Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of generator maker Best China Stocks 2012 -Generac (NYSE: GNRC ) have plunged today, down by 14% at the low, after reporting fourth-quarter earnings this morning.
So what: Revenue rose by two-thirds to $267.3 million, but bottom-line net income of $267.1 million isn't as rosy as it sounds. Generac saw a $238 million income tax benefit resulting from the reversal of some accounting charges related to its brand transition. Adjusted net income was $51.8 million.
Now what: Residential product sales jumped by 67.6% and Generac closed its acquisition of Magnum Products. CEO Aaron Jagdfeld said the company is pleased with the initial progress of the acquisition since Magnum's financial results have come in better than expected. Jagdfeld is "particularly excited" about cross-selling opportunities that the combined company can now offer, and said the acquisition should be an "attractive use of shareholder capital."
Best Stocks For 2012 - Don’t Put Any Stock in Denim
Jeans. Long ago, this word evoked the most pedestrian of images — blue, rugged, simple, cheap. But over the past few decades (and a few million acid washes and knee holes later), jeans became the stuff of high fashion, selling for exorbitant prices.
So it’s logical to think that the premier makers of high-end denim should be minting money, right? Well, not exactly. While jeans have demonstrated staying power as a fashion statement, some of the biggest names in denim are far from a long-term lock as an investment.
Guess increased sex appeal in its ads to improve popularity. It diversified both its offerings, adding accessories and perfume, and its finances — Guess’ revenues outside the U.S. and Canada have gone from 20% of total revenues in 2005 to almost half last year. Earnings have increased an average of 28% annually in the past five years, debt is next to negligible and GES has been increasing its dividend since 2007, currently yielding 20 cents, or 2.5%.
However, Guess stock has fallen almost 30% since a November 2010 peak above $50. Its most recent quarterly earnings of 71 cents per share were down 5%, and analysts expect similar drops in earnings across the next couple quarters and FY 2012. The Street does expect GES earnings to grow 10% in FY13, but that still would far lag an industry-wide expectation of about 23%. Though it has a fair forward P/E of about 12, the growth concerns raise a red flag.
What’s troubling is that True Religion’s stock movement doesn’t reflect the company’s performance. TRLG’s earnings growth on a quarterly basis has been extremely inconsistent during the past two years. Also, while its full-year 2011 adjusted earnings reported Thursday were up 1 cent per share from 2010, at $1.88, they’re still 4 cents shy of 2009 earnings. Q4 2011 adjusted earnings also were down 2 cents down from 2010 levels, and well short of Wall Street expectations — and True Religion stock was hammered for it Friday, losing 27% in a single day!
But even if you think of buying on the dip at around $28, TRLG still isn’t a that much of a bargain, trading around 12 times expected 2012 earnings. And with no dividend, there’s nothing convincing me to stick around and wait for better times.
But don’t bother. Joe’s Jeans is dangling off the Nasdaq cliff — JOEZ has traded below $1 since April, so the company was given a six-month delisting warning from the Nasdaq in June, then got a six-month extension in December. And at about 70 cents per share, the company is as close as it has been to a buck since August.
In other words? This stock is sunk. If you’re dead-set on playing Joe’s Jeans, be aware that it has very thin daily volume and has a microcap market size ($45 million). So even though it doesn’t trade on the pink sheets yet, it is for all intents and purposes a high-risk penny stock gamble — not an investment.
So it’s logical to think that the premier makers of high-end denim should be minting money, right? Well, not exactly. While jeans have demonstrated staying power as a fashion statement, some of the biggest names in denim are far from a long-term lock as an investment.
Best Stocks For 2012 - Guess
Of this group, Guess is the oldest and the largest. Guess was one of the premier jean brands of the 1980s, then fell by the wayside in the ’90s to Best Stocks For 2012 - Gap (NYSE:GPS), Calvin Klein and others. But since the aughts, Guess has been heading in the right direction in several areas.Guess increased sex appeal in its ads to improve popularity. It diversified both its offerings, adding accessories and perfume, and its finances — Guess’ revenues outside the U.S. and Canada have gone from 20% of total revenues in 2005 to almost half last year. Earnings have increased an average of 28% annually in the past five years, debt is next to negligible and GES has been increasing its dividend since 2007, currently yielding 20 cents, or 2.5%.
However, Guess stock has fallen almost 30% since a November 2010 peak above $50. Its most recent quarterly earnings of 71 cents per share were down 5%, and analysts expect similar drops in earnings across the next couple quarters and FY 2012. The Street does expect GES earnings to grow 10% in FY13, but that still would far lag an industry-wide expectation of about 23%. Though it has a fair forward P/E of about 12, the growth concerns raise a red flag.
Best Stocks For 2012 - True Religion
True Religion, while still a bit diversified in its offerings, is a purer play on jeans. It’s also a worse one. True Religion is a much smaller operation than Guess, though similar in that it also sells its clothes through other retailers. Its jeans run in a range between $220 and $320, so it’s safe to call TRLG a luxury stock. And a look at its share price shows True Religion definitely is behaving like other luxury stocks — TRLG is up 70% in the past year.What’s troubling is that True Religion’s stock movement doesn’t reflect the company’s performance. TRLG’s earnings growth on a quarterly basis has been extremely inconsistent during the past two years. Also, while its full-year 2011 adjusted earnings reported Thursday were up 1 cent per share from 2010, at $1.88, they’re still 4 cents shy of 2009 earnings. Q4 2011 adjusted earnings also were down 2 cents down from 2010 levels, and well short of Wall Street expectations — and True Religion stock was hammered for it Friday, losing 27% in a single day!
But even if you think of buying on the dip at around $28, TRLG still isn’t a that much of a bargain, trading around 12 times expected 2012 earnings. And with no dividend, there’s nothing convincing me to stick around and wait for better times.
Best Stocks For 2012 - Joe’s Jeans
I saved the worst for last. Joe’s Jeans is a tiny company that sells jeans in the $100-$200 range, as well as other clothes and accessories. And there’s not much good to say about it. Its fourth-quarter earnings were … whoops! We don’t know. JOEZ was tentatively slated to report on Thursday, but as of this writing, it didn’t show. What we do know is the company lost 3 cents per share in its previous quarter, and analysts expect Joe’s Jeans to break even for the year, then earn 3 cents per share in FY12.But don’t bother. Joe’s Jeans is dangling off the Nasdaq cliff — JOEZ has traded below $1 since April, so the company was given a six-month delisting warning from the Nasdaq in June, then got a six-month extension in December. And at about 70 cents per share, the company is as close as it has been to a buck since August.
In other words? This stock is sunk. If you’re dead-set on playing Joe’s Jeans, be aware that it has very thin daily volume and has a microcap market size ($45 million). So even though it doesn’t trade on the pink sheets yet, it is for all intents and purposes a high-risk penny stock gamble — not an investment.
Best Stocks To Buy In 2012
Best Stocks To Buy In 2012#1: Diamond Foods (DMND)
“Diamond Foods (NASDAQ: DMND), a player in nuts and pop corn, is our top pick for 2012,” says Sy Harding. In his The Long & Short Stock Advisor, he explains, “The company seems to have had no problems with the recession or slow economy.
