1 Stock to Buy in April

As we do each month, we asked 10 of our top analysts across various sectors for one stock that looks especially compelling right now. Here are the companies they singled out.

Dan Caplinger: My stock for the month is Chinese online-search giant Baidu (NASDAQ: BIDU  ) . I've been a big fan of emerging markets for a long time, and China in particular intrigues me because of the language and cultural differences that provide such a big barrier to entry in many industries. Although fast-food giants and other consumer-facing U.S. companies have done a good job of building a big presence in the nation, Baidu has managed to fend off Google and retain a commanding share of the online search market. The stock's recent plunge in reaction to up-and-comer Qihoo 360 seems far too overblown, especially given the potential for huge growth in the search market in China and in neighboring countries that will leave room for multiple competitors in the space.

Moreover, investors are forgetting that Baidu has expansion plans beyond China, and its prospects for picking up market share in other lucrative emerging Internet markets look bright. Best of all, even if its lightning-fast growth pace slows, being able to pick up shares at a trailing multiple below 20 is a bargain that's too tempting to resist.

John Maxfield: Apple  (NASDAQ: AAPL  )

If I were the world's most interesting man (which I most certainly am not) here's how I'd sum up my selection of Apple as the one stock to buy in April: I don't usually buy technology stocks, but when I do they're dirt cheap.

Apple is patently, even offensively, inexpensive. It went from over $700 per share last September -- at which point even seasoned investors like David Einhorn were predicting it'd be the "first trillion-dollar company" -- down to roughly $420 earlier this month. It's the classic case of mania followed by utter despair.

On a valuation basis, the company's stock trades for a little more than 10 times its estimated future earnings over the next 12 months. If you exclude its obscene cash hoard, that figure falls to roughly seven times earnings. And even more telling is its 2.3% dividend yield, which is bound to increase, given that Apple is in "serious discussions" about returning more capital to shareholders.

While I've been wrong before, and will be again, I've personally bought Apple at three different price points during its descent, and couldn't be happier with the decision. 

Keith Speights: Biogen Idec (NASDAQ: BIIB  )  is on a roll that I don't see stopping anytime soon. Shares are up more than 40% during the last year. The biotech currently stands as the leader in the multiple sclerosis market with blockbuster drugs such as Avonex and Tysabri. Many expect Biogen's Tecfidera, which was recently approved by the FDA, to exceed the success of both of those drugs and become the top-selling MS drug within the next few years.

The excitement over Tecfidera stems from several important advantages for the drug. Most treatments for MS are taken via injection, which can be inconvenient and sometimes results in inflammation around the injection site. Tecfidera is a pill and therefore avoids these drawbacks. There are other MS pills available -- Novartis' Gilenya and Sanofi's Aubagio, but Tecfidera's better safety profile and solid efficacy should catapult it ahead of both of these rival drugs.

While multiple sclerosis is definitely Biogen's strongest niche, the company isn't entirely dependent on one therapeutic area. Rituxan, which generated $1.1 billion in sales last year, targets treatment of several indications including non-Hodgkin's lymphoma, leukemia, and rheumatoid arthritis. The FDA also recently accepted the company's Biologic License Application (BLA) for a new hemophilia therapy. These products, combined with Biogen's increasingly strong MS portfolio, should help the stock continue its winning ways.

Tim Beyers: No less than Steven Spielberg -- STEVEN SPIELBERG! -- helped sell J.J. Abrams on taking Star Wars Episode VII, the director revealed in a recent interview with Empire magazine. Combine serious resources, serious talent, and serious brand and you might have the next $2 billion flick under development right now, only the third in history. In the meanwhile, Iron Man 3 shows up in May as the Marvel franchise continues to expand. All of it bodes well for Walt Disney, which has also hinted at plans to bring the Star Wars universe to a new theme park.

Matt DiLallo: Despite roots that go all the way back to the days of Standard Oil, the most intriguing aspect of Buckeye Partners is its future. While on the surface the company appears to just be another master limited partnership, the difference here is that the company has mixed in some international flavor to spice up its business mix.

