The Stock I Bought, and the One I Wish I Had

Hindsight is 20/20, and nowhere is that more apparent than in the stock market. What looks like a great buy might have had some warning signs you missed, and what looks like a longshot can take off overnight.

Factor in the oft-cited but also oft-ignored "buy low, sell high" advice, and it's easy to overlook a great stock. Here are two stocks I've been following, both strong on international growth. I bought one of them, and wish I had bought the other.

A layover in Hamburg. An overnight flight to Sydney. Say what you will about the dying art of the local coffee shop, but I find few things more comforting than that green mermaid waiting for me upon my arrival. It is that most tempting of siren songs, and were there rocks between the kiosk and the gate, they would no doubt be strewn with weary travelers.

Clearly I'm not the only one who feels this way. Starbucks (NAS: SBUX) has become as ubiquitous to global travel as luggage and a neck pillow. Nowhere is that more apparent than China, where Starbucks is popping up faster than those little green houses on a Monopoly board. The company opened locations in five new cities (bringing the total to 41) and its 500th store, in the last quarter.

Unlike Tim Hortons (NYS: THI) , whose rapid growth overseas concerned me in light of their problems at home, Starbucks seems to have managed the art of controlled growth. Earnings are up 10% for the first quarter, revenue and total assets have grown year over year for the past five. Sure, the company will continue to battle rising commodity costs, but so will its competitors, which will keep the playing field level. With key new partnerships in India and China, Starbucks' reach will only continue to expand.

Starbucks had troubles with overexpansion in the past, and when former CEO Howard Schultz returned in 2008, it was amidst a troubled economy and an oversaturated market, and he immediately closed droves of Starbucks stores in the U.S. He'll have to guard carefully against over-caffeinating the world stage. But this is a man who literally wrote a book on how Starbucks learned from its mistakes. Let's hope he learned from that one.

This past holiday season, luxury spending was up, while mid- and lower-market retail continued to lag. One company thriving in the down economy was Coach (NYS: COH) .

There are a number of reasons for Coach's continued success; it has grown revenue year over year, its operating margins are at 30%, it has nearly $1 billion in free cash flow, and only $23 million of debt in the most recent quarter. Annual revenue for TTM was nearly $4.5 billion.

Building on these strong operating efficiencies, Coach enters 2012 poised to excel overseas. In the last fiscal year, Coach assumed direct control of its retail businesses in Malaysia and Singapore. And the company now has a non-controlling interest to expand its international business in Europe. Last year, it also opened new retail locations in Spain, Portugal and the UK. "Travel retail" sales (i.e. airports) also account for a large portion of Coach International's revenue.

Both Coach and Starbucks are Stock Advisor picks (by Tom and David, respectively). Both have strong, long-standing leadership; Coach CEO Lew Frankfort has been with the company for thirty years and grew it from a $6 million cottage industry to a global powerhouse. Since his return, Schultz has brought Starbucks back from the brink.

I've given both stocks a thumbs-up in CAPs. Ultimately, I bought stock in Starbucks. It's a great stock, and one I plan to hold long-term. I'm keeping my eye on Coach and think it might become part of my portfolio in the near future. Why do I wish I had bought it? Had I paid attention to fellow Fools when they first started talking about Coach a few months back, I would have done quite well; its stock price is up more than 50% since August and all indications are the company will continue to thrive.

I overlooked Coach because it wasn't a company whose products I use. I ignored Tom Gardner's recommendation, and I missed out. But you don't have to. See what Gardner is recommending this month by trying a free, 30-day trial of Stock Advisor, or any of our newsletter services.

Have a stock you wish you had purchased? Tell me about it below.

At the time thisarticle was published Molly McCluskey owns shares of Starbucks but still can't get free refills. The Motley Fool owns shares of Coach and Starbucks.Motley Fool newsletter serviceshave recommended buying shares of Starbucks, Coach, and Tim Hortons. Try any of our Foolish newsletter servicesfree for 30 days. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.

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