A Blended Portfolio: Top 5 Stock Picks for Diversification This Summer

by: Holly Thompson

As sure as the summer months are for vacations to rejuvenate the mind and soul, they are also for the savvy investor to rejuvenate his portfolio.

We have seen the markets slow down and turn sluggish this past May and forecast that the lazy months of June, July and August will take a break from the great gains of earlier this year. This is the time to make changes to our holdings and prepare our portfolios to reap the gains of the latter half of 2011.

In almost every sector you can find a winner - a great company, with a great business model on the verge of moving ahead of its competition by leaps and bounds. I have gathered a list of five companies that fit such criteria. All are a good fit for any diversified portfolio.

Priceline.com Inc. (NASDAQ:PCLN) is on our list for a Services company that has seen extraordinary gains in the past year with more room to grow. Priceline offers various travel services, including airline tickets, hotel rooms, car rentals, vacation packages, reservation services and much more. This is “THE” mecca for the price-conscious traveler with and arm’s length itinerary. The company’s gross travel bookings were up 57.3 percent year/year, where international gross bookings grew by 79 percent year/year. Not too shabby for a slow moving economy. Looking forward, Priceline President and CEO Boyd said,

Globally, we intend to retain our focus on extending our reach in established and new geographic markets and providing an outstanding consumer experience to build the strength of our brands.

Polypore International Inc. (NYSE:PPO) is our Industrial play that develops, manufactures and markets micro-porous membranes used in separation and filtration processes. The Energy Storage segment offers membranes that separate the cathode and anode in applications, including lithium batteries and lead-acid batteries. The Separations Media segment provides membranes that are used as high technology filtration element in various medical and industrial applications. Sales for the Energy Storage unit were up 35 percent year/year while sales for the Separation Media unit were up 12 percent year/year. Robert Toth, President and CEO, noted:

We are at the front end of long-term secular trends associated with mobile power and purity as it relates to high performance filtration. Our first quarter performance highlights the substantial growth potential associated with these trends and the strong demand affirms our confidence in the investments we've approved to date.

Polypore is the best when it comes down to their rank within the chemicals specialty group.

Altera Corporation (NASDAQ:ALTR) is a leading supplier of programmable semiconductors and related products that mainly serves customers in the telecom and wireless, industrial automation, military, networking and computer storage sectors. With a market cap of 15.18B, this Tech company has a profit margin of 40.89 percent with a return on equity of 43.56 percent. Altera’s first quarter results blew away 2010’s with sales up 33 percent year/year. According to John Daane, President/CEO/Chairman of the Board, Altera’s 40-nm based products are now entering the best part of their growth phase which ensures its investors of the company’s continuing progress upwards. Altera also offers a nice bonus, a $.24 a share yearly dividend for its share owners.

Carbo Ceramics Inc. (NYSE:CRR) is a fantastic player for the Oil and Gas industry. This company manufactures and supplies ceramic proppants primarily used in the fracturing process of natural gas and oil wells in the U.S. and internationally. With a market cap of 3.48B, they are more than your little start-up. Revenues last quarter were up 22 percent year/year, showing the commitment the U.S. has to providing jobs and sustainability in our own back yard. President and CEO Gary Kolstad commented:

CARBO is off to a good start in 2011, achieving the best quarter in the Company's history. Our technical marketing strategy continues to have a positive impact on increased well production and enhanced recovery. A clear result of this strategy is the continuing demand for ceramic proppant in both natural gas and liquids-rich resource plays, such as the Haynesville, Eagle Ford, Colony Wash, Permian, and the Bakken. Clients throughout the oil and gas industry turn to CARBO to meet their proppant demands, and we remain committed to growing our proppant franchise.

Carbo Ceramics also offers a yearly dividend of $.80 a share.

VMWare, Inc. (NYSE:VMW) is a great Tech play within the computer software group. This is a much different business than our tech pick Altera. VMWare provides virtualization infrastructure software solutions and related support and services primarily in the U.S. This company has been on fire for quite some time now. Recently VMWare reported revenues for the first quarter were up 33 percent year/year.

"The quarter's strong performance underscores the value that VMware is providing customers on their journey to cloud computing," said Paul Maritz, CEO. "Customers continue to invest in our portfolio of virtualization and cloud infrastructure solutions to remove complexity and enable IT as a Service."

The company has not only focused on products and customer satisfaction but have been on a buying spree acquiring businesses to help them grow in a direction that will bring unbelievable benefits in all areas of their business.

Remember that the lazy months of summer are typically slow moving and we don’t see much action in the markets during that period. Add, some great companies to your portfolio, stick to your long-term goals and sit back and wait for the rewards to come to you.

Disclosure: I am long PCLN, PPO, ALTR, CRR, VMW.