the price is right, unlike other commodity crops that spoil."
Jeremy believes in Weyerhaeuser above competitors like Plum Creek Timber (NYSE: PCL ) because of Weyerhaeuser's substantial assets in the Pacific Northwest, which give the company both highly productive land to work from and close proximity to ports that can transport the lumber quickly to growing Asian economies.
Apple (Nasdaq: AAPL )
I'm sure Rising Star Joe Tenebruso believes in diversity, but he just can't help but load up on Apple, which is the only stock currently in his portfolio. Sure, Apple had an earnings "miss" recently, and there have been rumors of a slowdown in demand from Asian suppliers, but Joe isn't worried.
Instead, he sees a ridiculously low-priced stock that could succeed if one of many different scenarios plays out -- like continuing dominance abroad, the delivery of a revolutionary new product in the Apple TV, or the brilliance of new CEO Tim Cook.
- Add Apple to My Watchlist.
Solazyme (Nasdaq: SZYM )
Finally, we head to Rising Star leader Alyce Lomax, whose picks are currently crushing the market by more than 11 percentage points! She's buying a second round of a very interesting company: Solazyme. This recent IPO has developed a technology that can turn things like grass, corn, sugar cane, and even waste streams into oils used for fuel, food, and health products -- all through the wonder of their patented microalgae.
After United Continental's (NYSE: UAL ) successful flight last month using a Solazyme fuel blend, she's even more excited about the practical applications these oils could have in our future.
One company poised to dominate mobile
Finally, as promised, I'm ready to offer you access to a special free report that The Motley Fool just put the finishing touches on: "The Next Trillion Dollar Revolution." Unless you've been in a cave for the last five years, it's no surprise that the mobile revolution is well under way. Our analysts have identified one company poised to profit above all others. Get your copy of the report today to find out which company it is, absolutely free!