I follow quite a lot of companies, so the usefulness of a watchlist to me cannot be overstated. Without my watchlist, I'd be unable to keep up on my favorite sectors and what's really moving the market. Even worse, without my watchlist, I'd be lost when it came time to choose what stock I'm buying or shorting next.
What I intend to do as an experiment is make every Wednesday "Watchlist Wednesday," when I'll discuss three companies that have crossed my radar in the past week and at what point I may consider taking action on these calls with my own money. Keep in mind, these aren't concrete buy or sell recommendations, nor do I guarantee I'll take action on the companies being discussed weekly. What I can promise is that you can follow my real-life transactions through my profile, and that I, like everyone else here at The Motley Fool, will continue to hold the integrity of our disclosure policy in the highest regard.
Apple (Nasdaq: AAPL )
If you aren't familiar with Apple, you clearly live on another planet. The tech giant this week announced its long-awaited news on what it would be doing with its nearly $98 billion in cash, and investors seem to be pretty happy overall with the news.
Apple will begin paying out a quarterly dividend of $2.65, in addition to using $10 billion in cash to repurchase shares beginning in 2013. What's truly scary is that even with its quarterly payout to shareholders that amounts to almost $2.5 billion, it will still grow its cash pile by approximately $10 billion every quarter -- and that assumes Apple's growth rates stay stagnant, which is far from what the figures are suggesting. With 3 million new iPads sold on the product's debut weekend, I'd have to say that Apple's shares continue to look like a bargain, even at $600.
Targacept (Nasdaq: TRGT )
This company is a stark reminder of the dangers of investing in biotech stocks and throwing most of your eggs in one basket.
The company's lead product, TC-5214, an experimental depression treatment, proved ineffective in a November study, and yesterday's additional data from the company confirmed the study's earlier suspicions that the drug was ineffective. Targacept did receive $200 million upfront from AstraZeneca (NYSE: AZN ) to help develop TC-5214, but it leaves another $1 billion on the table for failing to meet study and, subsequently, sales goals. AstraZeneca had also tinkered with the idea of purchasing Targacept, which now seems clearly off the table.
Targacept is left with a much weaker pipeline filled with early to midstage clinical trials for conditions ranging from Alzheimer's to asthma and diabetes. The company does have $225 million in cash that should last it through 2014, but with little hope of a drug approval on the horizon, will investors even care?
VimpelCom reported its full-year results one week ago, and growth continues to come at a slow but steady pace for Russia's third-largest mobile service provider. Total mobile subscribers increased 13% to 205 million, while revenue grew organically by 7%. A mixture of one-time acquisition costs and a 72% jump in capital expenditures have many investors worried -- but not me. The company has made a commitment to delivering at least $0.80 in dividends to shareholders through 2014, which equates to a dividend yield approaching 8%. Certainly sounds good to me!
Its rival MTS also reported last week, but things weren't nearly as cheery. Russia's largest mobile phone operator guided to 5%-7% revenue growth in 2012, which is down from the 9.1% growth it experienced in 2011. Still, a dividend north of 5% and a forward P/E of nine make this a compelling value in my eyes, along with VimpelCom.
Is my bullishness or bearishness misplaced? Share your thoughts in the comments section below, and consider following my cue by using the links below to add these three companies to your free, personalized watchlist to keep up on the latest news with each company.
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