This article is part of our Rising Stars Portfolio series.
A powerful and unstoppable trend is sweeping across America. That trend is yoga.
That's right, yoga. Everywhere you look, Americans of all ages are dashing off to the yoga studio. This movement may represent a potentially huge opportunity for investors, so Rising Star Rex Moore decided to jump on the train this week. Is his investment a winner or a one-star "lemon?"
You'll find a summary of his buy recommendation below, along with three other buys from our Rising Stars.
Rising Star Buy: lululemon athletica
This week, Rex Moore bought shares of lululemon athletica (Nasdaq: LULU) for his multivitamin portfolio. The company makes yoga apparel and general athletic gear, and Rex believes "it can become one of the great retail brands of the next 10 years."
The numbers appear to support his case. Revenue growth has averaged 42% over the past three years, while net income has averaged 77% over the same period. And lululemon "stands up very well ... in almost every respect" to competitors like Nike (NYSE: NKE) and Under Armour (NYSE: UA), according to Rex. While there may be "hiccups along the way," Rex is taking a long-term view with this high-growth company. Read his article to hear his complete case.
Rising Star Buy: Schlumberger
With oil firmly above $80 a barrel, Rising Star Bryan White purchased shares of Schlumberger (NYSE: SLB), one of the largest oilfield services companies. Bryan believes that oil companies will aggressively begin spending on exploration and feels that Schlumberger is "in a superior position to its competition to benefit from a ramp up in oil spending."
It's the company's size that "helps produce the most attractive profit margins when business booms." That's why Bryan prefers it to competitors like Halliburton (NYSE: HAL) and Baker Hughes. So despite Schlumberger's recent run-up, Bryan expects its earnings per share to surpass its prior peak in 2008. Read the article to learn more about Bryan's thinking on this attractive stock idea.
Rising Star Buy: Textron
This week, Rising Star Jim Mueller discovered an ideal investment idea for his Messed-Up Expectations portfolio. He believes that Textron (NYSE: TXT), which operates in the aircraft, defense, and finance businesses, is being grossly undervalued by the market at the moment. So he decided to buy shares.
Jim has dug into the numbers and feels that Textron is being valued as if it will never grow free cash flow again. This seems strange to him, especially since the company has managed to "grow FCF by an average of 12% a year for the past five years, even through the recession." To learn more about Jim's compelling analysis, read his article.
Rising Star Buy: SunPower
This week, Rising Star Alyce Lomax purchased shares of SunPower (Nasdaq: SPWRA), a provider of high-efficiency solar solutions that took a beating last year, along with its entire industry. Alyce views this as "an opportunity to profit off others' pessimism and buy a promising green energy stock at a low, low price."
The bet here is that solar energy is here to stay and "still has plenty of growth prospects," despite the fact that investors fled from this segment last year. If you'd like to invest in "a company that seeks to harness the power of a clean, green resource that won't run out," then check out Alyce's article.
Old and new
One theme of this week's picks is "old versus new." On one side, we have grizzled stocks like Schlumberger and Textron -- you can almost smell the cigar smoke in their boardrooms. On the other side, we have yoga and clean energy -- I actually feel better about myself for having just typed that sentence.
In the spirit of this week's theme, we have an old and new way for you to follow our Rising Stars. You can either follow me on Twitter to get all the latest articles from our Rising Stars or just click the links below to start following the stocks mentioned above. One way or another, we'd like you to follow us.
