Several global events have conspired to bring the stock market lower over the past six weeks. Our employment picture is only improving by baby steps, growth in China appears to be slowing, and Europe is just one hot mess. On top of that, only 25% of investors are bullish on stocks over the next six months.
While it's understandable to be worried, veteran stock pickers know that when there's fear in the streets, it often represents the best time to be buying stocks. Luckily for you, our Rising Stars have been publicly calling out their favorite stocks for more than a year. A check of their portfolios shows that there are definitely quality companies ripe for the picking right now.
Read below to find out what five of the most recent buys have been, and at the end, I'll offer you access to a special free report on three stocks that will help you retire rich.
No introductions needed here. Dave Meier and John Reeves recently picked the world's most valuable company for their portfolio. As tech investor Marc Andreessen pointed out, today's mobile players have "the opportunity to put a computer in the pocket of 5 billion people. Practically everyone is going to have a general-purpose computer in their pocket."
Think about that for a minute. Then consider the fact that from 2010 to 2011, Apple increased its market share in the global smartphone space from 15.8% to 23.8%. Then consider the fact that emerging markets have accounted for more and more revenue and still have a long runway for growth. Clearly, with today's P/E sitting at just 14, Apple's worth considering for your portfolio.
Last Friday, Alyce Lomax decided to add Fluor to her portfolio, a stock that focuses on socially responsible investing. The company is a global provider of construction, engineering, and project management services. This sector has been hard hit since the Great Recession, but Fluor nabbed a 12% increase in revenue last year, backlog orders are up 14% since then, and the company has a rock-solid balance sheet. On top of that, it currently trades for just 12 times forward earnings, and it offers a dividend.
Beyond the accounting metrics, the company is doing well by doing good. Alyce says, "Although this may not sound like the kind of company that could be a bastion of social responsibility, one of the reasons it hit my radar was its inclusion in Ethisphere's list of the World's Most Ethical Companies. In fact, it's made that list for six straight years."
Chipotle Mexican Grill
Alyce also bought shares of everyone's favorite burrito maker in late April. Make no mistake about it: Chipotle is a richly valued stock. But that doesn't mean there isn't room to grow. The company's 1,230 stores equal only 3.6% the size of McDonald's built-out base, and even Wendy's has over five times the as many restaurants as Chipotle. Also, you can't forget about the company's promising ancillary concept: ShopHouse Southeast Asian Kitchen.
Like Fluor, the company also has a reputation for social responsibility. "Chipotle has committed to turning the traditional fast-food model on its ear, 'serving customers the very best ingredients, all raised with respect for the animals, the environment and the farmers.'"
Rising Star Jim Mueller recently went back to a company he's already invested in: small aircraft and helicopter maker Textron. Revenue has been steadily improving for the company as the economy crawls back to normal, while profit margins are also expanding nicely.
Jim notes that his bullishness on the company comes from industrywide improvements as well:
My confidence is based on this being a broad sector improvement, not just at Textron. General Dynamics, maker of rival Gulfstream jets, reported strong interest in its planes, as did Textron. Honeywell also reported increased profits in its aerospace division.
Finally, if you've been losing sleep over your investments lately, Anand Chokkavelu has just the remedy for you: high-end mattress maker Tempur-Pedic. The company has released a slew of good news lately: Sales were up 18% during the first quarter of 2012, while earnings increased by 26%, and the company reiterated its full-year guidance.
But analysts were hoping for a bump in the company's outlook, and when Tempur-Pedic announced it would be slashing prices on one of its mattresses for holiday promotions this summer, investors went fleeing. But Anand believes the market is having a major overreaction, and it's allowing investors to buy in at bargain-basement prices.
Further food for thought
Clearly, we think our Rising Stars represent the cream of the crop. That's why we let them invest the Fool's money on our behalf. If you'd like to know where they think the best bets for your retirement portfolio are, you should check out our special free report: "3 Stocks That Will Help You Retire Rich."
Inside you'll get the name of three long-term winners our analysts truly believe in. Get your copy of the report today, absolutely free.
The Motley Fool owns shares of Apple, Textron, General Dynamics, Fluor, Chipotle, and Tempur-Pedic. Motley Fool newsletter services have recommended buying shares of Apple, McDonald's, and Chipotle, as well as creating a bull call spread position in Apple and a bear put spread position in Chipotle. The Motley Fool has a disclosure policy.
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