Looking for stocks to add to your list of potential buys? In this segment of Backstage Pass, recorded on Dec. 13, Fool.com contributors Jason Hall, Rachel Warren, and Toby Bordelon discuss the top stocks on their watchlist as they enter 2022.
Jason Hall: Rachel?
Rachel Warren: Yes.
Jason Hall: What stock do you plan to buy before the end of the year?
Rachel Warren: See, this is a great question, but I’m not sure in the next two weeks, I’m going to be buying any stocks because I keep talking about the [laughs] stocks I want to buy. But I do have an eye on some companies. I’m going to list off a few that I’m watching that I’ll probably buy maybe in the break period, when I’m not talking.
Jason Hall: You probably won’t be buying them this week before Thursday?
Rachel Warren: Probably not this week, no. [laughs] But Intuitive Surgical (NASDAQ:ISRG) is one, great medical devices stock, exceptional track record of growth, market dominator in the surgical robotics industry.
Vertex Pharmaceuticals, not as well-known a healthcare stock. The company leads the cystic fibrosis healthcare space. Essentially they’re the leading presence in the therapeutics market for cystic fibrosis. Really like the business.
Pfizer is one I’ve been watching for a long time, love its dividend, like where the company is going, but haven’t yet invested.
Chewy is one we’ve been talking about a lot recently, and I like the company and I’m becoming increasingly interested. A favorite I’ve mentioned often is Airbnb. [laughs] That’s the last one.
Jason Hall: If you don’t mind, Rachel, if you could mind hopping over to Slido and throw those tickers in there, I know some Fools watching who are going to want to be able to see them, that’d be awesome.
Rachel Warren: Totally.
Jason Hall: Toby, how about you?
Toby Bordelon: Look, I’m like Rachel. I don’t know that I’m going to buy in the next two week, and part of that was because of the restrictions we have. I just don’t think I can get it done before the end of the year.
There are certainly some things I’m considering, though honestly Jason, a lot of them, I don’t know that it’s going to matter if I buy them now or I buy them in June.
That’s how I am with something I think about, but I will give you one, just for fun. I am 99.9% sure I’ll be buying DermTech on Friday. I have some written points that are so far in the money right now.
Jason Hall: They are being put to you basically.
Toby Bordelon: They are, right. Borrowing some miraculous recovery in the next few days, a few more shares in my portfolio, so that’s fine.
I remind myself that at the time, which was only a couple of months ago, this seemed like a fantastic price. Now we get it, yay, isn’t that fun? [laughs]
Jason Hall: Yeah, funny with DermTech, it’s a really interesting business, there’s patch that they do. For folks who don’t know, it’s a diagnostic business. It’s for skin cancer diagnostics. It looks great. It’s supposed to be cheaper than biopsies.
You don’t have to get cut open and stitched closed. There are so many things that seem better, but the company is really struggling to get dermatologists to adopt it. That’s the thing. That’s one of the stock’s come down.
Toby Bordelon: Yeah, exactly. Concerns about whether that growth is going to materialize to what’s going on here.
Jason Hall: Here is a stock that I’m hoping to buy. Barring restrictions allowing me to buy before the end of the year is Zoom. I think the current valuation Zoom is a great value. It trades for a cheaper valuation than Microsoft, it’s growing in a much higher rate, it actually has better operating margins and profitability.
They’re really becoming dominant in that unified telecommunications services. They are a leader in that quadrant, according to Gartner, in Gartner’s Magic Quadrants, they’re now and that leader bracket, and I think it’s really important. I really want to buy the business and I want to tout another business that I bought just last week.
Finally, I’ve gotten to really where I wanted to be and that’s Lemonade. I’ve been wanting to buy for a while and the price has come down substantially. Trades for about three times book value. I think for its prospects, the direction that it’s growing, the potential, I think three times book value is a pretty good price for Lemonade’s potential. I’m happy to have paid it.
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.