This article is part of our Rising Stars Portfolio series.
The phrase "crossing the Rubicon" refers to Julius Caesar's decision to cross the Italian river of that name, and thereby provoke a civil war. Ever since, that idiom means to pass a point of no return.
Rising Star analyst Andrew Sullivan crossed his own personal Rubicon back in December when he decided to put all of his cash into gold. And he forded the river yet again this week with an aptly named pick, which is summarized below, along with two other buy recommendations from our analysts.
Rising Star Buy: Rubicon Minerals
Andrew bought shares of Rubicon Minerals (AMEX: RBY) for his portfolio this week. This mineral exploration company has huge, proven deposits of gold with quite a lot of potential deposits as well. So despite shares rising by almost 60% since he recommended the stock in a July 2010 special report, Andrew feels "this stock is still cheap, with bags of upside potential."
Andrew feels that it's just the beginning for this attractive company. As the "size of its large deposits is further delineated, the market will take notice," he believes. In addition, the company may be an attractive acquisition candidate, which could lead to a substantial buyout premium, as a result of the rising gold market. Andrew concludes, "All those strengths make Rubicon a wonderful way to gain exposure and leverage to gold."
To hear more of his thinking, read the article.
Rising Star Buy: Double-Down on Western Digital
Rising Star Jim Mueller added to his position in hard drive maker Western Digital (NYSE: WDC) this week. After the company's earnings release Tuesday, Jim believes even more strongly that "the market was underappreciating the continued need for inexpensive mass storage for digital content."
Jim takes us through a compelling valuation model that suggests the shares could be worth 31% above last Friday's close. To have a closer look at his model, read the piece.
Rising Star Buy: Red Robin Gourmet Burgers
This week Rising Star Jim Royal got back in line for another helping of Red Robin Gourmet Burgers (Nasdaq: RRGB). After buying shares in the company last month, he felt there were good reasons to add to his position.
First, he thinks shares of the fast-food turnaround story are cheap relative to those of top operators like McDonald's (NYSE: MCD) and Chipotle (NYSE: CMG). Additionally, the company is now focused on generating free cash flow, and activist investors have been buying shares, "auguring the possibility of a buyout," according to Jim.
To read more about Jim's compelling investment idea, read the article.
The die has been cast
In the coming months, it will be interesting to see how Andrew's big bet on the future of gold plays out. Will he emerge, like Caesar, victorious among his fellow Rising Star analysts? Or will he become our version of Pompey, Caesar's rival, who was ultimately defeated?
You can follow me on Twitter to keep up-to-date with all of the latest activities of our Rising Stars. And you can click the links below to hear more on each of the companies mentioned above.