The foundation of that international business is the company's crown jewel: the BORCO marine terminal in the Bahamas. The facility has a very strategic location in the Caribbean and unlike other locations it has the advanced marine infrastructure required for deepwater access. This gives BORCO an unmatched competitive advantage in two key growth areas. First, it can serve as a bunkering area for crude oil transportation through the soon-to-be-expanded Panama Canal and second, it has the potential to be a staging area for crude oil from Latin American production that's expected to come online over the next decade.

Buckeye is in the process of expanding BORCO by 20%, however, it has the room to double capacity as these two catalysts play out. When you combine this with the growth of its domestic operations, you can see a real catalyst for higher future distributions. Even better, Buckeye's units already yield almost 7%, so you'll be paid quite well as you watch these catalysts play out.

Chuck Saletta: Supplemental insurance giant Aflac (NYSE: AFL  ) looks like a stock worth buying in April. Investors are rewarded with a 2.7% yield on a dividend that has risen annually for 30 consecutive years. That makes Aflac a company in the business of managing risks that knows the importance of directly rewarding investors for the risks they're taking in owning the stock.

Aflac is well-known in the U.S. for the injury-prone duck that serves as its mascot, and it's also the largest writer of individual insurance policies in Japan. To showcase just how committed to its dividend Aflac has been, note that the 30-year history of increasing dividends included 2011, the year of the tsunami-induced Fukushima Daiichi nuclear meltdown in Japan. That commitment, along with a mere 22% payout ratio, gives plenty of reason to believe Aflac could continue to increase its dividend.

In spite of that strong base, Aflac's shares are down since it provided guidance in early February that raised concerns that currency conversions from a weaker Japanese yen would hurt earnings. That weakness gives investors an attractive buy-in price below eight times forward earnings estimates. Since the stock's weakness is driven by the ever-fickle currency market, there's no telling how quickly that window of opportunity may close, especially if currency traders sour on the U.S. dollar.

Anders Bylund: TIBCO Software is an unassailable giant in a booming niche market. And you can buy it today at drool-inducing prices.

The company rules the roost for real-time data analysis tools, to the point where larger and richer rivals have switched sales tactics in this sector. IBM and Oracle no longer even attempt to win contracts against TIBCO on technical merits or even with huge discounts, according to CEO Vivek Ranadive. Instead, they argue that integrated packages with everything from one vendor surely beat specialized products in terms of product support and simple setup.

The company should be having the time of its life in that sales environment, but lingering issues with sales execution have put a lid on short-term revenue growth. That's why the stock has traded down 25% over the last year.

I believe it's only a matter of time until Ranadive hammers out the execution issues in his North American sales force, which will unlock the next level of hypergrowth for his company. I thought TIBCO was such a mouthwatering deal in early December that I bought shares for myself. You can still enjoy exactly the same deep value today.

Rich Smith: A weak consumer confidence report siphoned wind from the sails of many retail stocks earlier this week -- including my top pick for April: Abercrombie & Fitch. This, however, is good news.

Abercrombie, if you recall, got shellacked last month despite beating earnings, when the company warned of weakness in the current year. To me, though, that looked like just as big an overreaction as the one that investors gave to news of waning consumer confidence.

Here's why: With earnings growth projected to average 18% or better over the next five years, Abercrombie looks like a great bargain based on the $345 million in free cash flow it says it generated in 2012. True, that number's going down in the weaker year ahead. But the company's still targeting $300 million in FCF, which is none too shabby in its own right.

I put the company's enterprise value-to-free cash flow ratio at just about 10.0 today, which means that if Abercrombie grows only half as fast as Wall Street's expecting, the stock's still fairly priced. If it gets anywhere near its target, the stock's just an amazing bargain. It may take some time for Mr. Market to realize this, true. But Abercrombie pays us a 1.7% dividend while we wait. Try getting your bank to match that.

