This article is part of our Rising Star Portfolios series.
It's been six months since I started my Rising Stars portfolio, and I've had a blast hunting for great companies to add to the mix. So far, I have nine in the portfolio and a nice watchlist of potential winners. And while the watchlist is a living, breathing thing that seems to always change, it contains a few companies that have stuck around for a while now.
If you've seen the video explaining my investing approach for my "motley" portfolio, you know that I'm looking for some global exposure. Elbit Systems
Let's be clear: I'm a lover, not a fighter. That said, I'm also a realist, and countries will always need defense. The alternative is simply unacceptable. And with Elbit's business so well spread out, I like the global diversity this company has to offer. Having grown revenue at a 16% annualized rate since 2000, and trading today at a historically low 13 times earnings, Elbit looks pretty tempting.
Finger on the pulse
It seems like whenever I mention Masimo
I love innovative companies that challenge convention. Masimo's CEO Joe Kiani founded Masimo as a "garage start-up" back in 1989 in his quest to "solve unsolvable problems" and hasn't looked back since. With a history of innovation and new products improving health care, not to mention a passionate founder behind the wheel who has a substantial stake in the company, I think Masimo has some real potential. While it's tough to value a fast grower that came to the market in 2007 and is still somewhat new to the market, the stock is trading at about 27 times earnings, which is a bit lower that its five-year average of 39 times.
While the company's growing scale is helping improve margins and comparable store sales, I also like management and their mission. Initiatives like table service, expanding drive-through offerings, and catering are adding value and their quality supply chain operation is a key contributor to the success of the company as it continues to grow. And the community-based Panera Cares concept is gaining traction, as well.
At first glance, the stock may seem a bit pricey at 30 times earnings, but for context, Chipotle Mexican Grill
To wait, or not to wait; that is the question
So there are the three companies that I am keeping a close eye on. I can't really say that one holds priority over another; I like all three of them a lot. And if the price is right, you may just catch all three of these added to my portfolio at some time in the near future. Wanna talk shop? Swing on by my discussion board and say hi. Or better yet, click here and follow me on Twitter.
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