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Roundtable: 1 Stock to Buy in March

Friday - 3/8/2013, 6:30am  ET

We asked 10 of our top analysts for one stock that looks especially compelling right now. Here are the companies they singled out.

Jim Gillies: Three things I want to see in a great retail stock: outstanding management, a repeatable business, and a timeless brand. Coach  scores three for three. Long-term management, led by CEO Lew Frankfort has built a reputation for high quality and lifetime customer satisfaction, both of which lead to repeat purchases. For women's handbags, that can cost hundreds of dollars; this positively screams brand strength

Since its 2000 IPO, the stock has risen nearly twentyfold on the back of business execution that has delivered increasing profitability, strong returns on capital, cash generation, and successful business growth. The store base has grown nearly 10% annually. The dividend, introduced in 2009, has quadrupled since its debut (and will probably rise again in 2013). Strategic share repurchases have reduced the share count by more than 20% over the past half-decade. And Coach has done all this leverage-free, and boasts $936 million cash on the balance sheet.

Frankfort is stepping up to the Chairman's seat, with the architect of the company's successful foray into the Asian luxury goods market taking the CEO reins. While I believe this transition will prove seamless, concern over the move, plus the company's own admission that 2013 will be an "investment year" has spooked shareholders. That's put Coach in the bargain bin -- but don't expect it to stay there long. The stock today is worth at least $60, even assuming muted growth going forward. Continuing their long-demonstrated excellent performance could see the stock double over the next five years.

Taylor Muckerman: Adding valuable assets through acquisitions has become a competitive advantage for Kinder Morgan over the last couple of years. This strength has led to its midstream family compiling the largest pipeline system in North America. Why is this important? Because there remains a supreme shortage in the distribution network for the crude oil and natural gas that is currently pumping out of our ground at record levels.

That's why I am focusing on Kinder Morgan Energy Partners , the Master Limited Partnership that resides under the KMI roof. Just like its parent, it recognizes that growing its asset base will be key in the coming years. Realizing this, it decided to acquire strategically located Copano Energy, a deal scheduled to close during the third quarter of this year and be immediately accretive.

Operating in multiple key areas of production -- most notably the Eagle Ford, Woodford, and Barnett shales -- Copano's natural gas gathering and processing assets position KMP to capitalize, once natural gas prices begin to rise, leading to an uptick in production. Until that time comes -- an inevitability in my opinion -- the company's steadily growing distributions should satisfy investors' appetites for immediate income.

Anders Bylund: Rackspace Hosting is an easy choice for new money in March.

I bought shares myself near the end of February. The cloud computing veteran is chock-full of future prospects, but the stock has been saddled recently with high prices. Irrational selling on the heels of a perfectly fine earnings report added serious value to Rackspace's 19% annual earnings growth and rock-solid balance sheet.

The OpenStack cloud computing platform has emerged as a serious selling point for Rackspace's services. Moreover, it positions the company as a major provider of software solutions and support services for other players in the online services sector.

Fellow Fool John Del Vecchio worries that Rackspace's big capital expenses would destroy any serious investing thesis, but I must respectfully disagree. The company is investing heavily into its infrastructure in order to support sustained order growth for the next decade-plus. It's exactly the right thing to do, and the payoff will start to materialize later this year.

And right now, you can buy into this exciting growth stock at a 20% short-term discount. What's not to love about that?

Rich Smith: United Technologies  caught a lot of flak earlier this month, first, over reports that an engine blade produced for the Lockheed Martin F-35 Joint Strike Fighter had developed a crack, and later, over the company's admission that one of its units (Carmel Forge, located in Israel), has been caught falsifying test results on the integrity of engine parts. Yet, UTC's share price keeps going up. Why?

Because headline risk notwithstanding, the stock's a bargain -- and a good stock to buy in March. The stock costs only 16.2 times earnings, and is even cheaper valued on free cash flow. UTC is pegged for 13.6% long-term growth, and pays a 2.4% dividend. It's just notched some significant sales in its Sikorsky segment, bolstering the case for sales growth, and is busily shedding underperforming divisions to focus on its most profitable businesses.

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