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.
The Biggest Threat to America
After you beef up the difficulty of your online passwords, you might want to consider adding Check Point Software Technologies (NAS: CHKP) to your portfolio to take advantage of the increasing need for cybersecurity. Fool analyst Dan Dzombak reports that Check Point "uses a razor-and-blades model, selling standardized security appliances (the 'razor') with customizable software add-ons that cost extra (the 'blades')." He adds: "This model has led to 16% annual revenue growth since its introduction three years ago. It has also been very profitable for the company, as net income has grown 22% annually over the same time period."
Dan also likes that the company has a market cap of $11 billion, nearly $800 million free cash flow, no debt, and $3 billion in cash and bonds on its balance sheet.
Read the article for more insight on profiting from cybersecurity.
4 Easy Steps to a Strong Investing Plan
Want a little help getting your feet under you in the market? Then check out these four steps brought to you by Fool analyst Dan Caplinger.
- Know your goals
- Know your temperament.
- Make contingency plans.
- Grade yourself.
"If you try to invest in a way that doesn't fit with your temperament, you may well sabotage your long-term results," Dan noted in discussing step No. 2. For instance, if you like volatility, the "slow but (usually) steady long-term success" of stocks such as 3M (NYS: MMM) may be too boring for you, Dan wrote, even though the conglomerate with thousands of products, including household favorites such as Nexcare and Scotch, has "continued its tradition of innovation."
But investors shouldn't get too comfortable with what seems to be working for them. "For instance, in the early and mid-2000s, many dividend investors turned to Bank of America (NYS: BAC) , US Bancorp, and other strong-yielding bank stocks as ways to generate what appeared to be safe, dependable income," Dan wrote. The financial crisis whacked many bank dividends, and "if your plan wasn't flexible enough to let you consider alternatives until the worst of the crisis had hit, it was too late to do anything to protect yourself."
Read the article to learn more about these four easy steps to a strong investing plan.
How to Pick a Great Restaurant Stock
When choosing a restaurant to eat at, you consider things such as the quality of the food, the prices, and the location. Fool analyst John Maxfield says that when it comes to reviewing restaurant stocks, it's all about earnings. "Here's the reason earnings are so central: When you buy a stock, whether it's a restaurant stock or any other stock for that matter, you're staking a claim in the underlying company's present and future income," John wrote.
Digging into Arcos Dorados (NYS: ARCO) , the largest McDonald's operator in Latin America, John finds intriguing quarterly numbers such as earnings per share of $0.06, total revenue growth of 15.5% on a constant currency basis, and same-store sales growth of 10.4%. Over at Fool favorite Buffalo Wild Wings (NAS: BWLD) , the books show $60 million in cash and effectively no debt, John reported. Looking at debt loads can help you gauge the reliability of a restaurant company's earnings.
Read the article to learn more about judging restaurant stocks and to get a look at the chart John has put together to help you figure out what's what.
For a little more help figuring out what's what, get access to the free Motley Fool report "Middle-Class Millionaire-Makers: 3 Stocks Wall Street's Too Rich to Notice." Inside there's a look at three Peter Lynch-inspired buy-what-you-know stocks for the 99%.
The article The Motley Fool's Weekly Editors' Picks originally appeared on Fool.com.Fool online editor Kris Eddy owns no shares of any stocks mentioned in this article. The Motley Fool owns shares of Arcos Dorados Holding, Check Point Software Technologies, Bank of America, McDonald's, and Buffalo Wild Wings.Motley Fool newsletter serviceshave recommended buying shares of Check Point Software Technologies, McDonald's, 3M, and Buffalo Wild Wings, writing covered calls on Buffalo Wild Wings, and creating a diagonal call position in 3M. 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. The Motley Fool has adisclosure policy.
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