3 "Buy Now" Stocks From the World's Greatest Retirement Portfolio

Updated

It's been 16 months since I introduced the World's Greatest Retirement Portfolio to Foolish readers. This was, has been, and will continue to be my way of helping the world to invest better. Putting my money where my mouth is, I pledged to put at least $4,000 behind each stock and attempt to hold each one for at least three years -- though I've already broken that promise.

Since I began, the market has returned 12.9%, not bad at all by historical measures. But this portfolio has lived up to its moniker as the "World's Greatest," far outperforming the broader market.

Below, I'll show you why it's doing so well, offer up three stocks that I think are excellent buys right now, and offer access to a premium report that offers deeper analysis than I can cover in one article.

Company

Publication Date

Change

vs. S&P 500

Google

June 26, 2011

56.2%

41%

PriceSmart

June 28, 2011

49.8%

36%

Baidu (Nasdaq: BIDU)

Sept. 15, 2012

5.5%*

(7%)*

Intuitive Surgical (Nasdaq: ISRG)

July 25, 2011

23.6%

13%

National Oilwell Varco (NYSE: NOV)

July 28, 2011

(0.5%)

(14%)

Coca-Cola (NYSE: KO)

June 21, 2011

18.5%

4%

Whole Foods Market

July 5, 2011

53.8%

43%

Amazon.com

July 12, 2011

20.3%

8%

Apple (Nasdaq: AAPL)

June 30, 2011

99.5%

88%

Johnson & Johnson

Aug. 1, 2011

11.9%

(3%)

Total

33.9%

20.9%

Source: Fool.com, all returns as of market open, Oct. 1, 2012. *Returns are for position in ATVI held from July 15, 2011, to Sept. 9, 2012, and transferred over to BIDU on Sept. 15, 2012.

An investment in the S&P 500 would have yielded a profit of $5,160 so far. But an investment in the companies indicated above has far outpaced such returns, with a return of $13,560.

One of the big movers over the past month was Google. Though there was no earth-shattering news coming from the company, I've said before that I thought shares were cheap. Throw in there the fact that its map applications are far superior to Apple's, and that its Google Play initiative is off to a smashing start, and you've got a stock that's up 10% since Labor Day.

Looking ahead, a number of companies in the portfolio will be reporting earnings in October. Below are those companies, the dates of their releases, and what analysts are expecting.

Company

Earnings Date

EPS Estimate

Revenue Estimate

Google

Oct. 10

$10.57

$11.9 billion

Apple

Oct. 15

$8.88

$36.3 billion

Johnson & Johnson

Oct. 16

$1.21

$16.9 billion

Coca-Cola

Oct. 16

$0.50

$12.4 billion

Intuitive Surgical

Oct. 16

$3.50

$535 million

Amazon

Oct. 22

($0.08)

$13.9 billion

Baidu

Oct. 24

$1.29

$1.0 billion

National Oilwell

Oct. 25

$1.51

$5.4 billion

Sources: Thompson Reuters, E*TRADE.

Best buys right now
All three of the companies on my list of best buys for your money right now will be reporting earnings this month. First on the list is China's leading search engine, Baidu. The basics of my investment thesis are pretty simple: Chinese residents seem to be taking to the Internet in growing numbers. As that happens, more people visit Baidu, and advertisers are more willing to pay for targeted ads.

Over the past month, the company's stock has been held in check over fears of it losing market share to rival Qihoo 360. While I won't deny this threat could actually materialize, I think it's a more Sisyphean task to unseat a leader like Baidu than the market does. Given today's P/E of 29, with earnings growth of 34% expected in 2013, I think it is a compelling buy.

Second on my list is a company I recently pledged to buy for my Roth IRA: Intuitive Surgical. The company's da Vinci Surgical System is becoming more and more commonplace in hospitals for performing both hysterectomies and prostatectomies. It also has registered 58% of its revenue from recurring sources -- meaning that it's not totally reliant upon selling more da Vinci machines.

Today, shares trade hands for 35 times earnings. That's not cheap, but with doctors experimenting to see if the machine can be used in urology, lobectomies, and head and neck procedures, I think it will someday be worth more than the $20 billion market cap it has today.

Finally, we have Apple. Yes, it seems like the world's most valuable company ever keeps growing, but keep this in mind: Relative to its earnings, it's still awfully cheap. Though there's mixed news on iPhone 5 sales, analysts expect the company to grow earnings by 20% in 2013, and yet shares are still trading hands at just 13 times free cash flow.

If you're looking for further guidance on Apple, with its earnings date rapidly approaching, I'd suggest getting a copy of the premium report on Apple we recently compiled. As a free bonus, Fool analyst Evan Niu has recently updated it with new research on the iPhone 5. Sign up today and you'll get the initial report plus the iPhone 5 research and a year's worth of free updates. Click here to get started now.

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