For well over a year now, I've done my level best to help the world invest better. Instead of just spouting out some opinions without any skin in the game, I've been backing up my picks in both my personal portfolio and my All-Star CAPS profile.
I've set up a lump-sum retirement portfolio, which is beating the S&P 500 by 19 percentage points over the past year and a half, and a growth portfolio, which is beating the S&P 500 by just under 10 percentage points so far in 2012.
But for those who want to be contributing regularly to their portfolios, I've also selected one stock per month that I'm throwing my Roth IRA money behind. So far, those picks haven't fared nearly as well as my other two portfolios, returning 6.6%, which slightly trails the S&P 500.
Last week, I introduced you to three companies I was thinking about buying; today, I'll reveal which one made the cut. I'll tell you why I picked what I did, and at the end I'll offer up access to a special free report on three solid dividend stocks every investor needs to look at.
The three contenders
The three companies I selected to look at were search giant Google (GOOG +5.14%), social-professional networking site LinkedIn (LNKD +0.00%), and natural gas engine designer Westport Innovations (WPRT 2.17%). Over the past few weeks, Google came out with earnings, while we have to wait until Nov. 1to hear from LinkedIn, and Nov. 8 for Westport .
It's a good thin I wait until the end of the month to make my selection, because a recent report from Westport had some interesting tidbits of information.
The company said that because of "recent feedback from Original Equipment Manufacturers (OEM) and fleet customers in North America and automotive OEM customers in Europe," it will lower its full-year guidance for 2012. Apparently, "heightened uncertainty in the economy and delayed availability of liquefied natural gas (LNG) infrastructure" led many companies to delay orders to Westport.
For those of us who like things put in plain English, this is what it means: If you're a trucker and own a Westport natural gas engine, you want to know there will be places where you can fill up your tank. If that infrastructure isn't in place, that makes it hard to justify paying up for a natural gas engine that might cause you more grief than anything else.
There are already promising developments in place to build that infrastructure out, ranging from plans by Royal Dutch Shell (NYSE: RDS-A) to build out a natural gas network in Canada to Chesapeake Energy's (CHK +0.00%) recent partnership to form compressed natural gas "in a box." Apparently, these developments aren't taking place fast enough to satisfy customers, and Westport had to lower expectations by over 16% for the fiscal year.
Though I plan on continuing to hold the stock and believe that there's still a lot of opportunity for Westport to play a big role in a potential natural gas conversion, news like this is more than enough to give me pause when it comes to buying shares of Westport this month.
And then there were two ...
That leaves me with Google and LinkedIn. Google is the big, well-entrenched-yet-still-nimble business, while LinkedIn is the pricey newcomer on the block that's changing the human-resources offices of companies around the world.
To be honest, this would be a much easier decision if I waited to make my decision until after Nov. 1, when LinkedIn's earnings come out. But in an effort to follow a regular schedule, I can only go based on what I know.
I've already gone over how I view Google after its last report: still a solid holding. At the same time, as it stands right now, I've already bought Google once for my Roth IRA, and it makes up more than 8% of my consolidated holdings.
LinkedIn, on the other hand, stands at just 1% of all my holdings. Yes, the company currently trades for a ridiculous P/E of 856, but that's largely because the young company is just barely profitable, returning $0.12 per share over the past year.
There are also a lot of naysayers -- people out there wondering whether deep-pocketed competition might catch up with the company.
I'll be the first to admit that this is definitely a possibility, but I also know that LinkedIn has an enormous head-start on everyone else. It would be very difficult to replicate the network effect LinkedIn has going for it overnight.
There's also no doubt LinkedIn is growing revenue like gangbusters, up 94% during the first half of the year.
So while I admit it's a risky choice, I'll be putting this month's money behind LinkedIn, considering it will still be a very small part of my overall portfolio.