“The firm processes and markets culinary, snack, and in-shell walnuts, pine nuts, pecans, peanuts, macadamia nuts, hazel nuts, cashews, Brazil nuts, and almonds. It sells snack packages under its Diamond, Emerald, and Pop Secret brand names.
“The company seems to have had no problems with the recession or slow economy. Its sales and earnings remain on a fast growth track.
Permalink: [640] Top Stocks To Buy – Best Stocks To Buy In 2012
“In fact, it may well be that the slow economy and high unemployment are a plus for this company, with more people eating at home, watching home movies – and eating snacks.
“The company’s growth is also supported by the growing interest in healthy eating, which includes recommendations from the healthcare industry to include nuts in our daily menus, and to snack on nuts rather than unhealthy fatty-food items.
“In any event, the trend of Diamond’s top and bottom lines are impressive, with gains each of the last four years, in spite of the recession. Value Line estimates earnings in 2012 will be rise another 24% over 2010’s earnings.
“Always positioning for continued growth, the company is working on expanding its distribution network of grocery stores, food processing companies, restaurants, bakeries, and food service companies in over 100 countries. Foreign sales currently account for only 20% of total sales.
“Diamond also continues to introduce add new products to its snack lines, like Cocoa Roasted Almonds, and Sea Salt Cashews, which were added recently.
“At the current price the shares are selling at 18 times estimated 2012 earnings, a relatively low P/E ratio for what appears to be a solid, if small, growth company. Our upside target is $41. We suggest a ‘mental’ protective stop at $25.80.”
Best Stocks To Buy In 2012#2: Dollar Tree (DLTR)
“Discount retailers are in high fashion right now, and 2012 could be a good time to capitalize on the macro-level trend toward value-driven consumption as consumers battle too much debt and a weak labor market,” says Michael Vodicka.
To benefit from this trend, the momentum stock strategist for Zacks.com looks to Dollar Tree(NASDAQ: DLTR) as his top pick for the coming year.
“2010 was a year of surprises. Stocks ended up logging a monumental rally that kicked o? in March, most of the major domestic banks have freed themselves from TARP restrictions and the housing market has shown signs of stability.
“But in spite of all these incredible gains, consumers are still struggling with too much debt and high unemployment. This is the ideal consumer environment for an extreme discounter like Dollar Tree.
“Dollar Tree isn’t a new name, the company’s been around since 1986, has a market cap of $4.26 billion and operates more than 3,600 stores in 48 states.
“It carries a wide range of consumer and household products like paper towels, cleaning goods and beauty supplies, all for less than $1.
“The company’s strategic advantage was on full display in 2010, beating the consensus estimate in each quarter by an average of 11%. Its Q4 results from late November, heading into the holiday season included sales growth of 12% from last year.
“The top line growth goes well with gross and operational margin expansion, both on the upswing due to lower commodity costs and process evaluation.
“Dollar Tree bought back 3.5 million shares in 2010, with $300 million remaining from a $500 million Board approval. The company has been committed to taking advantage of the value-driven consumer environment, opening 94 new stores this year and expanding or relocating another 74.
“But in spite of these moves, Dollar Tree balance sheet still looks strong, with cash and equivalents totaling $342 million against a debt load of $267.5 million, with just $17.6 million current.
“Looking forward, analysts are optimistic about the company’s prospects in 2012, targeting full-year earnings of $3.84 per share. With shares trading at $48, this stock has a forward P/E of just 12.5, a nice discount to the overall market.”
Best Stocks To Buy In 2012#3: Affymetrix
by Nate Pile, editor Nate’s Notes
For a number of reasons, my top stock pick for 2012 is Affymetrix (AFFX). This small company based in Santa Clara, CA, develops, manufactures, sells, and services equipment and consumables used in the life sciences industry to do what is know as “high throughput genetic screening.”
Customers range from academic and research facilities to clinical laboratories to other biotech and pharmaceutical companies doing work that requires them to analyze and manage large amounts of genomic and genetic information. Though A”ymetrix was one of the first companies to get into this business back in 1991, the industry has attracted a number of competitors along the way.
And, while A”ymetrix was once a leader in the industry, it has unfortunately found itself playing catch up to others in the sector for the past several years now. In response to the increased competition, A”ymetrix has seen its stock tumble from $60 back in 2005 (and $160 at the peak of the dot-com bubble in 2000) to its current price of roughly $5 today.
Naturally, this has been frustrating for shareholders and management alike, but the good news is that management seems to be getting the train back on the track. management is making changes that will allow the company to more e”ectively compete in what has become a much tougher operating environment.
Also working in favor of investors buying the stock today is the fact that the company’ s current market cap is $400 million; this compares to $9 billion-plus for Illumina, one of A “ymetrix’s most direct competitors. This suggests that just about all the bad news that can be anticipated for the company has already been factored into the share price.
In fact, from current levels, I believe if the company is merely able to “tread water” for the next twelve months, the stock could still trade back up to the $8-range by the end of the year.
And, if even just a few pieces of the puzzle fall back into place for the company, it would not surprise me at all to see the share price trade up into the low- to mid-teens over the course of 2012. Yes, there is still work to be done before the company will once again be considered a ”best of breed” stock.
Nevertheless on a valuation basis, I consider A”ymetrix to be one of the most attractive opportunities available to investors in the the life sciences arena as we head into the new year. AFFX is a strong buy under $4 and a buy under $6.
Best Stocks To Buy In 2012#4: Aflac
by Richard Moroney, editor Dow Theory Forecasts
Aflac (AFL) represents a top year-ahead pick based on its solid operating momentum and modest valuation. In our proprietary ranking system (known as Quadrix), the stock earns an Overall score of 99. At 10 times trailing earnings, the shares trade 33% below the five-year average P/E ratio of 15.
The insurer’s sales rose 13% in the first nine months of this year, while free cash how rose 12%. At 10 times trailing earnings, shares trade 32% below the three-year average P/E ratio. Arac continues to grow in Japan (about 75% of sales), but growth in the U.S. (roughly 25%) has been tougher to find.
Management remains cautious about its U.S. outlook, but it should benefit as small companies, which make up a large portion of the domestic business, begin to hire again. A?ac — yielding 2.2% — is a Focus List Buy and a holding on our Long-Term Buy list.
Best Stocks To Buy In 2012#5: Computer Sciences
by Sy Harding, editor Street Smart Report
Computer Sciences (CSC) — our top pick for 2012 — is a global leader in providing information technology and related services to commercial accounts and government agencies.
In our view, the wind is likely to be at the company’s back as the economic recovery continues to strengthen over the next two years.
The company specializes in complex IT applications, and its services include operating all or portions of a customer’s technology infrastructure, including systems analysis, applications development, network operations, and data center management. The company weathered the 2007-2009 recession with ease, but experienced sluggish growth in 2010.
However, the future looks brighter again as the company’s ‘qualified new-business folder’ has grown 20% from a year ago, with potential for new government contracts particularly promising.
For example, CSC announced a number of deals in December, including a seven-year agreement with a major insurance company for the use of Computer Sciences’ Wealth Management Accelerator software.
