Our Analysts Close Up Shop for the Year With These 5 Stocks
The first full calendar year of our Rising Star portfolios is coming to an end. The results for some of our best performers have been encouraging, as Alyce Lomax's socially responsible portfolio and Jason Moser's motley portfolio are beating the market by 10.4 and 4.6 percentage points, respectively.
Below, I'm highlighting five of the picks our analysts have made over the past two weeks. Add any of these companies to your watchlist, and you'll stay on top of all the latest news. Read to the end, and I'll offer you access to The Motley Fool's top stock for 2012.
Zipcar (NAS: ZIP)
Fool Dave Meier has many reasons to tap Zipcar for his Trends and Trades portfolio. For starters, he sees Zipcar following the same blueprint Netflix (NAS: NFLX) did a decade ago: "Rather than owning a movie, Netflix members pay a fee for access to one on DVD. Zipcar members, known as Zipsters, do the same with cars, paying a membership and a usage fee as well." Since you can't "stream" your car yet, the analogy need not extend to Netflix's recent blunders, either.
Dave is also excited about the partnerships the company has in place with Ford (NYS: F) to provide cars on college campuses. All in all, Dave believes that Zipcar could grow to have a $2 billion to $3 billion market cap in five years. That would represent an appreciation in price between 250% and 450%.
- Add Zipcar to My Watchlist.
TripAdvisor (NAS: TRIP)
A guru of special situations, Fool Jim Royal believes TripAdvisor offers investors a unique opportunity. Jim sees the spinoff of TripAdvisor from parent company Expedia as an excellent opportunity to cash in on two things.
First, spinoffs usually have a way of unlocking value. With TripAdvisor now free of its slower-growing parent, investors can get in on the real growth story. Additionally, Jim bought shares before the company joined the S&P 500, which caused massive amounts of shares to be purchased for index funds.
- Add TripAdvisor to My Watchlist.
Dillard's (NYS: DDS)
Rising Star Jim Mueller knows his picks won't win any beauty pageants, and that's just the way he likes it in his messed-up-expectations portfolio. That's why he has no problem calling on Dillard's, a brick-and-mortar retailer from Arkansas.
As Jim details, the company has done a great job of improving its metrics since flirting with bankruptcy during the height of the recession. It has expanded gross margins by 540 basis points, and where it was once losing 2.5% of its revenue two years ago, the company is now keeping 6.8% as profit today. That's a significant turnaround.
Better yet, the company's share buyback plan has reduced the number of shares outstanding by 30% -- which is music to shareholders' ears. In the end, Jim just doesn't think the market is showing enough respect for these moves.
- Add Dillard's to My Watchlist.
Dick's Sporting Goods (NYS: DKS)
Jim wasn't the only one focusing on retailers during the holiday season. Fellow Fool Jason Moser added shares of Dick's Sporting Goods to his portfolio as well. Jason sees three big reasons to buy shares at today's prices.
First, there's lots of room for growth, especially on the West Coast; the company plans on adding 400 stores in the coming years. Second, and along the same lines, Jason believes that the sporting goods market is huge and ripe for Dick's to take more market share. And finally, Jason loves how Dick's has given customers a unique experience by dividing up their store into many specialty stores that focus on different interests.
- Add Dick's Sporting Goods to My Watchlist.
Jones Lang LaSalle (NYS: JLL)
Our final Rising Star pick comes from Jeremy Myers, who picked commercial real estate company Jones Lang LaSalle. Jeremy is impressed with the company's global reach, as multinational corporations need to find specialists like JLL to set up offices on several continents. And what's more, they are able to offer individualized solutions to companies as consultants as well.
Jeremy thinks that as this cyclical industry continues to improve, JLL's bottom line will also. He sees shares are being worth as much as $80, which is 33% higher than where shares sit now.
- Add Jones Lang LaSalle to My Watchlist.
Our top pick for 2012
All five of these picks are worthy of your consideration -- and a spot on your watchlist. But if you'd like to find out about the Fool's consensus pick for the top performer in 2012, check out our newest special free report: "The Motley Fool's Top Stock for 2012." Inside the report, our analysts detail a company being called the "Costco of Latin America." I encourage you to get a copy of the report today; it's absolutely free!
At the time this article was published Fool analyst Brian Stoffel owns shares of Zipcar and Netflix. You can follow him on Twitter at @TMFStoffel.The Motley Fool owns shares of Jones Lang LaSalle, TripAdvisor, Dick's Sporting Goods, Zipcar, and Ford. Motley Fool newsletter services have recommended buying shares of Netflix, Jones Lang LaSalle, Zipcar, and Ford, as well as creating a synthetic long position in Ford. 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.