What companies are tomorrow's big winners? In our ongoing series, I'm chatting with Fool analysts and advisors to discover the stocks they're watching and the catalysts that would signal it's time to buy.
Today, Motley Fool Pro and Motley Fool Options advisor Jeff Fischer shares three companies that are on his watchlist and that he'd strongly consider buying if the market cooperates. (For your convenience, you can now create your own version at MyWatchlist.com, your free customized hub to follow the performance and Fool coverage of the companies you care about.)
The real-money portfolio service Motley Fool Pro has the flexibility to use options and to go either long or short, so Jeff's watchlist there is rather lengthy -- instead of just listing companies Pro may buy, Jeff and team also track companies they might potentially short.
One in that latter group is salesforce.com (NYSE: CRM), the cloud software company that saw its stock soar 80% in 2010. While Jeff admires the business and the innovative software salesforce.com is selling to businesses on a subscription basis, the stock simply appears to be expensive at 240 times trailing earnings and 87 times estimated earnings for the year ending January 2012. If the market gives back some ground, salesforce could easily decline 20%, making it a successful short.
On the long side, Jeff is keeping an eye on Cameco (NYSE: CCJ), the world's largest uranium producer. Pro owned shares from $16 until nearly $30, before selling because of valuation. Uranium prices rocketed at the end of 2010, sending Cameco well above Pro's estimated fair value. If the stock returned to the mid-$20s, Jeff and his team would be interested again in buying shares or using options on it. Given the volatility of commodities, by keeping Cameco on a watchlist, it may just be a matter of time before an opportunity arises.
Over at Motley Fool Options, which relies on six Motley Fool newsletters for its stock targets, Jeff has his eye on Best Buy (NYSE: BBY), an earlier position that has fallen from grace after flubbing holiday sales in November. The stock is inexpensive enough in the low-$30s that it deserves a second look and consideration despite management's recent gaffes. Best Buy remains highly profitable and the volatile business has been known to have hit-and-miss quarters in the past, making for a volatile stock. Buying after the "misses" may reward patient investors.
And that's why it pays to watch. You can make smarter investing decisions with your own version of My Watchlist, new and free from the Fool. Click below to start following one of the stocks mentioned above:
