3 Stocks to Buy Now From "The World's Greatest Growth Portfolio"
In January of 2012, I identified 13 stocks that would compromise an ideal growth portfolio. Since then, investors following along with me have turned $10,000 into $14,100 -- a 41% increase, and $1,190 better than if they had just invested the money in the S&P 500.
Every month, I look over these stocks to see which three are tempting. I call these my "Buy Now" stocks because I think they're pretty good deals. Read the chart below to see how the whole portfolio has performed, check out my best buys and, at the end, I'll offer up access to a special premium report on one of the 13 stocks included.
Core | ||||
|---|---|---|---|---|
Company | Allocation | Jan. 1st balance | Current balance | Change |
11.5% | $115.00 | $116.50 | 1.3% | |
11.5% | $115.00 | $141.80 | 23.3% | |
11.5% | $115.00 | $125.70 | 9.3% | |
11.5% | $115.00 | $130.18 | 13.2% | |
Tier One | ||||
7.5% | $75.25 | $90.60 | 20.4% | |
7.5% | $75.25 | $61.93 | -17.7% | |
7.5% | $75.25 | $78.41 | 4.2% | |
7.5% | $75.25 | $78.18 | 3.9% | |
Tier Two | ||||
5% | $50.00 | $65.45 | 30.9% | |
5% | $50.00 | $73.85 | 47.7% | |
5% | $50.00 | $49.30 | -1.4% | |
5% | $50.00 | $57.10 | 14.2% | |
5% | $50.00 | $53.45 | 6.9% | |
Year-to-date | $1,000.00 | $1,122.44 | 12.2% | |
Source: YCharts. As this is a growth portfolio, dividend reinvestment has not been included in calculations, either for individual stocks or the market return as a whole.
This month represented a high point for the portfolio in terms of its 41% return thus far. It also extended its lead over the S&P 500, which has returned 29.1% over the same time frame.
But that doesn't mean there aren't deals to be had. I believe, of the 13 stocks in the portfolio, the following three are good buys right now.
LinkedIn
A stock that's trading at 659 time earnings as a best buy? Really?
I know it sounds crazy, and I fully acknowledge that it's possible LinkedIn's stock could fall from its price today. But I don't think that fall would be permanent, and while it's possible the stock will take a further dip, its also just as possible that it won't.
LinkedIn's recent drop of about 15% since earnings were announced might not be the greatest short-term buy. But over the long run, LinkedIn has the potential to fundamentally change the way the human resource departments of companies the world over function.
With every individual that signs up with LinkedIn, a company has a higher incentive to use LinkedIn's Hiring Solutions. And with each company using hiring solutions, individuals have further incentive to sign up with LinkedIn. It's a virtuous cycle created by the network effect, and a look at LinkedIn's growth shows you that it's working.
Stratasys
Shares of Stratasys -- as well as fellow portfolio member 3D Systems -- had a volatile week last week. This didn't, however, have anything to do with specific fundamentals of either business.
Instead, it was because the lock-up period for a large number of shares to be sold on the market came to an end. The shares were a result of the Objet-Stratasys merger announced last year. While lots of people unloading their shares caused prices to drop (supply outweighs demand), this is a temporary issue.
Investors who believe in the potential of 3-D printing, and have the stomach for volatility, could scoop up shares of either Stratasys or 3D Systems; but, of the two, Stratasys is my favorite play for right now.
IPG Photonics
I already called IPG out as the stock to buy for the month of June. My reasoning was that Wall Street punished the fiber-optic laser-making company, but failed to see why IPG came up short on earnings.
Instead of having weak sales, margins were compressed. But they weren't compressed because IPG had higher input costs, or because it was in a pricing war. Instead, in an attempt to drive adoption of fiber-optic lasers -- which are more efficient than industry standard carbon-based lasers -- IPG gave its lasers away to new customers for discounted rates.
Although this may have hurt profitability in the short term, I think that, once customers get to see the utility of IPG's lasers, they will become lifelong customers who are willing to pay full price. Though shares are already up 15% since their post-earnings dip, I think IPG is a good buy today.
Disagree on which 3-D printer I picked?
It should be well understood that I like both Stratasys and 3D Systems. Right now, I just like Stratasys a little more -- mostly because it's not as focused on acquisitions to grow. But if you'd like to find out more about 3D Systems, The Motley Fool has compiled a premium research report on whether 3D Systems is a buy right now. In our report, we take a close look at 3D Systems' opportunities, risks, and critical factors for growth. You'll also find reasons to buy or sell the stock today. To start reading, simply click here now for instant access.
The article 3 Stocks to Buy Now From "The World's Greatest Growth Portfolio" originally appeared on Fool.com.
Fool contributor Brian Stoffel owns shares of Apple, Google, Amazon.com, LinkedIn, Starbucks, Baidu, Whole Foods Market, Lululemon Athletica, Intuitive Surgical, Westport Innovations, Stratasys, and IPG Photonics. The Motley Fool recommends 3D Systems, Amazon.com, Apple, Baidu, Google, Intuitive Surgical, IPG Photonics, LinkedIn, Lululemon Athletica, Starbucks, Stratasys, Westport Innovations, and Whole Foods Market. The Motley Fool owns shares of 3D Systems, Amazon.com, Apple, Baidu, Google, Intuitive Surgical, IPG Photonics, LinkedIn, Starbucks, Stratasys, Westport Innovations, and Whole Foods Market and has the following options: Short Jan 2014 $36 Calls on 3D Systems and Short Jan 2014 $20 Puts on 3D Systems. 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.
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