3 "Best Idea" Stocks You Can Buy Now

Photo: Thomas Galvez

Talk is cheap. And in the investing world, often ideas are, too. 

When an investor talks about an "idea," it's often a nod to an investment with potential, but one that he or she hasn't finished vetting. Perhaps it'll be a winner, but maybe further research will cause the investor to toss that idea in the junk pile.

But what happens when you ask investors to offer up their "best ideas" -- that is, the ideas they're most confident in and have done the most research on? Well, you're about to find out, because I reached out to three of the top banking and financials analysts writing for Fool.com and asked them to give me their "best ideas" for right now.

David Hanson: How would you like to buy an "expensive" stock in this "expensive" market? My best idea right now is Zillow (NASDAQ: Z  ) , the online real estate platform. Since Zillow went public in 2011, detractors have consistently pointed at its nose-bleed valuation metrics as a reason to avoid the stock like the plague. While these naysayers were wagging their collective fingers, Zillow's business continued to perform phenomenally well. Since its IPO, traffic to its site is up nearly 200%.

More impressive than its unique monthly visitors is the number of premier agent subscribing paying Zillow to advertise their services on Zillow's platform. That number is up 260% since the IPO. Just check out the growth in this number since the start of 2010:

While many real estate agents were skeptical of Zillow's platform early on, these numbers are evidence agents will spend their promotion dollars where the "eye-balls" are – and the eye-balls are definitely flocking to Zillow. Zillow's visitor numbers are now approximately double the size of the company's two closest competitors combined.

Zillow still sports a premium valuation, but the company is crushing its competitors and still has the ability to pivot in new directions in the mortgage and real estate industries when it sees opportunity. The company is valued at roughly $3 billion but still only holds less than 5% of wallet-share when it comes to real estate agent's marketing spend --- this is a situation where the strong appears to be getting stronger. 

Patrick Morris: One stock in the financial sector has seen its price rise by nearly 1,100% over the last five years -- but the best is likely ahead of it.

Discover Financial Services (NYSE: DFS  ) is often thought of as a second-class citizen in the world of both credit cards, and investments, but that is an inappropriate view to have. Since 2009, it has delivered an average annual return on equity of 19%, versus the large bank average of 5%, and has doubled the total loan growth of those peers at 6% compared to 3%.

Even more impressive than its growth over the previous five years was its results in 2013. Discover grew its book value by 15%, and its return on equity stood at an eye-opening 24%. The company continued to expand its diverse businesses in personal, student, and home loans, while also expanding its remarkable profitable credit card business.

Many may shy away from its relatively expensive 2.7 price-to-tangible book value, but when you consider it is able to deliver returns to shareholders in a remarkably efficient and effective way, its premium valuation makes sense. When you add the reality it has loyal customers, a solid dividend, and room for growth ahead, Discover Financial Services is a great buy today.

Jordan Wathen: One of my favorite investments in the financial industry today is Federated Investors (NYSE: FII  ) , a small asset management company with a $2.9 billion market cap. Asset management is generally a phenomenal business, one which requires little investment and creates substantial, residual free cash flow. For Federated Investors, it's been…well, okay.

Federated Investors manages a total of $376 billion in client funds, 73% of which is invested in money market accounts. In a low rate environment, Federated Investors is waiving fees for its customers, meaning it isn't taking a dime of revenue for managing some $276 billion of investable assets.

In 2013, Federated Investors waived fees worth some $389 million on its money market accounts. To put this lost revenue in perspective, the company generated full-year revenue of $878 million.

Should rates rise, and Federated Investors begins to collect on revenue it currently forgoes, reversing fee waivers would add substantially to bottom line income. The company trades at for just 12 times free cash flow, and yields a whopping 3.6%. The dividend should leave you satisfied until higher rates can drive Federated Investors' bottom line.

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