For well over a year now, I've been doing my best to help the world invest better. Every month, I publicly call out a few stocks that I'm considering adding to my Roth IRA; on Friday, I'll let you know which stock made the cut.
So far, my monthly picks have returned about 12.5%, slightly more than the S&P 500 return over the same time frame.
Read below to find out what five stocks I'm thinking about buying and why, and at the end I'll be offering up access to a special premium report that digs super-deep into the details of one of the companies I'm considering.
3-D printers on the downswing
There's no doubt that 2012 was The Year of the 3-D printers. The industry's two major players -- Stratasys (NASDAQ:SSYS) and 3D Systems (NYSE:DDD) -- increased by 157% and 247%, respectively. After such a meteoric rise, things have been cooling off lately.
But even though 3D Systems, specifically, missed on revenue estimates and only guided in line with expectations, the number I like to look at for both of these companies is their respective market caps. With neither company clocking in higher than $3 billion, these are relatively small valuations compared to the possible -- though certainly not guaranteed -- long-term potential the technology holds.
Stratasys will be releasing earnings next week -- something I'll be keeping my eye on -- but the dive its taken lately means that both of these companies will be strong considerations for my stock to buy in March.
Were these really such huge disappointments?
Two other companies that I'm considering are ones that have taken big hits since releasing fourth-quarter numbers. Wall Street was apparently unimpressed with what it saw, but as best as one can see over the long run, I still think there's a lot to like.
Whole Foods (NASDAQ:WFM) came in ahead of earnings expectations, but that couldn't stop the company's shares from falling more than 10%. The main culprit was weakened guidance -- especially due to margin compression.
But management made it perfectly clear last year that the margins the company accomplished simply wouldn't be sustainable. Apparently, that warning was lost on some. The bright side is that it offers up an opportunity to buy shares in the company at a significantly cheaper price than earlier this year.
The second company on my list of earnings disappointers is IPG Photonics (NASDAQ:IPGP). The company is a leader in making fiber-optic lasers that are smaller, easier to handle, more powerful, and cheaper than their carbon-based counterparts. Though there are several industries these lasers can be used in, they are most popular in helping to weld heavy machinery.
After the company reported earnings that missed estimates, shares were down 14% earlier this month. One of the things that makes IPG unique is that it is vertically integrated: It makes all the parts and assembles them in-house, rather than contracting certain aspects out.
This gives the company more independence -- and can be a boon when there's a burst of buying orders -- but it can also be a liability for investors when revenue doesn't come in where expected; the fixed costs of maintaining the entire supply chain eat into earnings.
Over the long run, I like the integrated model when you consider that IPG's technology is second-to-none and gaining market share in welding and other applications.
Will I ever shut up about this company?
Last on my list is a company I can't seem to stop talking about: Chinese search engine Baidu (NASDAQ:BIDU). I bought the stock back in January, and I called it out as my top stock for all of 2013.
But despite a 2012 that saw revenue grow 54% and income jump 57%, the stock now trades for just 13 times expected earnings for 2013. That's Apple-esque insane! Investors seem to be worried by the fact that the company is spending more money right now -- though I think that's the right move to solidify the company's leading position against the competition -- and the simple fact that Baidu is located in China.
At today's prices, I think those worries are fully baked into the stock.