For the past 19 months, I've been doing my best to help the world invest better. Every month, I publicly call out a few stocks that I'm considering adding to my Roth IRA; on Friday, I'll let you know which stock made the cut.
So far, my monthly picks have returned 16%, slightly more than the S&P 500 return over the same time frame.
Read below to find out what five stocks I'm thinking about buying and why, and at the end I'll be offering up access to a special premium report that digs super-deep into the details of one of the companies I'm considering.
Baidu (NASDAQ: BIDU)
Fellow Fool Kevin Chen came out with a list of 25 scintillating facts about China's Internet potential, and although Baidu is only mentioned tangentially, the message is clear: Internet use is catching on in China. I think with a 80% market share and a blueprint for success -- in the form of American counterpart Google -- Baidu is well positioned to succeed.
Throw on top of that the fact that the company had 596,000 small and medium-size business partners at the end of the year -- with a potential market of 40 million -- and the fact that the stock is trading for just 13 times expected earnings, and you can see why I think the market’s being short-sighted here.
National Oilwell Varco
This is another ho-hum pick that I’ve already added twice to this portfolio in the past. NOV is something of a one-stop shop for any company looking to extract energy from the earth -- be it oil or natural gas. In much the same fashion that it was the shovel salesman -- and not the prospectors -- who made a fortune in the gold rush, NOV stands to benefit from our continued reliance on energy from the earth.
The aging fleet of deepwater rigs around the world aren't getting younger, and I expect repairs and new orders to keep NOV's backlog at a more than healthy level. As long as we drive cars with gas and use natural gas to heat our houses, NOV's products will be in demand. But with today's price, at just 10 times 2013's expected earnings, the market doesn't seem to agree with me.
Last week, I ran down three reasons that investors should be investigating shares of this engine maker right now. For starters, Cummins is spending money where it counts: on research and development. With emissions standards likely to get tighter for environmental reasons, this company is ahead of the curve in trying to develop technologies that reduce greenhouse gas emissions.
Furthermore, Cummins has developed a global presence, especially through joint ventures with companies in emerging markets like India, China, and Brazil.
Finally, it's a company you can feel good investing with, as our own team of analysts recently rated it as the best company in America. Though shares might look fairly valued now, I believe that over the long run, these three factors will benefit buy-to-hold investors.
Whole Foods has been proving naysayers wrong for years. Just as Cummins is going above and beyond government regulations to provide the most environmentally friendly engines possible, Whole Foods has taken healthy eating and environmental stewardship to heart.
Though the company scared investors by telling them that margins would be tighter for the rest of the year, Whole Foods still offers up organic food for cheaper than any other major grocer. Though shares might look pricey, one need only remember that the company has only built out one-third of its potential 1,000 stores in the United States.
Finally, we have LinkedIn. You might think I'm crazy for picking a stock that trades for 915 times earnings. Then again, that's what many thought when I bought shares of the stock last February. Since then, those shares have risen 93%!
With LinkedIn, my thesis is pretty simple. I believe that with three solid revenue streams, a model that is scalable, a leadership team that's been there from the start, and a business that could completely rework the human resources division of many companies, LinkedIn will simply be worth more than its current market cap of $19 billion 10 years from now.
But seriously, what's up with Baidu?
If the current weakness of Baidu's stock has you puzzled as well, you're not alone. Our premium report breaks down the dominant Chinese search provider's strengths and weaknesses. Just click here to access it now, and start getting some perspective on what the market might be thinking.
Copyright © 2009 The Motley Fool, LLC. All rights reserved.