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 own watchlist.
1. CAPS Weekly Top Stock Idea: Genco Shipping & Trading
Each week, I cull a top stock idea from the pitches made on CAPS, The Motley Fool's 170,000-member free investing community. Genco Shipping & Trading, a pick from July, caught my eye, since its shares have dipped amid concerns of falling lease rates for ships. Rivals such as Diana Shipping haven't suffered quite so steep a drop; since Diana uses longer-term contracts than Genco, it's not as affected by day-to-day changes in rates. Meanwhile, fellow competitor DryShips
- Add Genco Shipping & Trading to My Watchlist.
2. Nordic American Tankers
Nordic American Tanker is an international tanker company that ships crude oil around the world. Like competitors K-SEA Transportation
Nordic American has a fairly unique dividend policy: It pays out cash to shareholders based on its net operating cash flow, then funds capital expenditures by issuing new shares. This means its dividend can fluctuate wildly from year to year.
As China's demand for oil rises, Nordic American's excess supply should find employment. The resulting rise in shipping rates would benefit Nordic's dividend. Rates had risen steadily since early November, but they took a tumble right around Christmas. Additionally, Nordic has a strong balance sheet with barely any debt. If you're interested in the oil tanker business, Nordic American is definitely one for your watchlist.
- Add Nordic American Tankers to My Watchlist.
3. SandRidge Energy
SandRidge Energy is run by Tom Ward; he co-founded Chesapeake Energy
Going forward, the company has a large amount of debt on its balance sheet; as SandRidge begins to pay down that debt, the assets it purchased should pay off for shareholders. In another good sign, superinvestor Prem Watsa holds a large stake in SandRidge through his company, Fairfax Financial. SandRidge is definitely an energy player worth watching.
- Add SandRidge Energy 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).
Dan Dzombak's musings and articles he finds interesting can be found on his Twitter account:@DanDzombak. Chesapeake Energy is a Motley Fool Inside Value recommendation. Motley Fool Alpha owns shares of Chesapeake Energy. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.