This article is part of our Rising Star Portfolios Series.
Most investors don't keep tabs on their companies' fundamental value. That's a mistake. If you take the time to read past the headlines and crack a filing now and then, you're in a much better position to spot potential trouble early. Better yet, you'll improve your odds of finding the underappreciated home run stocks that provide the market's best returns.
We can help you keep tabs on your companies with MyWatchlist.com, our free, personalized stock tracking service. Here are three stocks from my watchlist.
1. CAPS' Weekly Top Stock Idea: Lloyds Banking Group (NYSE: LYG)
Each week, I cull a top stock idea from the pitches made on CAPS, The Motley Fool's 170,000-member free investing community. Lloyds Banking Group, a pick from last month, caught my eye since it had fallen from where it was picked. Lloyds, along with other European banks such as Allied Irish Banks (NYSE: AIB) and Bank of Ireland (NYSE: IRE), has seen its shares fall over the past three months over general fears of European banking problems.
To see the pitch selected for CAPS' Weekly Top Stock Idea, click here. If you want to follow my weekly picks, you can subscribe to the series' RSS feed or follow on Twitter: @CAPSTopStocks.
- Add Lloyds Group to My Watchlist.
2. Transocean (NYSE: RIG)
Transocean caught my eye after it was one of Fortune's picks for the best stocks for 2011. Transocean, along with competitors Seadrill (Nasdaq: SDRL) and Noble (NYSE: NE), operates offshore drilling rigs to drill wells around the world. Transocean's stock had been hit hard after the disaster with Deepwater Horizon, which was owned and operated by Transocean but leased to BP. The rig was insured, and Transocean maintains that its contract with BP shields it from all liability including gross negligence. As oil prices rise, Transocean's rigs will be in higher demand, and lease rates should rise accordingly. Currently trading at nine times earnings, this is definitely a stock to add to your watchlist.
- Add Transocean to My Watchlist.
3. Mosaic (NYSE: MOS)
Mosaic was also one of Fortune's picks for 2011. Like Potash Corp. of Saskatchewan, the company manufactures potash, phosphates, and other fertilizer products. Both companies have some potential catalysts. China has reportedly considering restricting its sale of phosphates outside the country, which would be a boon for the companies. Both companies have a large barrier to entry in that the cost of building a new potash mine is in the billions of dollars. As the world's population grows, fertilizers will become more important every year to meet the demand for food. Mosaic is a good way to get in on that trend.
- Add Mosaic to My Watchlist.
My Foolish bottom line
If you're looking for more information on these companies, keep checking in on my Rising Star portfolio in the coming weeks as I look further into each of them.
This article is part of our Rising Star Portfolios series, where we give some of our most promising stock analysts cold, hard cash to manage on the Fool's behalf. We'd like you to track our performance and benefit from these real-money, real-time free stock picks. Click here to see all of our Rising Star analysts (and their portfolios).