Jim Mueller: We're barely done with snowstorms and now have summer storms to look forward to. Both mean power outages and that means good things for Generac Holdings, maker of backup power generators for the home and small to mid-size businesses. It's been in business for more than 50 years , but has only been public since 2010. It controls 70% of the market for home power backup, selling generators that stand alone or can be hooked into a natural gas supply, switching on automatically when the power goes out. For small to medium businesses, it provides larger generators that keep the business running and avoiding losses from things like thawed-out food (think grocery stores and restaurants).

The country's aging electricity infrastructure means we're experiencing more power outages affecting lots of people. In 2000, there were 16 outages affecting 50,000 customers or more, according to the Department of Energy. Last year there were 77, while in 2011, there were 139. This increase has spurred more people to buy generators, helping the company achieve 26% average annual revenue growth and 29% average annual net income growth over the past three years.

I expect this trend to continue and this is why I purchased shares for Messed-Up Expectations, the real-money portfolio I run for The Motley Fool.

Jason Moser: This year marks Chipotle Mexican Grill's (NYSE: CMG  ) 20th anniversary and with more than 1,400 restaurants serving almost 1 million customers daily, it's safe to say the concept has caught on. I love the fact that the company owns all its stores; it doesn't franchise any of them. What this means for investors is strategic growth based on management's goals.

These stores are not only self-funding but also veritable cash machines with each ringing up more than $2 million in average annual sales, and when we consider that the average store yields an operating profit of around $570,000 per year (and growing), it's not hard to see why Chipotle makes for an attractive long-term holding. Initiatives like the ShopHouse Southeast Asian Kitchen and the recently announced catering service offer up additional growth drivers beyond expanding the current store footprint (which I believe has room to at least double) meaning that today's price at around 30 times full-year estimates is a fair one to own shares in an excellent company.

The biggest risk on the horizon for Chipotle is food costs. Management does possess some pricing power thanks to the quality of the food and experience, but they don't have a history of abusing it. Best of all, we know that with Chipotle and its streamlined store concept, for founder and co-CEO Steve Ells it always has been and always will be about the food. Ells has developed a platform with which he can deliver an excellent product. But for investors to look at Chipotle as "just a burrito joint" is extremely short-sighted. This story has a long way to go.

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Read/Post Comments (13) | Recommend This Article (145)

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 March 29, 2013, at 6:35 AM, nivekluap wrote:

    My top stock picks to aquire over the next couple months and hold onto for the next 5 to 10 years:


    The first two are in the hated uranium sector and I believe we're headed for the perfect storm for them to outperform. The HEU agreement is coming to an end this year. Cigar lake will start to finally produce uranium this year. China and other countries are still building reactors. Japan is going to turn it's reactors back on slowly.

    The last two, CLNE and WPRT, are in the infancy of a revolution of natural gas. Love it or hate it, it's on it's way.

    These plays will probably take ALOT of time to come true, so don't buy if you don't have quite a bit of patience. I'm long all four stocks.


  • Report this Comment On March 29, 2013, at 8:47 AM, mikecart1 wrote:

    While I agree with some of the people saying "Apple", I disagree with the logic saying it is "inexpensive now because it was $700 last year..." That logic is flawed. It doesn't matter what Apple has done before. It doesn't really even matter what they are doing now. It only matters what they are going to do in the future. Anyways, Apple is the stock to get but not because $4xx < $700 but because the world hasn't seen nothing yet. If you think the iPhone and iPad are game changers, then the next product is going to end the game entirely!!!

  • Report this Comment On March 29, 2013, at 11:39 AM, TMFPennyWise wrote:

    Mikecart1, I'm wondering what is this next Apple product?? Are you talking about the TV? Jay

  • Report this Comment On March 29, 2013, at 12:45 PM, iidris wrote:

    My pick is FNMA

    Fannie Mae

  • Report this Comment On March 29, 2013, at 4:55 PM, Johny205 wrote:

    I'm long LNG (Cheniere Energy). They are up about 100% in the last 6 months; 30% in the last month alone. They liquefy natural gas and from what I understand the only company who can currently export NG. Their exporting wont take off for a couple years until their facilities are built and up and running but there is obviously a lot of money to be made exporting NG.

