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One of the ways that I try to help the world invest better is to publicly offer up my reasoning behind every stock pick I make. Once per month, I pick one stock that I'll be putting my Roth IRA money into, and let Fools know which one I'm picking.

Earlier this week, I introduced  five stocks I was considering for this month. Below are those five stocks, with a mini-thesis behind each potential investment. Read on and you'll find out which one I'm putting my money behind, and at the end, I'll offer up access to a special free report on the one stock that makes up almost 12% of my real-life portfolio.


What It Does


Veolia Environnement (NYSE: VE  ) Waste and water management Great management and dividend offered by a company fixing past mistakes
Stratasys (Nasdaq: SSYS  ) 3-D printing Expensive stock, but futuristic technology with lots of potential
Intuitive Surgical (Nasdaq: ISRG  ) Robotic surgical machinery Great company with technology that could be used in further procedures
Heckmann (NYSE: HEK  ) Water management Leader in meeting water needs of gas and oil companies
Westport Innovations (Nasdaq: WPRT  ) Designs natural gas engines Large-scale adoption of natural gas would be a big deal

What I'm looking for
Before revealing my pick, it's important to review how I select companies for my Roth IRA. I prefer to buy and hold companies that I'm proud to own, regardless of how they perform as investments. After that, I hope to buy at a fair price.

As it stands right now, I actually own all five of these companies, so don't think the four unselected stocks are out of my favor. It's just that I only have enough money set aside for one company.

What's the safest of these five stocks?
Because I am a fan of all five, I'm simply going to pick the one that seems like the safest bet to me. I'll be honest: I can't point out any particular reason right now for using that as my criterion, but since I believe in all five companies, it's as good a differentiator as any.

When it comes to safety, profitability and low levels of debt are important to look for. You never know when tough economic times are going to hit, and having cash coming in -- with some sitting on the sidelines as well -- offers comfort.

Be gone, debt and unprofitability!
That helps eliminate three of the stocks on my list.

One of the reasons that I like Veolia is because the company deals with a crucial commodity -- water -- and the company's stock is beaten down. Unfortunately, the reason for this is that current CEO Antoine Frerot is making up for the excessive spending of his predecessor. Currently, the company isn't even turning a profit, and has only $6 billion of cash on hand compared to $25 billion of debt.

This criterion also eliminates the two stocks that are focused on the growing potential in natural gas. Though Westport Innovations has seen revenue more than double over the past year, it still isn't profitable, and two bigger threats still loom on the horizon: the possibility of an original equipment manufacturer designing its own natural gas engine, and the failure of industry to adopt natural gas as a fuel of choice.

The same is true for Heckmann -- which has likewise seen more than a doubling in revenue, yet hasn't turned a yearly profit. The company is making big moves to meet the water needs of gas extractors, but bigger players could still swoop in. And if the government or community organizations put a stop to fracking due to environmental concerns, it would have a big impact on Heckmann.

Which leaves us with two choices
That leaves me with Stratasys and Intuitive Surgical, two companies that I really can't go wrong with. Here's a quick look at some of the valuation metrics for both companies.



Price-to-Free Cash Flow

PEG Ratio

Intuitive Surgical 35 30 1.7
Stratasys 61 75 2.9

Source: Yahoo! Finance.

These numbers alone aren't enough to make a decision, but they can be used to paint a fuller picture of where these companies are. Stratasys is a leader in a breakthrough technology that has yet to prove itself on a large stage. Intuitive has proven, through repeated use of its da Vinci Surgical Robotic system, that it can be a mainstay in many hospitals. Though there's probably more potential upside with Stratasys, I'm going to be putting my money behind Intuitive Surgical this month.

As it stands, Intuitive actually makes up about 6% of my real-life portfolio -- a substantial amount. But there's another stock that's highlighted in our new special free report --"3 Companies Set to Rule Retail" -- that accounts for a full 12% of my portfolio. I'll give you a clue and tell you it's the first alphabetically of the three stocks discussed in the report. Get a copy of the report today to find out which stock I'm talking about, absolutely free!

Fool contributor Brian Stoffel owns shares of all the companies mentioned. The Motley Fool owns shares of Westport Innovations and Intuitive Surgical. Motley Fool newsletter services have recommended buying shares of Stratasys, Intuitive Surgical, Veolia Environnement , and Westport Innovations. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.

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