The company also announced a $33 million contract with the Department of Veteran A “airs, and four application management contracts with the Environmental Protection Agency.
Computers Sciences was also honored in December as ’2010 Enterprise Cloud Leader’ at the 2010 Cloud Expo in California for its leadership in guiding customers in the implementation of ‘cloud-computing’. The shares are selling at just 8.6 times estimated 2012 earnings, and at about one times book value. We have a 12-month upside target of 60.
Best Stocks To Buy In 2012#6: CPFL Energia
by Neil George, editor The Pay Me Strategy
To find strong dividend paying stocks, we apply two primary tests. One stock that passes both of these tests — and ranks our as top investment idea for the coming year — is CPFL Energia (CPL), one of Brazil’s major power utilities. I focus on stocks that will grow your retirement wealth during good times and bad. And one of the crucial means of making this happen is to adhere to a few major tenets when it comes to picking stocks for your own retirement portfolio.
This includes focusing on stocks oering solid, high-paying dividends. And if they can be found in rising markets with rising currencies – so much the better for the long haul. I look to find stocks that are in sustainable industries and then put them through our stress tests. Stress test number one is to focus on a company’s income statement and look at what happens when the worst hits its market. If the cash keeps coming to service its dividends – then it’s passed the first test.
Second, we focus on the balance sheet. This is where you look at the debt and what needs to happen to keep that debt serviced and rolled over.
The interesting thing about many stocks in emerging markets is that they tend to have less debt than their peers in the so-called major markets.
CPFL Energia, which is based in the financial capital city of San Paulo, keeps pumping out the cash..
The stock pays a dividend of over 8 percent – which has been climbing by over 27 percent over the past five years alone. And for those same past five years – just as markets in the US, Europe and Japan have imploded – CPFL Energia has delivered returns each and every year averaging over 27 percent.
Best Stocks To Buy In 2012#7: Keegan Resources (KGN): Brien Lundin
“Gold will be the primary beneficiary of the massive bailout and stimulus plans enacted by not only the United States, but every industrialized nation across the globe,” forecasts Brien Lundin.
The mining stock specialist and editor of The Gold Newsletter looks to a small gold exploration and development company as his top pick for 2012: Keegan Resources (ASE: KGN).
“Because of the deflationary influences of higher productivity, moribund economic growth and cheap labor in developing nations, we won’t see the kind of price inflation that characterized the 1970s.
“But we will see galloping monetary inflation — or much more currency in circulation — and the result will be higher prices for assets such as commodities and equities.
“So if gold is going to lead the pack, what’s the best gold investment? In my opinion, smaller gold exploration and development companies will o?er valuable leverage to gold, and one of the best is Keegan Resources.
“Keegan controls the Esaase gold project, a major mine-in-the-making located in the investor-friendly nation of Ghana, in west Africa.
“The company has made quick work of the project, going from field exploration to drilling to resource definition and pre-feasibility studies in a span of just three years.
“Now, Keegan finds itself sitting on top of a near-surface, open-pittable deposit that contains 3.47 million ounces of gold according to the most recent resource estimate.
“As impressive as that total is, it has the potential to grow significantly larger. The outlined resource remains open both along trend and at depth, and it lies within a country that hosts some of the world’s largest gold deposits.
“Whether Keegan can unearth a resource of similar size at Esaase remains to be seen, but most analysts feel the next resource estimate will show the total gold holdings to have increased to at least five million ounces.
“And with the company tying up new ground along trend, there’s literally no telling how large this find could grow.
“Frankly, I don’t expect Keegan to develop Esaase into a mine — that job will likely devolve to the major mining company that buys Esaase, or Keegan itself.
“The company’s management team knows this as well, and they are guaranteeing the best price by advancing steadily toward production.
“Keegan was among the highest of the high flyers during gold’s fall rally. Although the share price has therefore come back fairly hard during the subsequent correction, the closing of a recent financing essentially opened a door to potential take-out o?ers for the company.
“While I know of no indications that any o?ers are forthcoming, there is the possibility that a bid, or a bidding war, could emerge at any time. In light of this, and considering the dip in its share price, Keegan is one of my top gold stock recommendations.”
Best Stocks To Buy In 2012#8: Kinder Morgan (KMP): Daily Paycheck
For her top pick for 2012, income specialist Amy Calistri looks to Kinder Morgan Energy Partners L.P. (NYSE: KMP).
The editor of The Daily Paycheck explains, “I always look for the gift that keeps on giving; that’s how I view this master limited partnership, which produces a steady stream of income each and every quarter.
“Kinder Morgan Energy Partners is one of the largest owners and operators of energy- product pipelines and storage facilities in the United States.
“Formed in 1992, KMP is structured as a publicly-traded master limited partnership (MLP). MLPs are an important asset class for income investors because they are legally required to distribute most of their taxable income and cash flow to shareholders (known as ‘unitholders’).
“KMP’s extensive pipeline systems carry products such as gasoline and heating oil from the Gulf Coast to the East and West Coasts.
“KMP also owns and operates a network of carbon-dioxide (CO2) pipelines, which are used in a process known as enhanced oil recovery. These pipes carry CO2 to old oil fields where it is injected into the fields to increase productivity. These enhanced recovery techniques become more popular as oil prices rise.
“And KMP is continuing to grow its pipeline revenues through expansion. This past November , the Rockies Express Pipeline became fully operational.
“KMP owns a 50% stake in the 1,679-mile project, which carries natural gas from the Rocky Mountains to the Pennsylvania/Ohio border.
“Although KMP is an energy-related company, its revenues are relatively insensitive to energy prices. The partnership earns fees based on the amount — not the price — of gas, oil or refined products it processes and transports.
“Many of its interstate pipelines charge rates that are regulated by the Federal Energy Regulatory Commission. These regulated rates are set to allow Kinder Morgan a steady, reliable return on invested capital.
“Further, the partnership has already locked in guaranteed capacity from a few shippers on its pipes. KMP appears to be on track to not only deliver, but also continue to grow, its distributions.
“And when it comes to distributions, KMP has a stellar track record, having made quarterly payments like clockwork since October 1992.
“KMP also has a very consistent record of dividend growth, boosting distributions nearly every year since its inception. The partnership has increased its distributions at an annualized rate of +7.5% in the last five years alone.
“KMP currently pays a quarterly dividend of $1.05 per unit, equivalent to $4.20 per year for a yield of approximately 7% at current prices. It should be noted that MLPs are best held in taxable accounts as most of their distributions are classified as ‘return of capital’.”
Best Stocks To Buy In 2012#9: Flagstar Bancorp
by Mark Skousen, editor The Hedge Fund Trader
My favorite speculative stock idea for 2012 is Flagstar Bancorp (FBC), the Troy, Michigan-based bank with 165 branches in Michigan, Indiana, and Georgia.
The stock was trading for over $140 a share before the financial crisis; the stock fell to $5 a share last May, and it is now under $1.50.
Earnings are way down, and the stock has su”ered from heavy tax loss selling in November and December. In fact, it’s selling for a fraction of its book value ($5.30). But there is some good news coming out. Quarterly revenues tripled to $459 million, and the bank is expected to be marginally profitable next year. They are growing rapidly again by using a little-known but powerful technique called ”EVA momentum.”
Economic Value Added (EVA) — a powerful new metric in finance — was co-invented by Joel Stern and Bennett Stewart as a performance measure in excess of the opportunity cost of capital.
Joel Stern is a genius who teaches finance at six graduate schools, including Chicago, Carnegie-Mellon, and Cape Town, and speaks each year at FreedomFest.) Flagstar broke positive this year with an EVA momentum of 11.5%, one of the highest rankings of all thrift and mortgage finance companies.
In short, Flagstar is creating value for its shareholders at a rapid pace, and that fact will re?ect itself in a higher stock price.
Currently it has nearly $3 billion in cash to deal with its $3.65 billion in debt. It might be a good takeover candidate by one of the regional banks.
The tax selling is probably over by now, and FBR Capital just upgraded its rating of the stock to “outperform.”
Moreover, company o#cers and directors are buying stock, 2.2 million shares worth since November 1 at between $1 and $1.35. In every way, this small bank stock is a super bargain. It could double in value and still sell below book.
Best Stocks To Buy In 2012#10: Goldcorp
by Curtis Hesler, editor Professional Timing Service
Gold was the hot topic in 2010. Since the underlying factors that pushed prices to new highs have not changed, I expect my long held target of $1,600 gold will be realized in 2012.
In fact, I expect that upside target of $1,600 will be woefully short of the mark. And my favorite gold stock for 2012 is Goldcorp (GG).
Gold belongs in everyone’s portfolio, and there are many ways to invest in precious metals. You can buy bullion in several forms, you can buy ETFs, or you can invest in mining companies.
Despite my long-term bullishness on gold, I would advise that spates of profit-taking set in from time to time. I caution against chasing strength.
Gold is going to have a di#cult time getting through $1,420 April 2012 basis without some further consolidation. There should be some support at $1,330, but there is still a good possibility that we might see gold correct to $1,250.
Nevertheless, that would be an excellent time to climb on and add to positions. The forces that put gold at $1,400 will still be in force, and the next leg should take gold to our long-held target of $1,600.
Meanwhile, mining shares o”er you the best leverage, but not all miners are created equal. At this point in the gold bull market with gold already having appreciated by 450%, it would be wise to stick with the best of the best.
Goldcorp, in my estimation, is the very best gold mining operation on the planet. Their revenues are expanding, they are the best managed and are among the most ecient of the major producers, and they just doubled their dividend. Goldcorp belongs at the core of your precious metals portfolio.
Best Stocks To Buy In 2012#11: Google
by Timothy Lutts’, editor Cabot Stock of the Month
As publisher of the Cabot advisories, I see the inner workings of a variety of successful investing systems, from pure momentum-driven systems to pure value-driven systems. And it’s interesting when they overlap For example, Google (GOOG) is currently recommended by both Cabot Market Letter and Cabot Benjamin Graham Value Letter. Google’s growth attraction is clear. Even with $28 billion in annual revenues, it’s still growing at a 23% rate.
Profit margins are a plump 33.8%. And the firm’s very bright employees are working diligently to expand outside its core advertising search business into businesses as di”erent as computer-guided cars and o”shore electric grids to connect wind farms.
As to value, GOOG has been treading water for the past three years, even while earnings ratcheted higher every month.
In fact, the stock is now 21% below its old 2007 high, even though revenues at the company are roughly 72% higher now and earnings are roughly 95% higher. Still, some people will argue the stock—currently trading near $600—is too expensive. To which we say, “It’s not how many shares you buy that counts; it’s how much money you invest.”
Best Stocks To Buy In 2012#12: Medifast (MED)
“My number one stock pick to start 2012 is Medifast Inc. (NYSE: MED), a weight and disease management company,” says Mike Turner.
The editor of Mastering the Markets explains, “The stock has skyrocketed from the $5 area to over $30 in just the last nine months.” Despite the gains, the advisor remains bullish on the stock’s prospects.
“My proprietary analysis software rates this stock as a fundamental ‘Strong Buy,’ with an overall score of 145 out of 200 — one of the highest rated stocks in my database.
“With regard to Medifast’s fundamentals, I like the following:
1 * The quarter-over-year-ago-quarter revenue growth rate of 45%. This is nearly twice the peer group average for MED.
2 * Quarter-over-year-ago-Quarter Earnings Growth Rate of 14%, which is above the average of its peer group.
3 * Its 5-year average annual sales growth is nearly 33%, almost 3 times the average of its peer group.
4 * Its 5-year average annual net income is over 18%, compared with 14.41% for its peer group.
5 * I consider any return on equity (ROE) of more than 15% as excellent. MED’s ROE is over 23%, more than twice its peer-group average.
“From a technical analysis perspective, my program gives Medifast a score of 75 out of a maximum of 100. This places MED in the top 10% of the stocks I watch, and very near the top of that group. Specifically, I like the following:
1 * The price trend for shares of MED has been moving higher for better than nine months. This trend is well above my system’s trend-line and well above MED’s 200-day moving average. This is indicative of a strong technical trend that shows no signs of abatement.
2 * Institutional ownership is at 30% — a large-enough chunk to convince me that the big traders believe this stock is heading higher.
3 * The average share price of all the stocks in Medifast’s Industry (Medical Equipment and Supplies) and sector (Healthcare) is moving higher. This is an indication that more money is likely moving in than moving out, helping to put upward pressure on MED.
“Disclosure: Mike Turner owns shares of MED either personally or via his managed account portfolio.”
Best Stocks To Buy In 2012#13: Mindray (MR): Alan Newman
“Mindray Medical International Limited (NYSE: MR), a China-based medical devices firm, is our top investment idea for the coming year,” says Alan Newman.
In his CrossCurrents newsletter, he notes, “The company is headquartered in Shenzhen, China and is one of many Chinese companies now specializing in the development, manufacture and marketing of medical devices worldwide.
“Its products range from patient monitoring units to in vitro diagnostics for bodily fluids, analyzers for same, ultrasound systems and digital radiography systems.
“The company has been around less than 20 years. It has operations in North America, Europe, China, and other Asian countries. Growth has been excellent. Revenues increased 57.5% in 2007 and 79% in 2008.In the same span, net income rose 74.9% and 34% respectively.
“The forward P/E is estimated to be 23.8. An $0.18 dividend was paid in March 2008 and a $0.20 dividend was paid in March 2010.
“Like most companies, the shares were crushed in the autumn swoon of 2008 that gripped world markets, but bottomed in late November 2008 and remained on a steady incline until mid-August 2010, rising roughly two-and-a-half fold.
“The shares have since consolidated quite well, trading in a narrow range while our charts suggest accumulation by smart money.
“We believe the stock is a buy at current levels and would not at all be surprised to see the October 2007 peak of $45.19 challenged and exceeded in 2012.”
Best Stocks To Buy In 2012#14: MDU Resources
by Roger Conrad, editor The Utility Forecaster
Even among great companies, one year’s leader is often the next’s laggard and vice versa; MDU Resources (MDU) is one under-performer that looks increasingly likely to get it’s legs back in 2012.
