The Motley Portfolio's 3 New Best Buys Now
It’s that time again Fools; I give you my three best buys for your money today. Remember these are stocks that must come from my TMF Real Money Portfolio. You can see all the holdings right here:
Halliburton (NYSE: HAL)
You’ll recall that I gave Halliburton the nod back on September 16 in my first installment here:
Nothing has really changed from that point other than the company recently released earnings and I think it continues to present a compelling value today for what is clearly a major market leader in energy. Oil rig count continues to rise while natural gas rig count continues to fall thanks to low gas prices. In fact US land rig count saw a net decrease of 68 rigs overall with oil directed rig count actually going up by 44. This is a good example of why I like this company so much: it has options. It is not fully-tied to an oil versus natural gas showdown because it does both. Guar cost inflation is working its way through the income statement but the good news is that we should see some tailwinds from this going into 2013, so patience will be rewarded here. Until then we’ve an energy leader trading at 11 times earnings with an awesome balance sheet and while it’s a close one, the stock is still beating the market. I’m calling Halliburton my conviction buy this week.
Original write-up: http://www.fool.com/investing/general/2012/03/21/seriously-this-natural-gas-and-oil-stock-is-a-stea.aspx?source=irnsitlnk0000001
Starbucks (Nasdaq: SBUX)
I’ve a feeling we’re going to see some tough times for some of these consumer facing names and the cream will rise to the top. Of course that won’t prevent the market from over-reacting should there be an earnings miss or two and Starbucks does announce earnings on November 1st. That said, these guys have a lot going on right now and the price is a bit more pessimistic than I believe is fair. The Verismo machine is now out and is expecting a warm response this holiday season. The company has just opened its first store in India and intends to “earn the respect of the Indian consumer” as ceo Howard Schultz put it with a menu focused not only on Starbucks’ specialties but also integrating the local tastes into the menu; a crucial move I think that will not only earn more acceptance but also open the door for more potential offerings bringing in more Indian consumers. The stock trades now for 25 times earnings which is a steal I think for a real quality company. Both of my Starbucks positions are beating the market and if for some reason the stock tanks after earnings, don’t be surprised to see Starbucks back on this list again.
Original write-up I: http://www.fool.com/investing/general/2011/02/14/rising-star-buy-starbucks.aspx?source=irnsitlnk0000001
Original write-up II: http://www.fool.com/investing/general/2012/08/06/1-stock-to-take-advantage-of-mr-markets-pessimism.aspx?source=irnsitlnk0000001
Ecolab (NYSE: ECL)
It’s been almost a full year since I added Ecolab to the portfolio and I’m thrilled with its performance to date. While it seemingly does a lot of things, it does them well and continues to gain market share as the leader in products and services for the hospitality, food-service, health-care, and industrial markets the world over. Cleaning and sanitizing products and programs, pest elimination products, and maintenance and repair services are just a few of the things Ecolab is known for. The Nalco acquisition is being integrated nicely into the business and it recently just agreed to sell its automotive products division, Ecolab Vehicle Care to Zep for $120 million. This puts the deal at about 2 times sales and close to 10 times earnings. To date Ecolab is up 24.5% and beating the market by 10.75 points. The stock trades today at about 20 times normalized earnings; Ecolab announces earnings on October 30th.
Original write-up: http://www.fool.com/investing/general/2011/11/14/this-is-a-buffett-investment-if-ive-ever-seen-one.aspx?source=irnsitlnk0000001