In case you hadn't heard, depending on the day, we're officially in a bear market. And while that moniker usually isn't news to investors' ears, it should be.
If you truly believe in "buying low and selling high," then now would be an excellent time to buy low. To see which deals are truly compelling, I've turned to our Rising Stars to see what they've been putting the Fool's money into.
Howard Hughes (NYSE: HHC)
As Fool Jeremy Myers explains, this company is a real estate investment trust that was spun out of General Growth Properties during the retail REIT's bankruptcy reorganization. Myers says the company is a great investment for three compelling reasons.
- Many of the assets under Hughes' management are on the books for far less than their actual market value -- and this represents an excellent opportunity to capitalize on the spread between paper and real-life value.
- The company has already taken significant markdowns after an extensive review.
- The management truly believes in the opportunity before them: They have invested $19 million of their own money in the company!
- Add Howard Hughes to My Watchlist to stay up to date on all its latest news.
Starbucks (Nasdaq: SBUX)
Rising Star leader Alyce Lomax tapped Starbucks for her portfolio back in late September.
Her reason for adding the company to her portfolio is pretty simple: It's an excellent company looking to expand abroad. "The coffee giant's vows to delve deeper into China and transform tea drinkers into Starbucks aficionados is a massive market opportunity. It plans to triple its number of Chinese locations by 2015, which would represent a total of 1,500 cafes. China's middle-class population is exploding -- it's expected to surge to four times that of the U.S. in a single generation."
- Add Starbucks to My Watchlist.
Denbury Resources (NYSE: DNR)
Fool David Meier got all visual on us while explaining why he likes this company. There are two undeniable trends in oil, Meier argues: "production is rising while reserves are falling." A quick look at the charts below explains what he's talking about.
Source: U.S. Energy Information Administration.
While this has led some stalwarts like SandRidge Energy (NYSE: SD) and Chesapeake Energy (NYSE: CHK) to shift their focus to oil from natural gas, it has presented an excellent opportunity for Denbury.
The company buys up old wells that others have left for dead and squeezes every last bit of oil out of them: "Denbury injects carbon dioxide into an existing well. The gas fills the well and mixes with the oil, making it more slippery. The pressure forces the remaining oil out of the crevices to the surface. After a little cleanup, the crude is ready for market, and the CO2 that isn't recycled remains sequestered in the ground."
- Add Denbury Resources to My Watchlist.
Joy Global (Nasdaq: JOYG)
This company is in the business of making surface and underground mining equipment, and Fool Jason Moser loves it. It's not so much that demand for coal and other materials is expected to boom stateside anytime soon. Rather, Jason is excited about the fact that countries outside of the Organization for Economic Co-operation and Development -- like China and India -- "are another story; projections there are for coal consumption growth of 76%. Furthermore, from 2008 to 2035, coal is projected to account for more than one-third of total non-OECD energy consumption. Below is a graph charting estimates for non-OECD consumption by region":
If the world's going to need more coal, Joy Global will provide the tools to get it!
- Add Joy Global to My Watchlist.
Freeport-McMoRan Copper & Gold (NYSE: FCX)
Finally, staying on the theme of mining, Fool Jim Mueller is putting his faith in this miner of (you guessed it!) copper and gold. Jim has several reasons for buying this company, which has operations in North and South America, Indonesia, and Africa.
First, their production costs for copper are relatively low, and even if the price of copper falls 50%, they'd likely still be able to make money on it. Second, they have a strong balance sheet. And most important for Jim, who likes to invest in companies that are priced ridiculously low, the company is undervalued.
- Add Freeport-McMoRan Copper & Gold to My Watchlist.
Notice a trend here? Profit from it!
As you may have guessed, energy and natural resources have played a large role in our Rising Stars' purchases lately. I have news for you: They've played a large role in the companies founding Fool David Gardner has recommended to his Stock Advisor subscribers as well.
In fact, The Motley Fool has a special video report about one of his favorite stocks for the natural gas movement: "One Stock to Own Before Nat Gas Act 2011 Becomes Law." A congressional announcement on passage of this law could come any day now. Watch this video before it does, and it's too late. This report is yours today, absolutely free!