The company is best thought of as a financially conservative resource company, whose cash ?ows are anchored by solid regulated energy assets.
Management has systematically grown both sides of its business year after year, even while holding debt to 40 percent or less of capital and increasing its dividend 20 consecutive years.
The latest–a 3.2 percent boost e”ective with the quarterly payment in January–is remarkable for two reasons.
First, it comes at the end of a tough year for several operations and at the same time management has continued aggressive spending in several areas. Second, despite earnings that are likely to prove a nadir for the company, dividend coverage was still nearly 2-to-1.
That suggests immense staying power, even if the US economy remains sluggish. And the more growth picks up, the greater the potential for MDU’s profits to rise. As an oil and gas producer, the company has an increasingly lucrative position in the Bakken trend producing light oil.
Utility construction is in good shape to benefit from the buildout of transmission infrastructure to bring renewable energy from the upper Midwest to Chicago and other major cities.
And the company’s position as a top 10 producer of construction materials and aggregates is well placed to profit from government-sponsored infrastructure projects, such as road building and maintenance.
Finally, the company’s Montana, Dakotas and Pacific Northwest gas and electric utilities and pipeline unit enjoy some of the most supportive regulation in the country, ensuring planned investment will ?ow to rate base and earnings. That adds up to double-digit earnings growth in coming years, though a”ected by economic ups and downs.
Over the past 20 years, MDU has thrown o” a nearly 1,000 percent return–rising a combination of rising dividends and capital growth to annual returns approaching 13 percent. Buy up to 24.
Best Stocks To Buy In 2012#15: Medtronic
by Jim Stack, editor InvesTech Market Analyst
For over 50 years, Medtronic (MDT) has been the premier medical device manufacturer in the marketplace.
With the invention of the battery-powered pacemaker in the mid 1950s, Medtronic began a long string of technological innovations. Over time, that one breakthrough was transformed into a company that now holds over 21,000 filed patents and employs over 9,000 scientists and engineers.
Success has allowed Medtronic to develop a very healthy financial position. Without jumping into too many details, the company’s Free Cash Flow Margin – the percentage of sales that end up as actual “free cash” – has averaged a remarkably consistent 22% over the past 10 years.
Not only is this an impressive amount of cash generation, but the consistency with which the firm generates cash is even more amazing – it hardly deviates more than a percent or two from the mean.
There are very few businesses that have such a strong track record. To put this cash back in shareholder’s hands, management pays out a healthy 2.5% dividend. Even better, they have been aggressively increasing the dividend an average 20% per year for the past 5 years.
Today, Medtronic is bringing its knowledge of treating chronic ailments to a rapidly expanding worldwide middle-class.
Currently, international sales account for 41% of total revenue. In the most recent quarter, sales in China increased 24% year-over-year, while Latin America sales and Middle East & Africa sales each grew 19%.
Market share potential in emerging markets has many analysts forecasting double-digit earnings growth well into the future. For investors, Medtronic is being o”ered at valuation levels rarely seen and, in our opinion, levels that won’t last long.
This “discount” valuation is being driven by concerns over long-term growth potential in key areas – including the core cardiac rhythm segment. For reasons noted above, we think these concerns are overdone. Instead, we feel the current market gives us an opportunity to buy shares of a world class company at 11X earnings.
Compare the current valuation to Medtronic’s 10 year median P/E ratio of 27.8X and you get a sense of the value we see in this company.
As an added bonus, shares have come under pressure in recent weeks from year-end tax loss sellers. For new buyers, this provides a terrific entry point. Bottom line, Medtronic certainly fits our mold of finding good companies at attractive prices. It has the technical expertise, financial strength, growth potential, and valuation of a great investment.
Best Stocks To Buy In 2012#16: PepsiCo (PEP)
“PepsiCo (NYSE: PEP), my top pick for 2012, remains underrated by the market,” says Jim Stack.
The money manager and editor of InvesTech Market Analyst suggests, ”All too often, it’s viewed as a stodgy soft drink company, fully reliant on its namesake soda line. That’s a misconception.” Here, the sets the record straight.
“In reality, PepsiCo owns some of the most sought after brands in the world, including Gatorade, Tropicana, Frito-Lay, and Doritos. It does business in more than 200 countries worldwide, including key emerging market economies like China and India.
“Perhaps most important of all, it’s a growth company with analysts expecting long-term future earnings growth of 10-12% per year.
“In recent months, PepsiCo has taken another major step forward with the pending acquisition of its two primary bottlers – Pepsi Bottling Group and PepsiAmericas.
“The acquisition provides the potential to eliminate an estimated $500 million to $1 billion in redundant costs. If those cost savings are transferred directly to the bottom line, shareholders could see a significant increase in net income of 10% to 20%.
“Of perhaps even greater benefit, the purchase brings 80% of North American beverage distribution ‘in-house.’ This move will bring management one step closer to its final customers – injecting a level of flexibility into operations not often seen with a company of PepsiCo’s size.
“The acquisition further ties together the Pepsi story – a well run company with market leading growth positions and an attractive valuation.
“The executive suite neatly combines the beverage ‘megabrands’ such as Pepsi, Gatorade, Tropicana, and Mountain Dew with the world’s largest snack food company, Frito-Lay.
“Management then leverages these brands into international growth markets such as Latin America and Asia where sales volume increased more than 20% in 2008, and despite the most challenging world economy in decades, has seen high single-digit growth so far in 2010.
” On top of all this, Pepsi is currently trading at valuation levels not seen in 15 years. And although it’s a growth company, Pepsi still o?ers the dividend yield (3.0%) of a stalwart.
“Bottom line, Pepsi remains underrated by the market in general, and the bottler acquisition only enhances the company’s outlook.”
Best Stocks To Buy In 2012#17: Perfect World (PWRD)
“Perfect World Company Ltd. (NASDAQ: PWRD), an online game developer and operator, is my top investment idea for 2012,” says Alex Kolb.
The growth & income analyst for Zacks.com explains, “Chinese stocks have been on fire lately and Perfect World Co., Ltd. is no exception. And the company’s fundamentals point to even stronger momentum in 2012.
“The company develops online games based on its game engines and game development platforms. Perfect World’s games include massively multiplayer online role playing games (‘MMORPGs’) such asPerfect World, Legend of Martial Arts, Perfect World II, Battle of the Immortals and Fantasy Zhu Xian to name a few.
“Perfect World says that a substantial portion of the revenues are generated in China. However, its games have been licensed to leading game operators in a number of countries and regions in Asia, Europe and South America.
“The company also generates revenues from game operation in North America and plans to continue to explore new and innovative business models.
“Competitors like Shanda are also performing extremely well, an indicator that online role playing games are very popular and should continue attracting more players in 2012.
“PWRD shares have soared by more than 120% so far in 2010, surpassing the major averages by more than 100%. Despite the significant surge, the stock is attractively price with a forward P/E of 14.
“Perfect World’s fundamentals point to even stronger momentum in 2012. Analysts polled by Zacks currently have 2012 earnings pegged at $3.66 per share. The forecast is up from $3.45 over the past 2 months and compares favorably to the current 2010 Zacks Consensus estimate of $2.90.
