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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.
Today is "Watchlist Wednesday," so I'm discussing 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.
Autodesk (Nasdaq: ADSK )
I may not talk about it often enough, but Autodesk is one of the most consistent growth stories in software. The company, like a growing number of software names, is capitalizing on businesses moving into the cloud. Its AutoCAD software, which allows users from the manufacturing sector to draft and design projects, is a driving force behind the company's growth. According to Autodesk's CEO, Carl Bass, more than 300,000 documents per week are being uploaded to its mobile device program, AutoCAD WS, thanks in part to a surge in sales from Apple's (Nasdaq: AAPL ) iPad.
This is one major key to Autodesk's success: attacking the mobile software space in addition to standard PCs and laptops. Not many software providers can say they've been profitable in each of the past 10 years, but Autodesk can. With a debt-free balance sheet, $1.4 billion in cash and a five-year projected growth rate of nearly 17%, there doesn't seem to be any reason not to be bullish on Autodesk.
Corning (NYSE: GLW )
I'm not exactly sure when this happened, but Corning just became a value play. Corning is the company behind the extremely shatter-resistant Gorilla Glass, as well as myriad other products in the fiber optic and life sciences sectors. If you recall, mobile, fiber optics and life sciences are three of my favorite sectors at the moment, granting Corning my trifecta of approval.
As smartphones begin to flood the market, their average selling price should drop, which will facilitate even more sales. More smartphone sales very simply mean more sales for Corning, since its fiber optic products and its protective glass are becoming essential tools to keeping Apple's iPhone 4S the most dominant phone on the market. Corning is loaded with $3.4 billion in net cash, is trading right at book value, and is priced at just nine times forward earnings. I'm not sure this is going to get any cheaper, so it looks like a genuine bargain here.
Conn's (Nasdaq: CONN )
The recent rally in Conn's makes about as much sense as a $3 bill to me. The company sells consumer appliances, electronics, lawn products, garden products, and mattresses. Let's just quickly take a glance at how some of these sectors have performed.
In home electronics, Best Buy (NYSE: BBY ) reported the need to close down 50 of its large stores in favor of opening 100 smaller, mobile-based stores. This is in response to terrible margins on televisions and the growing presence of online buyers. In lawn and garden, Trex, a provider of outdoor decking and railing products, reported a 32% drop in sales year over year based on its fourth-quarter results released in late February. As for mattresses, Sealy imploded in January after it lowered its full-year forecast.
This either means Conn's is just really that good, or emotions have gotten the better of investors here. As for me, I'm going to err on the side of the latter.
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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