It's not often that you get to see, in real time, how some of the analysts you follow are performing. With our CAPS system, that's now possible. Even more rare is the ability to get real-time updates on what analysts are buying and selling -- all for free.
But that's exactly what we offer at The Motley Fool, through our Real-Money Stock Picking program. Ten of the Fool's in-house analysts are making real purchases with the Fool's money. I've highlighted three of those buys made in April, and the reasoning behind them. At the end, I'll offer up access to a special premium report on one of these three companies.
Vermillion Energy (NYSE:VET)
Analyst Nathan Parmelee, having worked for years on The Motley Fool's Global Gains team, focuses on companies that have a big impact abroad. Usually, these are the types of plays that the average American investor might overlook.
Looking to make an addition to his portfolio from the energy sector, Nathan considered Vermillion, Canadian oil-sands specialist Suncor Energy (NYSE:SU), and global oil and natural gas giant ConocoPhillips (NYSE:COP). Though Nathan believes all three are exceptional values right now, Vermillion was the pick for his real-money portfolio.
The reasoning was actually quite simple, as Nathan stated: "I like it for its diverse production base, seasoned management, and dividend growth potential as its production expands over the next few years."
One thing that differentiates Vermillion from other Canadian-based energy companies is that the company decided to go global back in the 1990s, and it has a wide range of properties in Canada, France, Ireland, Australia, and the Netherlands.
It seems that management has also created an ideal working environment, as the chief complaint found for the company on Glassdoor.com's website is that employees like the company so much, they don't leave, making it a little hard to wait for a promotion.
I think focusing on some these "soft" variables at a company is important. And when combined with the company's healthy 4.5% dividend, I can see why Vermillion makes a compelling investment case right now.
Retail Opportunity Investment Corp. (NASDAQ:ROIC)
Fool analyst Michael Olsen tends to focus on overlooked companies that offer up deals based on the difference between a stock's price and its intrinsic value. His recent pick of ROIC stock is right down his alley.
ROIC got its start a few years ago, when a group of real-estate professionals collected capital and recruited proven real-state guru Stuart Tanz to lead the company as CEO. As Michael puts it, the company's purpose is pretty simple: "accumulate a collection of hard-to-replace shopping centers in space-constrained markets."
The reasoning is pretty simple. Following the Great Recession, land was cheap. And by buying up space in well-to-do, crowded areas, ROIC's investors were bound to be long-term winners. While the 4.4 million square feet that the company has gobbled up recently hasn't returned the cash some had hoped, Michael sees this changing fairly soon. And being a REIT, the company's 4.2% dividend is guaranteed to grow when earnings move up.
I tend to stay away from REITs, as they're out of my realm of expertise. But if you like REITs with good management and a healthy dividend, this player is worth looking into.
Whole Foods Market (NASDAQ:WFM)
Finally, we have a recent pick from Joe Tenebruso, one of our two analysts whose portfolio has returned 34%.
In Whole Foods' stock, Joe sees a company that looks expensive over the short term but is more than fairly priced for Foolish long-term investors. Some think that because the company is sacrificing margins to shed its "Whole Paycheck" moniker, it will forever be lowering prices to match the competition.
Joe doesn't see it that way. After listening to the company's conference call, Joe thinks that instead of playing defense, Whole Foods is going on the offensive. First off, from a strictly organic standpoint, Whole Foods offers the best value out there -- its not lowering prices because others are offering lower-priced organics.
Instead, the move is an attempt to make organic food more affordable to buyers who would usually buy the conventional alternative. By taking this stance, Whole Foods is actually growing its potential market substantially.