“If history is any indication, earnings will exceed forecasts. Since 2007, Perfect World has consistently topped earnings expectations. Earnings surpassed estimates by an average of 31% over the past 4 consecutive quarters.
“The company is expected to see 33% earnings growth over the next 3 – 5 years, well above the industry’s expectation of 18% growth. Other strong industry comparisons include Perfect World’s return on equity (ROE) of 55.5%, versus the industry average of 2.5%.
“The company boasts a net profit margin of 47%, while the industry average is in the negative. It is also worth noting that Perfect World sports a solid balance sheet, showing no debt.
“The company saw robust results in the third quarter. Earnings per share of 81 cents came in 8% ahead of the Zacks Consensus Estimate. Total revenues jumped 13% year-over-year.
“Management mentioned that third-quarter results exceeded the company’s expectations, adding that Perfect World continues to strengthen its competitive advantages in the industry by strategically crafting a highly diversified portfolio of truly di?erentiated games.
“Recently, the company introduced a new 3D fantasy MMORPG, Forsaken World. Management explained that this game breaks new ground in terms of overall planning, programming and graphical designs.”
Best Stocks To Buy In 2012#18: PMC Sierra
by Paul McWilliams, editor Next Inning
PMC Sierra (PMCS) is a top speculative investment for the coming year. The company is a leader in the field of integration. By integrating more functions into a single chip, the company has doubled its market share in the SAS storage market as the industry moved from 3Gbs to 6Gbs.”
The company is also building significant traction with its single-chip “RAID on a Chip” solution and has leveraged its integration talent to become one of the dominant suppliers in the FTTx space serving both GPON and EPON requirements.
Most recently, PMCS announced its acquisition of Israeli based Wintegra — a private company and the world leader in network processors for access networks. ”
The market for network processors in access applications, which includes broadband wireless backhaul, is just now building traction, and Wintegra will likely dominate the market for at least the next few years.”" As I see it, the acquisition makes a ton of sense from many perspectives.” First, as I noted, Wintegra is the leader in a market that is set to expand rapidly during the next few years. ”
Second, once we factor in the Wintegra balance sheet and PMCS minority ownership (yes, PMCS was a venture” investor in Wintegra), PMCS paid only about $205M net for the company. ”
Third, PMCS and Wintegra” have worked together for years and in many of the design wins you’ll find a PMCS and a Wintegra chip sitting side-by-side. ”
This means there is a very good integration opportunity for PMCS to put the functions of both chips into a single chip, and by doing so extend competitive advantages and lower costs.
The short story is that in spite of the fact that the company has topped the earnings consensus for six out of the last seven quarters, and equaled it for the” seventh, Wall Street still insists on slapping the stock with a huge risk discount. ”
I believe as PMCS maintains this practice of topping Wall Street projections the risk discount will be removed, and with that, the forward price to earnings (valuation multiple) will rise considerably.
Best Stocks To Buy In 2012#19: PowerShares DB Agriculture ETF
by Gene Inger, editor The Inger Letter
One of the easiest ways to participate in the long-term demand for corn, wheat, cotton etc. is with a soft commodity-based exchange traded fund.
We recommend the PowerShares DB Agriculture ETF (DBA), our top pick for 2012. We believe the economy is entering a period of ‘hyper-stag?ation’, where prices for life’s necessities — such as gasoline, food and utility rates — will rise persistently over time.
The owerShares DB Agriculture ETF — soft commodity-oriented exchange traded fund — is one of the easiest ways to participate in the long-term demand for corn, wheat, cotton etc. is
This ETF has shown fairly steady progression over time. Given steady in?ation in food costs, soft commodities are likely to rise, with periodic bouts of selling and volatility. We think an investment retained over time in ‘soft commodities’, is relatively low risk contrasted to volatility in markets such as Oil, or the extended Gold market for now. Why? With Asian demand bound to increase over time, soft-commodity demand will too.
Nevertheless we caution investors against chasing strength; rather, one strategy to avoid timing is to scale into one’s position over time. If you scale-in, you get benefits of ensuing pullbacks while holding an initial stake.
Best Stocks To Buy In 2012#20: Verenium (VRNM): Andy Obermueller
“The Energy Security Act of 2007 has received little investor attention; however, it contains provisions that are likely to lead to significant returns for investors,” suggests Andy Obermueller.
In his Government-Driven Investing, he notes, “The law codifies the federal production targets for biofuel, which we believe presents a real opportunity for Vernenium (NASDAQ: VRNM).
“‘Biofuel’ has, for decades, been code for ‘corn-based ethanol.’ But this law also contains provisions for a new, advanced biofuel derived from cellulose, an organic compound found in all plant matter.
“Instead of using corn — which uses valuable farmland and can drive up the price of a staple food — cellulose can be derived from any plant, wheat or rice straw, corn stalks, scrap wood or even grass.
“The law calls for hundreds of millions of gallons of cellulose ethanol. There’s just one problem: Very little of cellulosic ethanol is being produced. By 2022, however, the nation will need, by virtue of federal law, 16 billion gallons.
“All problems, of course, are really opportunities in disguise. Especially for one company: Verenium. This is a biotech company that has mastered the enzymes required to unlock the energy in cellulose.
“It has built two demonstration-scale plants, one in Jennings, La., and another in Japan, and has announced it will build the nation’s first commercial-scale ethanol plant.
“It has two partners in this endeavor: Petroleum giant BP and the U.S. federal government, which has begun its due diligence on a federal loan guarantee for the project.
“The demand for cellulosic ethanol will rise many-fold in coming years, and Verenium, the leader in this field, will likely see similar gains as it puts this ground-breaking technology to work in the new plant and licenses the technology to hundreds of others.
“The loan guarantee for the plant will likely be a significant catalyst for these shares, and the continued demand for cellulosic ethanol will fill its co?ers — and reward shareholders — for years to come.”
Best Stocks To Buy In 2012#21: Virginia Mines (VGQ)
“Virginia Mines (Toronto: VGQ) remains my favorite gold exploration company,” says resource expert Adrian Day.
In choosing the stock as his top pick for 2012, the editor of The Global Analyst explains, “The company has a successful track record, top management and a super-strong balance.
“Virginia Mines has a successful track record, having discovered and subsequently sold to Goldcorp, the rich Eleonore deposit in northern Quebec. This discovery saw the stock go from the $2 range to the mid-teens. Following the sale (which saw a spin out to shareholders), the stock is in the low $5s, ready to try again.
“Exploration by its nature is very high risk, with very long odds of discovery. Most companies finance their exploration by continual equity o?erings, which mean dilution for shareholders even if they are successful.
“Virginia has a di?erent way: it is a prospect generating, looking for prospects, often by staking the ground, doing some exploration, and then looking for a joint venture partner.
“The partner spends the high-risk exploration dollars in return for a majority ownership in the property. This results in a low-risk business model.
“Even though the company gives up most of the property, it holds on to its balance sheet and by doing this over and over, can build a portfolio of properties in which it owns minority interests with someone else spending the money.
“As Virginia has grown and built a strong bank account (it has has $44 million on its balance sheet), it is now in a position to do a little more exploration than in the past. This enables it to sift through its projects, and by advancing them more, obtain better deal terms.
“Virginia has build a broad portfolio of projects, all in mining-friendly Quebec, in a range of metals and minerals, but emphasizing gold.
“Right now, it has six properties ready to drill over the winter season, all in the prospective but under-explored James Bay area. Some of these are very close to the Eleonore discovery, on ground not included in the sale to Goldcorp.
“Virginia is spending the money on four of these properties, with two being funded by partners. Some have brand new targets being drilled, others following up on previous drilling.
“While exploration remains long odds, Virginia has as good a shot as any, and at minimum, we expect the next six months or so to generate a lot of news on these properties that should see the stock buoyant.
“Any positive exploration results will see it move much higher. In the meantime, you can buy a fine company at less than NAV. Just the value of the royalty it retained on Eleonore and its cash in the bank are worth more than the entire market cap. All the exploration comes free.
“So you can buy a great company at below NAV. Despite the move up in the stock price in recent months, this is an excellent time to buy, ahead of this aggressive drilling campaign. We expect 2012 to be very good for Virginia and its shareholders.”
Best Stocks To Buy In 2012#22: Siga Technologies
by Dennis Slothower, editor Stealth Stocks
Last year for my favorite stock pick, I recommended IMAX which more than doubled. This year I would like to recommend Siga Technologies Inc. (SIGA), a bio-defense company that o”ers the same kind of upside potential for 2012.
In 2004, the US started an initiative called Project BioShield, which gave the government the right to purchase and stockpile vaccines and drugs to fight anthrax, smallpox and other potential agents of bio-terror.
SIGA is a leader in the development of pharmaceutical agents to fight potential bio-warfare pathogens and their ST-246 drug is considered to be the only known cure for smallpox, which the government is keenly interested in.
Recently, BARDA has stated their intent to award SIGA a $500 million contract, with options that potentially could be as high as $2.8 billion in orders. However, SIGA is being challenged in court by a competitor as being too big as a company to qualify for the government contract.
In fairness, BARDA has announced plans for a market survey to determine, whether there are any qualified small businesses with the capacity to produce an adequate supply of smallpox antiviral medication for the National Strategic Stockpile. It is unlikely that a small company will be able to meet the government’s needs as the drugs expire and need to be constantly replaced.
It is expected that SIGA will win this contract and if so investors could be rewarded with a double or triple in appreciation.
“Diamond Foods (NASDAQ: DMND), a player in nuts and pop corn, is our top pick for 2012,” says Sy Harding. In his The Long & Short Stock Advisor, he explains, “The company seems to have had no problems with the recession or slow economy.
“The firm processes and markets culinary, snack, and in-shell walnuts, pine nuts, pecans, peanuts, macadamia nuts, hazel nuts, cashews, Brazil nuts, and almonds. It sells snack packages under its Diamond, Emerald, and Pop Secret brand names.
“The company seems to have had no problems with the recession or slow economy. Its sales and earnings remain on a fast growth track.
Permalink: [640] Top Stocks To Buy – Best Stocks To Buy In 2012
“In fact, it may well be that the slow economy and high unemployment are a plus for this company, with more people eating at home, watching home movies – and eating snacks.
“The company’s growth is also supported by the growing interest in healthy eating, which includes recommendations from the healthcare industry to include nuts in our daily menus, and to snack on nuts rather than unhealthy fatty-food items.
“In any event, the trend of Diamond’s top and bottom lines are impressive, with gains each of the last four years, in spite of the recession. Value Line estimates earnings in 2012 will be rise another 24% over 2010’s earnings.
“Always positioning for continued growth, the company is working on expanding its distribution network of grocery stores, food processing companies, restaurants, bakeries, and food service companies in over 100 countries. Foreign sales currently account for only 20% of total sales.
“Diamond also continues to introduce add new products to its snack lines, like Cocoa Roasted Almonds, and Sea Salt Cashews, which were added recently.
“At the current price the shares are selling at 18 times estimated 2012 earnings, a relatively low P/E ratio for what appears to be a solid, if small, growth company. Our upside target is $41. We suggest a ‘mental’ protective stop at $25.80.”
Best Stocks To Buy In 2012#2: Dollar Tree (DLTR)
“Discount retailers are in high fashion right now, and 2012 could be a good time to capitalize on the macro-level trend toward value-driven consumption as consumers battle too much debt and a weak labor market,” says Michael Vodicka.
To benefit from this trend, the momentum stock strategist for Zacks.com looks to Dollar Tree(NASDAQ: DLTR) as his top pick for the coming year.
“2010 was a year of surprises. Stocks ended up logging a monumental rally that kicked o? in March, most of the major domestic banks have freed themselves from TARP restrictions and the housing market has shown signs of stability.
“But in spite of all these incredible gains, consumers are still struggling with too much debt and high unemployment. This is the ideal consumer environment for an extreme discounter like Dollar Tree.
“Dollar Tree isn’t a new name, the company’s been around since 1986, has a market cap of $4.26 billion and operates more than 3,600 stores in 48 states.
“It carries a wide range of consumer and household products like paper towels, cleaning goods and beauty supplies, all for less than $1.
“The company’s strategic advantage was on full display in 2010, beating the consensus estimate in each quarter by an average of 11%. Its Q4 results from late November, heading into the holiday season included sales growth of 12% from last year.
“The top line growth goes well with gross and operational margin expansion, both on the upswing due to lower commodity costs and process evaluation.
“Dollar Tree bought back 3.5 million shares in 2010, with $300 million remaining from a $500 million Board approval. The company has been committed to taking advantage of the value-driven consumer environment, opening 94 new stores this year and expanding or relocating another 74.
“But in spite of these moves, Dollar Tree balance sheet still looks strong, with cash and equivalents totaling $342 million against a debt load of $267.5 million, with just $17.6 million current.
“Looking forward, analysts are optimistic about the company’s prospects in 2012, targeting full-year earnings of $3.84 per share. With shares trading at $48, this stock has a forward P/E of just 12.5, a nice discount to the overall market.”
Best Stocks To Buy In 2012#3: Affymetrix
by Nate Pile, editor Nate’s Notes
For a number of reasons, my top stock pick for 2012 is Affymetrix (AFFX). This small company based in Santa Clara, CA, develops, manufactures, sells, and services equipment and consumables used in the life sciences industry to do what is know as “high throughput genetic screening.”
Customers range from academic and research facilities to clinical laboratories to other biotech and pharmaceutical companies doing work that requires them to analyze and manage large amounts of genomic and genetic information. Though A”ymetrix was one of the first companies to get into this business back in 1991, the industry has attracted a number of competitors along the way.
And, while A”ymetrix was once a leader in the industry, it has unfortunately found itself playing catch up to others in the sector for the past several years now. In response to the increased competition, A”ymetrix has seen its stock tumble from $60 back in 2005 (and $160 at the peak of the dot-com bubble in 2000) to its current price of roughly $5 today.
Naturally, this has been frustrating for shareholders and management alike, but the good news is that management seems to be getting the train back on the track. management is making changes that will allow the company to more e”ectively compete in what has become a much tougher operating environment.
