3 Stocks I Bought During the Panic
At The Motley Fool, we're all about investors writing for investors, so I'm not just a commentator spouting off my opinions on the market while I sit on my hands. I'm an investor constantly on the lookout for opportunities to put my own money to work in the market.
It shouldn't be all that surprising, then, that over the past week I was pretty excited to pick up shares of some stocks that I've had my eye on. While The Fool's disclosure policy prevents me from talking about some of the buys I've made this week, here's a look at a few of the stocks that I've picked up since things started to get crazy.
Teva Pharmaceutical (NAS: TEVA) While many big pharmaceutical companies, like Pfizer (NYS: PFE) and Merck (NYS: MRK) , have been facing major concerns of late as they await the expiration of patents on some of their largest revenue generators, Teva finds itself in a very different situation. As the leading generic-drug maker, Teva actually benefits from the expiration of big pharma patents as it formulates cheaper alternatives.
The company is in a particularly good position as many different stakeholders in the U.S. health-care system look to lower costs. As my fellow Fool Jim Mueller put it a year ago in his 11 O'Clock Stock pitch: "[Teva] takes advantage of governments', insurers', and employers' desire to rein in some of the rising costs of health care by offering cheaper alternatives to many prescription drugs."
Investors are no fools (lowercase "f"), though, and Teva has traded at a premium valuation to the patent-focused drugmakers. When I took a look at the stock's valuation back in early June, I wasn't overly impressed, even though I liked the returns expectations enough to buy a small position. However, the stock's price has fallen more than 20% since then, and, all else equal, when the purchase price falls, the expected returns rise. I'm not convinced that the prospects for the business have changed drastically since June, so I was excited to be able to buy more of this quality name at a lower price.
Susquehanna Bancshares (NAS: SUSQ)
Regular readers of mine know that while I like to load up most of my portfolio with quality businesses at attractive prices, I also have a penchant for the ultracheap stocks of companies that may not be the cream of the crop. In my most recent dig through the bargain bin, Susquehanna popped up on my radar.
At the time, I said I believed that Susquehanna may just be "a not-so-bad bank at a very-bad-bank price." My view hasn't changed. Susquehanna may not have the same kind of brand or global reach as, say, Citigroup (NYS: C) , but it also doesn't have the same kind of could-be-a-nuclear-bomb balance sheet that Citi has.
Like the other beaten-down bargain stocks that I own, Susquehanna is a small position, but it's one that I was glad to be able to grab at a bargain-basement price.
Waste Management (NYS: WM)
Like Teva, Waste Management fits my general mold of buying quality companies when I can snap them up at attractive prices. The company is a nationwide leader in waste collection and recycling, a well-run giant in a stable industry that produces an attractive amount of cash flow and pays a nice dividend. As an added bonus, as my fellow Fool Alyce Lomax has pointed out, the company recognizes the importance of helping create a greener future.
The catch for me, however, was that I wasn't crazy about the price. Last month I wrote that I wasn't terribly impressed with my returns estimates for the stock: "As for me, it simply means that I'm going to stay on the sidelines, keep my eye on the stock, and hope that there's an opportunity to buy it at a lower price."
My patience paid off and I got that better price. Between the day I wrote that and this past Monday, Waste Management's stock fell 24%, which brought the stock's expected returns right into my wheelhouse. Not being someone who makes a habit of looking gift horses in their mouths, I jumped on the opportunity to buy.
Be ready for the right opportunities
As I wrote earlier this week, when stocks start swooning like they've done over the past week, you can only intelligently take advantage of the lower prices if you already have a collection of stocks on your radar that you've been following and are ready to pounce on. To put the stocks above on your watchlist, click the "+" next to the ticker. Don't have a watchlist yet? Click here to set one up for free.
At the time this article was published The Motley Fool owns shares of Teva Pharmaceutical Industries, Citigroup, and Waste Management. Motley Fool newsletter services have recommended buying shares of Teva Pharmaceutical Industries, Pfizer, and Waste Management. 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.Fool contributor Matt Koppenheffer owns shares of Susquehanna Bancshares, Waste Management, and Teva Pharmaceutical Industries, but does not have a financial interest in any of the other companies mentioned. You can check out what Matt is keeping an eye on by visiting his CAPS portfolio, or you can follow Matt on Twitter @KoppTheFool or Facebook. The Fool's disclosure policy prefers dividends over a sharp stick in the eye.
Copyright © 1995 - 2011 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.