Our investing hero Peter Lynch once said that the best stock may be the one you already own. Students of investing have heard that gem many times before, of course, but that doesn't make it any less true.
In addition to scouring the investing landscape for new ideas, we'll be identifying our favorite existing recommendations from the portfolio each month. Here are the three best buys for May from the 10-Bagger portfolio:
In today's data-driven world, processors that sit idle waste both time and money. Fusion-io
More and more companies see the benefits of Fusion-io's products, and the company reported 40% revenue growth for its most recent quarter. The market, alas, didn't care for its flat sequential revenue guidance. Fortunately for investors, it's likely that the slowdown is only temporary. Management says there's still considerable demand out there. And the company's latest product, the ioDrive2, is ready to meet it.
Much of that demand comes from the enterprise sector, namely customers like Apple
The bottom line is that the potential market remains large, and the company continues to upgrade its products. We think that will lead to plenty of future growth, making today's stock price attractive for long-term investors.
2. MAKO Surgical
Even with the short-term miss, it's important to look at long-term trends. Here's how things have been progressing.
Source: S&P Capital IQ.
With growing systems and procedure sales, the spectacular decline in MAKO's share price is completely disproportionate relative to the company's long-term future. Our aging population will need more and more knee and hip replacement surgeries. And, according to management, MAKO's robots help hospitals meet that demand -- and make money for the hospital in the process. That's what makes MAKO Surgical attractive over the long run.
We live in a device-filled world, and InvenSense
Coming out of earnings, the market punished the company. The results appeared solid, but the company tweaked its revenue guidance slightly. The market didn't want to hear that and the stock sold off. We like when markets do irrational things. That's what provides us with opportunities.
There are numerous existing and potential devices that will use these sensors in the future, and InvenSense is the clear leader in producing them. It will look to put sensors in smartphones, tablets, fitness equipment, digital cameras, and anything else it can dream up. Right now, it's the standard for Android-based phones, and it's working with Microsoft
All three of our best-buy companies have seen their share prices decline considerably over the past couple of weeks. It's been an unpleasant sight to see, and we've taken a closer look at all three businesses to make sure the underlying investing theses haven't changed.
We remain excited by all three of these businesses, and take solace from another quote from Peter Lynch. He once said, "[Your] ultimate success or failure will depend on your ability to ignore the worries long enough to allow your investments to succeed. It isn't the head but the stomach that determines the fate of the stock picker."
Wise words from an investing legend. For additional investing ideas, be sure to follow us on Twitter, @TenBaggers. You can also add each of the best buys now to your very own My Watchlist to get all of the latest coverage.