Hindsight might be 20-20, but tracking your investing through the smart use of a watchlist can help you correct your vision going forward. Nine months ago , I chatted with Motley Fool Stock Advisor analyst Jason Moser, who shared three companies on his watchlist, plus one that he rued letting get away. What did he learn, and more importantly, what does he like today?
From watchlist to portfolio
Back in November, Jason had his eye on Higher One Holdings (NYSE: ONE), a company perched in the middle of the financial relationship between a university and its students. By helping schools manage their financial aid disbursements and refunds, and charging a fee on each side, Higher One had found a sweet spot, but had yet to prove itself as a publicly traded company. Time solved that problem.
Shares climbed to all-time highs in the months after Jason originally shared the ticker with me, and he made it a purchase in his Rising Stars portfolio when it dipped in late March to $14.39 a share. At the time, he wrote, "I can see shares being worth about $17 today. This doesn't leave much room for error, but I also believe that Higher One has some serious growth potential ahead of it if things go well." Today, shares are, in fact, trading at nearly $17 (nice prognostication, Jason), and much of that growth potential remains as the company continues to pick up new clients.
A new concern
Jason has a thing for companies that are experts in service areas that others might prefer to outsource. Healthcare Services Group (Nasdaq: HCSG) is happy to handle housekeeping, laundry, linen, facility maintenance, and food services for health-care providers, more efficiently and cost-effectively than they could do those things themselves. He was concerned back in November about a run-up in share price. But even though shares cratered during the recent market volatility, Jason has new concerns: uncertainty surrounding health-care legislation and collections from Medicaid and Medicare.
"It's a genuine concern, but the price is down nearly enough to accommodate for that risk," Jason says. "The price is down from $16 when we talked to about $14 now. It's one of the only companies that does what it does, and I don't think people are going to stop getting sick. But I want to get a better handle on the risk this one entails."
Laying up
Jason has been waiting for a long time to buy Dick's Sporting Goods (NYSE: DKS). He loves the national specialty sports retailer, calling it a company that is there in every way ... except share price. The store is poised for tremendous top-line growth, says Jason, but he'd like a better price tag. In November, the price was hovering just above $30 per share. As I wrote then, "If it dips down to $25, Jason plans to back up the truck. And even if the stock price stays where it is, he's very tempted." Today it trades around $33.50, and Jason says that he'd now love to buy if it drops below $30. Watching and waiting...
And one that really got away
That strategy of patience blended with vulture-ism didn't work out quite so well for Jason on the fourth stock that we discussed back in November. He initially spotted Air Methods (Nasdaq: AIRM) when it was at $36, but shares of the operator of ambulances in the sky had soared to more than $42, moving out of his range. Today, the company, which owns and outfits the helicopters involved in air medical emergency transport, trades for more than $64. "Now it's really out of my price range," says Jason with a wry smile.
A smart watchlist can help you see the error of your ways and adjust your thinking in the future ... without it costing you a bundle. My Watchlist is yours free from the Fool. Click below to start following one of the stocks mentioned above:
