As I fund my SEP-IRA a little early this year, I'm ready to put my money where my mind is. I want to make the most of freefalling share prices by buying into the stocks that I've been eyeing earnestly during the market's swoon.
I aim to buy four new stocks on Friday. Why am I not buying them right now? Well, we do have trading restrictions in place. I couldn't have bought into these companies this morning -- ahead of you.
Waiting a few days will also give me time to dig a little deeper into my due diligence. As long as the fundamentals haven't crumbled, or the share prices haven't shot through the roof, I'll be ready to buy into these four investments on Friday.
Travelzoo (Nasdaq: TZOO)
As a longtime fan of the travel-deals publisher, I've learned to respect its ridiculous volatility.
The stock began 2004 in the single digits, only to top $110 by December. It gave most of those gains back in 2005. In this past year, the shares have lurched from the pre-teens last summer to as high as $103.80 just four months ago. Most of those gains have now vanished as well.
Travelzoo has a history of bouncing back with a vengeance, and it's in much better shape now than it was going into its two previous short-lived rallies. Its overseas operations are now profitable, and Travelzoo's Groupon-like initiatives have added a potent layer of incremental revenue.
Analysts lowered their projections after Travelzoo's rare quarterly miss this summer, but it's hard to pass up on this recession-ready contender, now trading for just 17 times next year's forecasted earnings.
Liberty Capital (Nasdaq: LCAPA)
Now that John Malone made the sane decision on Barnes & Noble (NYSE: BKS), it's time to give him his halo back.
Liberty Capital's largest portfolio holding is a 40% preferred share stake in Sirius XM Radio (Nasdaq: SIRI), valued at roughly $4.6 billion alone. Because of this stake, we've previously recommended Liberty Capital as a smarter satellite radio play than Sirius XM itself.
Liberty Capital's market cap is a little more than $5 billion, but it includes small stakes in several publicly traded companies, as well as the Atlanta Braves franchise. Add it up, and Liberty Capital trades at a tempting discount to its underlying assets. If you believe in the future of Sirius XM -- and I do -- Liberty Capital is one way to play it.
Wisdom Tree Asia Local Debt (NYSE: ALD)
I won't only make pure company plays this week. I'm not keen on the greenback, and if the U.S. dollar continues to fall relative to glitzier Asian currencies, I may as well profit from the slide.
This ETF invests in short-term Asian debt -- ex-Japan -- in the local currency. This isn't simply a play on the rising yuan in China. In fact, the fund has larger stakes in South Korea and Australia (at 11.2% stakes each) than in the world's most populous nation.
The payouts aren't much, with an indicated yield of roughly 2% after the fund's reasonable 0.55% expense ratio. However, the rising Asian currencies should pay off nicely. As long as the share price isn't trading at too rich a premium to net asset value -- which closed yesterday at $52.99 -- I'm going in.
Hewlett-Packard (NYSE: HPQ)
How's this for a contrarian play? I've been bashing HP since last summer -- even making it the trash-worthy subject of my "Throw This Stock Away" column two months ago -- and now I'm likely days away from bellying up to the shareholder bar.
I don't necessarily see a renaissance here. I'm still down on the prospects of many of the blue-chip tech stocks, and HP's all but waving the white flag of surrender on webOS and its PC business, which won't win it new fans. Yes, HP is right to think outside the box, but competition lurks in the suddenly crowded business services market.
However, it's hard to resist HP now that it's trading at a mere five times this year's projected profitability. It's almost a can't-lose situation. If CEO Leo Apotheker can dig his company out of this mess, shareholders will benefit. If he fails, he'll either be replaced, or the company will be acquired, and investors will still likely come out ahead.
Either way, I can't wait until Friday.
Agree with Rick? Disagree with Rick? Want to talk him into new purchases for Friday? Let him know in the comment box below.
