Here at the Fool, we have positive opinions about lots of stocks, but it wouldn't be possible or practical to buy every single stock we like. However, there are some stocks that are especially intriguing right now. With that in mind, here are four stocks that our analysts are currently considering for their own portfolios.
Selena Maranjian: Hasbro (NASDAQ:HAS) is a stock that I've been keeping an eye on, aiming to add it to my portfolio one of these days. Brands can be powerful and valuable assets, and Hasbro has plenty of strong ones, such as Play-Doh, Monopoly, Magic: the Gathering, Littlest Pet Shop, My Little Pony, Nerf, and Transformers. It also has a hard-to-beat roster of partner brands, with which it has licensing agreements to produce toys and games. You may have heard of a few of these brands, such as Star Wars, Marvel, Sesame Street, Frozen, Jurassic Park, Disney Princess, Trolls, and more. The new Star Wars movie is likely to benefit Hasbro. Fully nine of the top 10 games in the U.S. are Hasbro titles, per NPD Group. These include Twister, Jenga, The Game of Life, and Battleship.
A key growth driver for the company is emerging markets, which generated 16% of revenue in 2014, with a three-year average annual revenue growth rate of 20%. Hasbro is free cash flow positive, with profit margins that have been rising in the past few years, including a net margin that recently topped 10%. That's rather appealing, reflecting increasing efficiency. One problem area for the company has been its Girls division, where revenue has been flagging.
The stock doesn't seem like a screaming bargain right now, which is why I'm waiting. It does offer a dividend yield near 2.5%, and that payout has nearly doubled during the past five years, but its P/E ratio of 22 and price-to-sales ratio of 2.3 are both well above its five-year averages. One reason the price seems fully valued to overvalued is because the company has been performing well, with revenue up 9% (after adjusting for currency translation) in the third quarter, while net income jumped 15%.
Jordan Wathen: Last November, a barrel of oil cost more than $70. Today, that same barrel is less than $50, and it may be years before prices recover.
I'm no petroleum engineer, but I do read bank conference-call transcripts. Everything I've read seems to indicate that the decline in oil could be just as bad for some lenders as it is for oil companies. As you might suspect, many of the projects banks financed when oil was $70-$100 per barrel aren't exactly profitable when oil can be had for as little as $50 per barrel.
Despite its exposure to energy, I'm keeping an eye on Texas-based Cullen/Frost Bankers (NYSE:CFR). The company boasts an excellent capital structure, funded almost entirely with deposits rather than more-expensive debt. In addition, it's proven its mettle as a risk manager, being the only one of the 10-largest Texas banks to survive the oil rout of the 1980s, and one of a handful to decline TARP money during the financial crisis.
It isn't perfect, of course. Loans to energy companies make up about 6% of its total assets. Of its energy loans, about 1% are past due, and it will likely get worse before it gets better. But this isn't Cullen/Frost's first rodeo, and I'd be happy to pick up shares if the market's jitters give the opportunity to buy it at a discount.
Cheryl Swanson: Paris-based Cellectis (NASDAQ:CLLS) is the latest contender in the high-stakes CAR-T trend in cancer R&D, and it's on my radar precisely because it's off the radar of most investors in the U.S. In addition, this company is a disruptor, meaning it has explosive potential. Finally, while this biotech is currently behind at least six other companies in CAR-T, its approach is so different, I wouldn't be surprised to see it finish first.
Adding a lot of credibility to Cellectis' approach is Pfizer's (NYSE:PFE) deep-pocketed involvement. Clearly, Pfizer sees a lot of potential in Cellectis' highly advanced process of gene editing, which doesn't require the use of the patients' T cells. Pfizer's big buy-in means billions in future payments to Cellectis -- assuming things go as planned, which, of course, is a huge risk. Under the deal, Pfizer will use Cellectis' technology to target 15 Pfizer-selected targets, while Cellectis picks 12 targets of its own. In exchange, Pfizer will pay $80 million upfront and as much as $185 million in milestone payments for each successful candidate, setting the maximum deal value at $2.8 billion.
Cellectis' CEO Andre Choulika recently said with cringeworthy French aplomb, "There was no gene editing before us; we are the leaders." While I'd take that with a whole tableful of French salt, Cellectis' "designer" immune cells could well represent a significant milestone. If you've got a taste for high risk/high reward healthcare stocks, this company is well worth monitoring closely.
Matt Frankel: One stock on my radar is Etsy (NASDAQ:ETSY), the online marketplace for buying and selling unique goods. The stock has fallen by about 71% since its IPO earlier this year, and declined by 20% in October alone.
The reason for this is worry about direct competition from Amazon.com and its new "Handmade" business. But although there's reason to worry -- Amazon has nearly 13 times the active buyers as Etsy -- I think the fears here may be overblown.
First of all, I don't think Amazon will be as successful in stealing Etsy's customers as people think. Unlike Etsy, Amazon is requiring goods that are handmade, and the fees charged to sellers are about four times higher. Amazon charges a 12% fee to sellers, as well as a $39.99 monthly fee for those who sell more than 40 items per month (waived until August 2016), whereas Etsy charges just 3.5% plus a $0.20 fee per item. This is a big difference, and one that I feel is being overlooked by the investing public.
Etsy isn't profitable yet, but it's growing at an impressive rate. The number of active buyers grew by nearly 25% in the past year, and revenue climbed by 38%. There's still a lot to be done, but at less than $9 per share, Etsy may be worth taking a chance on.
Cheryl Swanson owns shares of Amazon.com and Pfizer. Jordan Wathen has no position in any stocks mentioned. Matthew Frankel has no position in any stocks mentioned. Selena Maranjian owns shares of Amazon.com. The Motley Fool owns shares of and recommends Amazon.com and Hasbro. The Motley Fool owns shares of Etsy, Inc.. The Motley Fool recommends Cullen/Frost Bankers, Inc.. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.