  • Report this Comment On March 29, 2013, at 5:49 PM, 1wrecklesstrader wrote:

    Greetings Fellow Fools,

    Please give me your take on the recent news related to Warren Buffett's intention to pay $28B for Heinz; I am a Heinz shareholder and it is my best performing equity. What immmediate impact will the Berkshire Hathaway purchase have on shareholders positions; is it too late or too FOOLISH to double up on my holdings?

  • Report this Comment On March 29, 2013, at 9:42 PM, PuddinHead42 wrote:

    BIDU - lower lows, and lower highs, not the probabilities you want.

    AAPL - excellent value, the next Microsoft. Samsung has them staggering a bit.

    BIIB - awesome biotech, as of 3/29/13 it has had two monster up days, so too late now.

    DIS - great franchise, content is king.

    BPL - higher yield than KMP. Interesting. Just setting new highs out of a long base. Interesting.

    TIBX - good technology, bad execution. Been watching it recently, MF really pushing it. Recent low was a double bottom, which adds to the temptation.

    ANF - former growth darling, they often don't come back. They have held their own for a long time, but fashion changes, I would prefer KORS.

    GNRC - Got a huge pop in the charts in Oct due to Sandy. Not able to do much since - what will really make it grow?

    CMG - I think the ShopHouse concept has potential. The are at risk of out growing their "local sourcing", but not too much of a worry. Waiting to taste ShopHouse, but like the stock here.

  • Report this Comment On March 30, 2013, at 9:27 PM, MichaelHamilton wrote:

    BIDU - like it, undervalued growth stock

    AAPL- the larger the company, the slower the growth. Price could turn around, but there are much more likely prospects out there.

    BIIB - Sounds ok.

    DIS - good if you don't mind waiting it out.

    BPL -Like it. Nice divi and good prospects.

    AFL - reasonable play.

    TIBX - unconvinced, best to wait it out longer.

    ANF - Boring!

    GNRC - I doubt everybody is going to go buying generators all of a sudden.

    CMG - growth is already priced in.

    My own suggestion:

    NQ - 100% year on year growth. Niche player in high growth mobile device market. Very Cheap based on PEG and forward PE. Currently trading well below anaylst average forecasts.

  • Report this Comment On April 01, 2013, at 4:39 PM, tomd728 wrote:

    I would not trust the Chinese with an empty wallet !

    So scratch BAIDU. Throw me in on BIIB though and the rest of that great biotech crew of AMGN, REGN,

    CELG,et al.

    A good biotech mutual fund will serve anyone well.

    Let good managers,select,buy,sell,balance and you will not be disappointed.

    I like FBIOX.

  • Report this Comment On April 06, 2013, at 2:26 PM, joshn268 wrote:

    This question is for Chuck Saletta: after reading your pitch, it got me interested in Aflac. During my research, I noticed that their FCF is incredibly high due to little or no capital expenditures on their cash flow report. However, this doesn't make sense to me. Do insurance companies, such as AFL, reclassify their CAPEX in a manner that isn't reported as CAPEX on their cash flow report? Or is their FCF really that good?

    Sorry if this is an amateur question.

  • Report this Comment On April 06, 2013, at 4:41 PM, aldousworp wrote:

    MET and PRU also show no capital expenditures on their cash flow reports. I suspect health insurers have little need for capital expenditures - especially if they don't do their data processing in-house.

  • Report this Comment On April 07, 2013, at 6:31 PM, NYCOOL wrote:

    Here is the problem with stock picks as I have observed since buying and selling on the internet has become available. Day traders and everyday observers of stocks on the internet buy and sell based on information they get on many financial and news sites that are usually unfounded. A push of the enter button can result in a downside or upside of a stock that causes a movement seen on the internet that generally is infectuous and is self perpetuating. Picking stocks has become a very emotional game for investors.

  • Report this Comment On April 07, 2013, at 7:27 PM, wheattjim wrote:

    Empire Resources (ers) is absorbing some market share.

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