During the past two years, the Motley Fool has allowed the public to follow real-time stock picks by some of our top analysts absolutely free of charge.
Within the last couple of weeks, three of their picks have popped up on my radar. Read below to find out which companies they picked, and at the end, you'll get access to a special free report detailing three stocks to help you retire rich.
This company specializes in data storage and transportation. In the most basic sense, Infinera wants to make the transmission of data between electronic devices as quick and seamless as possible.
Fool analysts Dave Meier and John Reeves think that while the company has been performing well lately, the stock price hasn't been following suit. In fact, Infinera's stock now sits roughly 40% lower than it did in mid-February. In our analysts' opinion, this represents a buying opportunity.
"Data storage and usage is growing exponentially," they note, and Infinera is poised to benefit from the trend. Unlike its competition, which includes Alcatel-Lucent (UNKNOWN:ALU.DL), Infinera uses photonic integrated circuits for its optical network equipment. This makes its products require both less energy and less physical space than the competition.
Dave said that if Infinera is able to land a top-tier customer -- like a big telecommunications company -- with its patented DTN-X technology, the stock price could rise precipitously.
Staying with John and Dave, they also think shares of InvenSense look cheap compared to their long-term potential. InvenSense is a company that makes motion-sensor chips. That may sound pretty basic, but practical applications have been growing recently.
If you've ever played a game with Nintendo's Wii controllers, which sense your motion, you have an idea for what InvenSense's technology can do. But the Wii was one of the first major breakthroughs for the technology. Recently, InvenSense has been collaborating with several companies -- including Google to improve its Android devices, and even Stanley Black & Decker (NYSE:SWK) to create a motion-activated power screwdriver -- and there's no telling how many devices of the future will utilize motion-sensor chips.
John and Dave have a high conviction in the stock's ability to perform. Currently, it is the pair's largest holding, accounting for roughly 10% of their real-money holdings. They not only believe in the company and the trend that the company is attempting to capitalize on, but they also believe that at today's prices, investors are getting a great entry point.
You've got to have some serious reasons to invest with a company that played a central role in the near-collapse of the global financial system just four years ago. But Fool analyst Jim Royal believes that investors need to look toward the future, not the past, to appreciate the opportunity presenting itself in this major insurer.
As Jim puts it, "Everyone knows, just knows, that it's a terrible investment after its massive fall from grace in 2008. It's so ridiculously tainted that most investors wouldn't even think of buying it, let alone actually buy it. But that's exactly what gives investors this opportunity."
The company, according to Jim, has substantially cleaned up its act. Exposure to risky derivatives is down 95% since reaching a peak a few years back. The United States government is exiting its position required to save the company, too. While it owned 62% of the company earlier this year, that position is down to 16% today. All that selling also created more supply than demand, pushing the price lower when fundamentals were relatively sound.
When you take all this together, you have a solid business that is selling for about half of its book value, has remedied some of its structural weaknesses, and has an unusual situation pushing prices lower than normal.