You might not know it from the discontent you hear coming from certain folks, but the stock market has actually had a pretty good year so far, returning 11.7%. There's absolutely nothing wrong with returns like that.
And yet, if you had followed used my hypothetical "World's Greatest Growth Portfolio" as a guide, you would be up 25.2%. It's only been eight months, so I'm not declaring victory any time soon, but the results speak for themselves.
Below, I'll tell you what to keep your eye on in September, identify three stocks that I think are buys right now, and offer access to a special premium report on some of the stocks in my portfolio.
|
Core |
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|---|---|---|---|---|
| Company | Allocation | Jan. 1 balance | Current balance | Change |
|
Intuitive Surgical |
11.5% | $115.00 | $120.64 | 4.9% |
|
Google |
11.5% | $115.00 | $118.34 | 2.9% |
| Amazon.com | 11.5% | $115.00 | $159.39 | 38.6% |
| Whole Foods | 11.5% | $115.00 | $160.54 | 39.6% |
|
Tier One |
||||
| lululemon athletica | 7.5% | $75.25 | $104.30 | 38.6% |
|
Apple |
7.5% | $75.25 | $121.68 | 61.7% |
|
Westport Innovations |
7.5% | $75.25 | $80.44 | 6.9% |
| IPG Photonics | 7.5% | $75.25 | $130.94 | 74.0% |
|
Tier Two |
||||
|
Baidu |
5% | $50.00 | $44.85 | (10.3%) |
| Zipcar | 5% | $50.00 | $28.15 | (43.7%) |
| Stratasys | 5% | $50.00 | $103.95 | 107.9% |
| MAKO Surgical | 5% | $50.00 | $29.15 | (41.7%) |
| Solazyme | 5% | $50.00 | $49.85 | (0.3%) |
| Total | 100% | $1,000.00 | $1,252.20 | 25.2% |
Source: Fool.com. Starting balance of $1,000 is used to easily illustrate returns.
Apple and IPG Photonics have helped the portfolio improve the most since last month. IPG benefited from investors becoming more confident in the company's disruptive set of fiber-optic lasers after positive earnings came in. And though Apple may have missed expectations, the iPhone 5 is just around the corner, and the company's victory against Samsung was good news, too.
Westport Innovations' earnings also offered up reassuring news in August, beating analyst estimates for both earnings and revenue. A recent release of federal guidelines for automobile efficiency also provided a boost for the company, which designs engines that can run solely on natural gas, or a combination of both natural gas and petroleum-based fuel.
Looking ahead, I'll be keeping a close eye on the one company that should be reporting earnings during September as well.
| Company | Earnings Date | Expected EPS | Expected Revenue |
|---|---|---|---|
| Lululemon | September 7 | $0.31 | $282 million |
Sources: Thompson Reuters, E*Trade.
3 best buys
First on my list of best buys for the month is a company I just vowed to put my real money behind: Baidu -- for the second time this year. You can read a more in-depth analysis of why I've bought twice by clicking the links above. Here's the shortened version: China's leading search engine is dirt cheap compared with its growth prospects, and has a solid catalyst -- the adoption of the Internet in China -- moving it forward. Some people are worried that slowed growth in China is worrisome, while others are concerned about competition from Qihoo 360. I say: Baidu is a solid buy.
Second on my list is Intuitive Surgical. The company makes the daVinci Robotic Surgical system that is primarily used to perform minimally invasive prostatectomies and mastectomies. As more doctors experiment and tinker with the robot, I have a feeling it will be used in ever-more procedures. The stock is trading for 28 times free cash flow, which isn't cheap; but when taking the long-term view, I still think the company deserves your attention.
Finally, we have Google. You would think that it would mean something when Charlie Munger and Warren Buffett say the company "has a huge moat," and that Buffett "[doesn't] know how to take [the moat] away from them...Their moat is filled with sharks!" Apparently, investors think that means the company should trade for a valuation similar to other Buffett holdings that tend to be value plays.
But it's impossible to predict where Google will be five years from now. The company grew revenue by 35% last quarter when compared with 2011. But it trades for only 20 times earnings and just 17 times free cash flow.
For me, the real key is my faith that Larry Page and Sergey Brin -- who were both founders and largely the engines of the company -- are steering Google to make a lasting, meaningful difference in the future. If you aren't invested in Google, that reason alone is at least enough to consider owning a part of the company.
Far more than I can offer in one article
Here at the Fool, we're coming up with ways to get you the full scoop on some of your favorite companies. There's only so much I can include in one article, especially when it covers a portfolio of 13 different companies. That's why we've got a number of new premium reports that come with ongoing coverage of the certain stocks throughout the year.
Of the companies in my portfolio, we have special premium reports available for Apple, Amazon, Baidu, MAKO Surgical, and Whole Foods. Click on any of the companies to get access to the reports. But if you only have time for just one, my obvious suggestion would be to check out Baidu's. Get your copy of it today!
