Serious Money: What's on your watch list?

Posted Dec 15th 2008 3:08PM by Sheldon Liber
Filed under: Market Matters, Johnson and Johnson (JNJ), Money and Finance Today, Novartis AG ADS (NVS), Tiffany and Co (TIF), NYSE Euronext (NYX), Serious Money, Intuitive Surgical Inc (ISRG), Burlington Northern Santa Fe (BNI), Boardwalk Partners (BWP)

There is a lot of money sitting on the sidelines waiting for the right time to get back into the stock market. Maybe that time will be after the Dow Jones Industrial Average tests 7000, or even 6000. Maybe it will be after quarterly reports start turning positive. I'm sure many people will not do anything until the housing market turns around. Then there are those that have sworn off the stock market or at least individual stocks entirely.

These and a multitude of other issues may be keeping you from investing for now and no one could blame you, but if it is your intention to get back in when the coast is clear then you should be making some preparations by putting together your watch list.

Here are some of the stocks on my watch list. I usually have about 20 stocks that I am interested in. Some of them I own already and I am interested in acquiring more. Some have appeared in my Chasing Value column, and some or all might appear there again.

Annaly Capital Management (NYSE: NLY) is one of the stocks mentioned in Fortune Magazines "Ten Promising Stocks for 2009" and is currently paying almost a 15% yield at Fridays closing price of $14.92. The company borrows money at short term rates and only invests in long-term Federally backed mortgages. They have avoided subprime loans and derivatives entirely.

Boardwalk Partners (NYSE: BWP) is expanding and was highlighted today as another high yield value stock Chasing Value: High yield thru Boardwalk's pipes that you can acquire for less than the price the general partners paid in October.

Burlington Northern Santa Fe (NYSE: BNI) can claim Berkshire Hathaway (NYSE: BRK.A) as it's largest shareholder and you can buy shares for less than 'my pal Warren' did.

Intuitive Surgical (NASDAQ: ISRG) is one of my top holdings and favorite companies. I have owned it for years and only selling some shares at $192. I recently started building a new position in a new portfolio in the past few months and I am interested in buying more. It closed at 134.38 on Friday.

Johnson and Johnson (NYSE: JNJ) is one of the other Stocks on Fortunes list and there is not much that has to be said as to why. It remains a Triple-A rated stock that is broadly owned and has bested most other stocks in a dismal year, although it is down. I own it at $42.50, a price I do not expect to see again, but if it falls much from its Friday close of $57.25 I could add some more shares. It is currently paying a very dependable 3.16% yield.

Novartis AG ADS (NYSE: NVS) has beaten most of the market this past year and might be a nice addition if you are interested in diversifying internationally. Like JNJ, this Swiss pharmaceutical giant is paying a dependable yield of 3.26% based on Fridays closing price of $47.06.

NYSE Euronext (NYSE: NYX) was the subject of a recent Barron's article along with several other exchanges and is worth watching as a valuable franchise that has simply been pulverized over the past two years. It closed Friday at $27.53. By any measure it seems dirt cheap. It has a 5.38% yield and is selling for less than book value. It was trading over $90 this year.

Tiffany and Co (NYSE: TIF) probably has the strongest brand of any stock on this list save JNJ, and it has gone into the bargain basement with all other retailers. I love the fact that you can buy into this 100-year-old brand at a 50% discount to what billionaire investor Nelson Peltz paid through the Trian Managment Fund, TIF's largest shareholder.

I am interested in all of these stocks and all of them may be great values today, although we can all agree few things are certain. However, since there are so many stocks and I have limited capital, the one I buy will be the one I think is more than a bargain it will be a steal!

So, what's on your watch list? Have you dipped your toe back into the market yet? If not, what would it take for you to get back in?

Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm. He writes the columns Chasing Value and Serious Money. Disclosure: I own shares of ISRG, JNJ and TIF.

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