Finding Great Deals in a Difficult Investing Environment
Greece is in the headlines again, China's growth is slowing, unemployment has seen an uptick in the United States, and Spain's banks have been bailed out -- yet it still hasn't produced a lasting market rally.
A barrage of such negative news is enough to keep just about anyone out of the markets. But as it turns out, now -- when sentiment runs the most bearish -- might be just the time to invest in high-quality companies with great economics in their favor.
Our Rising Stars manage real-money, real-time portfolios for you to watch for free. Over the past two weeks, they've made a number of moves to capitalize on deals the market is offering up. Below, I'll be sharing five of those deals with you, as well as a special free report at the end with access to some great dividend ideas.
SodaStream (NAS: SODA)
Having just bought a SodaStream machine for my house -- we're really enjoying it -- I can see why Alyce Lomax is so excited to buy shares now. Not only do the company's green leanings fit with Alyce's socially responsible framework for investing, but shares are trading at about half the price they were last year.
Said Alyce: "SodaStream's PEG ratio of 0.48 also signals an undervalued stock. This is a great bargain for a company that's not only increasing its profitability, but has also been increasing revenue at double-digit percentages for several years. In the past 12 months, SodaStream increased sales by 39.4% and increased per-share earnings by 55.1%."
Precision Drilling (NYS: PDS)
After years of running the Fool's Global Gains newsletter, Nathan Parmelee is now among the ranks of Rising Stars. One of the first picks for his real-money portfolio was Canada's largest oil and gas driller: Precision Drilling.
Nathan thinks the price is attractive, the balance sheet is strong, and -- most importantly -- the fundamentals are in place for the company to do well moving forward. "Precision's expertise in horizontal drilling for oil and gas, along with its ability to quickly move and redeploy rigs, bolsters the long-term demand for its rigs and services," he wrote.
Facebook (NAS: FB)
The 10-bagger team of Dave Meier and John Reeves has no problem bucking conventional wisdom when it comes to picking stocks. So while many analysts may be screaming to stay away from the post-IPO Facebook, these two are diving right in.
Where some see a naive CEO with no real business plan, these two see something different. Namely, they think Mark Zuckerberg's focus on the quality of the Facebook user experience is reminiscent of a younger Jeff Bezos, the founder of Amazon. They also think the company's cash flows are healthy and growing and will likely become more diversified in the years to come.
Alleghany (NYS: Y)
Matthew Argersinger and Paul Chi's Streetfighter portfolio recently picked up shares of Alleghany, a company which reminds them a lot of Warren Buffett's Berkshire Hathaway. The team likes to focus a lot on energy, so it might seem a little weird that they're buying an insurer in Alleghany.
The company, which collects premiums and then invests them before reimbursements are called in, has a great track record, yet is trading below book value. Some of the company's largest investments are energy companies, and this team believes that when energy prices pick up, so will Alleghany's investments, and its stock price.
Gulfmark Offshore (NYS: GLF)
Finally, Rising Star Jason Moser has gone back for seconds on one of his favorite stocks, Gulfmark Offshore. Jason doesn't parse words when explaining why he's so excited about this investment: "I believe there is a very long road of activity ahead in offshore exploration for oil and natural gas and Gulfmark Offshore is an excellent company that will play an integral part in getting it done."
Specifically, Jason believes deepwater drilling, despite some risks, will play an important role in meeting our energy needs in the future. Gulfmark, which has great management, a solid balance sheet, and one of the world's youngest and most geographically diverse fleets, stands to benefit as much as or more than other industry players if the deepwater thesis plays out.
Safe stocks for scary times
If the recent market downturn and turmoil both domestically and abroad have you worried about your portfolio, I suggest you take a look at our special free report "Secure Your Future With 9 Rock-Solid Dividend Stocks." With Treasury yields as low as they are now, dividends are definitely your best bet for steady income. Get the names of these nine companies today, absolutely free!
At the time this article was published Fool contributorBrian Stoffelowns shares of Amazon and Berkshire Hathaway. You can follow him on Twitter, where he goes byTMFStoffel.The Motley Fool owns shares of Gulfmark Offshore, Alleghany, Berkshire Hathaway, Facebook, Amazon.com, SodaStream, and Precision Drilling.Motley Fool newsletter serviceshave recommended buying shares of Berkshire Hathaway, Amazon.com, Alleghany, and SodaStream. The Motley Fool has adisclosure policy. We Fools may not 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.
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