The Motley Fool's Weekly Editors' Picks
Fools were out and about this past week in an investing world jam-packed with actions and ideas. Here are three articles you might find useful as you decide how to invest your money.
Should You Buy the Dow's Cash Kings?Investors like companies with lots of cash, but it's not as simple an equation as it might seem. You also want the company to be doing smart things with the cash and making more cash to replenish what it spends, notes Fool analyst Dan Caplinger.
Weeding out financial institutions, Dan reports that technology company Cisco (NAS: CSCO) comes in near the top of the cash list, with almost $47 billion of cash and short-term investments. But some question how smart Cisco has been in using its money. For instance, many frown upon the company's ill-fated $590 million purchase of Flip Video maker Pure Digital Technologies and its recently announced $5 billion deal to buy NDS, which has software solutions in the pay-TV space.
One stock that produces solid free cash flow is Pfizer (NYS: PFE) , but that doesn't make it a no-brainer buy, according to Dan. "Pfizer has to deal with the constant churn of drugs going off patent, forcing it to find replacements to keep the cash coming in," Dan wrote.
Read the article for more insight on companies and their cash.
Who Are the Next Groundbreakers?"Any company that can make consumers' lives easier -- and beat its competitors to the hassle-relieving punch -- has the ability to return huge profits to shareholders." So says Fool analyst Dan Newman. He turns readers' attention to the successes of Netflix, which eliminates the aggravation of late fees, and Zipcar, which does away with waiting in line to rent a car.
One place to look for the next groundbreakers is among companies that solve the hassle of physical pain. Dan brings MAKO Surgical (NAS: MAKO) into the light. "The company has moved beyond knee surgeries to even more lucrative hip surgeries, with analysts expecting it to become profitable in one to two years without needing to issue more shares or take on more debt," Dan wrote.
Read the article for more ideas on how to find the next groundbreaking companies. To learn more about MAKO Surgical as an investment, read The Motley Fool free special report "Discover the Next Rule-Breaking Multibagger."
3 Stocks for 1 Big Energy TrendFool analyst John Reeves goes beyond the obvious to find companies profiting in the oil and gas sector by being part of the "digital oil field," which consists of technology that helps oil and gas companies process huge amounts of data to assist them in figuring out how best to get the resources out of the ground and to consumers.
Schlumberger (NYS: SLB) and EMC (NYS: EMC) are two companies (at least) knee-deep in the digital oil field. John reports that EMC provides services to more than 95% of the oil and gas companies on the Forbes Global 2000. EMC helps oil and gas companies store, analyze, and act on their data.
Meanwhile, "it seems clear to me that Schlumberger's efforts in this area will be richly rewarded in an environment of increasing demand and rising energy prices," John wrote. "The company, which has been able to deliver outstanding returns on capital in recent years, seems like a very attractive stock idea right now." Schlumberger even pays a dividend, yielding 1.6% currently.
Read the article to learn more about profiting from the digital oil field.
Dividend stocks are a good foundation on which to build your portfolio. To get started, read the Fool's special free report "Secure Your Future With 9 Rock-Solid Dividend Stocks."
At the time this article was published Fool online editor Kris Eddy owns no shares of any stocks mentioned in this article. The Motley Fool owns shares of MAKO Surgical, Cisco Systems, EMC, and Zipcar.Motley Fool newsletter serviceshave recommended buying shares of MAKO Surgical, Pfizer, Netflix, Zipcar, and Schlumberger. The Motley Fool has adisclosure policy. We Fools don't all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. Try any of our Foolish newsletter servicesfree for 30 days.
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