Also working in favor of investors buying the stock today is the fact that the company’ s current market cap is $400 million; this compares to $9 billion-plus for Illumina, one of A “ymetrix’s most direct competitors. This suggests that just about all the bad news that can be anticipated for the company has already been factored into the share price.
In fact, from current levels, I believe if the company is merely able to “tread water” for the next twelve months, the stock could still trade back up to the $8-range by the end of the year.
And, if even just a few pieces of the puzzle fall back into place for the company, it would not surprise me at all to see the share price trade up into the low- to mid-teens over the course of 2012. Yes, there is still work to be done before the company will once again be considered a ”best of breed” stock.
Nevertheless on a valuation basis, I consider A”ymetrix to be one of the most attractive opportunities available to investors in the the life sciences arena as we head into the new year. AFFX is a strong buy under $4 and a buy under $6.
Best Stocks To Buy In 2012#4: Aflac
by Richard Moroney, editor Dow Theory Forecasts
Aflac (AFL) represents a top year-ahead pick based on its solid operating momentum and modest valuation. In our proprietary ranking system (known as Quadrix), the stock earns an Overall score of 99. At 10 times trailing earnings, the shares trade 33% below the five-year average P/E ratio of 15.
The insurer’s sales rose 13% in the first nine months of this year, while free cash how rose 12%. At 10 times trailing earnings, shares trade 32% below the three-year average P/E ratio. Arac continues to grow in Japan (about 75% of sales), but growth in the U.S. (roughly 25%) has been tougher to find.
Management remains cautious about its U.S. outlook, but it should benefit as small companies, which make up a large portion of the domestic business, begin to hire again. A?ac — yielding 2.2% — is a Focus List Buy and a holding on our Long-Term Buy list.
Best Stocks To Buy In 2012#5: Computer Sciences
by Sy Harding, editor Street Smart Report
Computer Sciences (CSC) — our top pick for 2012 — is a global leader in providing information technology and related services to commercial accounts and government agencies.
In our view, the wind is likely to be at the company’s back as the economic recovery continues to strengthen over the next two years.
The company specializes in complex IT applications, and its services include operating all or portions of a customer’s technology infrastructure, including systems analysis, applications development, network operations, and data center management. The company weathered the 2007-2009 recession with ease, but experienced sluggish growth in 2010.
However, the future looks brighter again as the company’s ‘qualified new-business folder’ has grown 20% from a year ago, with potential for new government contracts particularly promising.
For example, CSC announced a number of deals in December, including a seven-year agreement with a major insurance company for the use of Computer Sciences’ Wealth Management Accelerator software.
The company also announced a $33 million contract with the Department of Veteran A “airs, and four application management contracts with the Environmental Protection Agency.
Computers Sciences was also honored in December as ’2010 Enterprise Cloud Leader’ at the 2010 Cloud Expo in California for its leadership in guiding customers in the implementation of ‘cloud-computing’. The shares are selling at just 8.6 times estimated 2012 earnings, and at about one times book value. We have a 12-month upside target of 60.
Best Stocks To Buy In 2012#6: CPFL Energia
by Neil George, editor The Pay Me Strategy
To find strong dividend paying stocks, we apply two primary tests. One stock that passes both of these tests — and ranks our as top investment idea for the coming year — is CPFL Energia (CPL), one of Brazil’s major power utilities. I focus on stocks that will grow your retirement wealth during good times and bad. And one of the crucial means of making this happen is to adhere to a few major tenets when it comes to picking stocks for your own retirement portfolio.
This includes focusing on stocks oering solid, high-paying dividends. And if they can be found in rising markets with rising currencies – so much the better for the long haul. I look to find stocks that are in sustainable industries and then put them through our stress tests. Stress test number one is to focus on a company’s income statement and look at what happens when the worst hits its market. If the cash keeps coming to service its dividends – then it’s passed the first test.
Second, we focus on the balance sheet. This is where you look at the debt and what needs to happen to keep that debt serviced and rolled over.
The interesting thing about many stocks in emerging markets is that they tend to have less debt than their peers in the so-called major markets.
CPFL Energia, which is based in the financial capital city of San Paulo, keeps pumping out the cash..
The stock pays a dividend of over 8 percent – which has been climbing by over 27 percent over the past five years alone. And for those same past five years – just as markets in the US, Europe and Japan have imploded – CPFL Energia has delivered returns each and every year averaging over 27 percent.
Best Stocks To Buy In 2012#7: Keegan Resources (KGN): Brien Lundin
“Gold will be the primary beneficiary of the massive bailout and stimulus plans enacted by not only the United States, but every industrialized nation across the globe,” forecasts Brien Lundin.
The mining stock specialist and editor of The Gold Newsletter looks to a small gold exploration and development company as his top pick for 2012: Keegan Resources (ASE: KGN).
“Because of the deflationary influences of higher productivity, moribund economic growth and cheap labor in developing nations, we won’t see the kind of price inflation that characterized the 1970s.
“But we will see galloping monetary inflation — or much more currency in circulation — and the result will be higher prices for assets such as commodities and equities.
“So if gold is going to lead the pack, what’s the best gold investment? In my opinion, smaller gold exploration and development companies will o?er valuable leverage to gold, and one of the best is Keegan Resources.
“Keegan controls the Esaase gold project, a major mine-in-the-making located in the investor-friendly nation of Ghana, in west Africa.
“The company has made quick work of the project, going from field exploration to drilling to resource definition and pre-feasibility studies in a span of just three years.
“Now, Keegan finds itself sitting on top of a near-surface, open-pittable deposit that contains 3.47 million ounces of gold according to the most recent resource estimate.
“As impressive as that total is, it has the potential to grow significantly larger. The outlined resource remains open both along trend and at depth, and it lies within a country that hosts some of the world’s largest gold deposits.
“Whether Keegan can unearth a resource of similar size at Esaase remains to be seen, but most analysts feel the next resource estimate will show the total gold holdings to have increased to at least five million ounces.
“And with the company tying up new ground along trend, there’s literally no telling how large this find could grow.
“Frankly, I don’t expect Keegan to develop Esaase into a mine — that job will likely devolve to the major mining company that buys Esaase, or Keegan itself.
“The company’s management team knows this as well, and they are guaranteeing the best price by advancing steadily toward production.
“Keegan was among the highest of the high flyers during gold’s fall rally. Although the share price has therefore come back fairly hard during the subsequent correction, the closing of a recent financing essentially opened a door to potential take-out o?ers for the company.
“While I know of no indications that any o?ers are forthcoming, there is the possibility that a bid, or a bidding war, could emerge at any time. In light of this, and considering the dip in its share price, Keegan is one of my top gold stock recommendations.”
Best Stocks To Buy In 2012#8: Kinder Morgan (KMP): Daily Paycheck
For her top pick for 2012, income specialist Amy Calistri looks to Kinder Morgan Energy Partners L.P. (NYSE: KMP).
The editor of The Daily Paycheck explains, “I always look for the gift that keeps on giving; that’s how I view this master limited partnership, which produces a steady stream of income each and every quarter.
“Kinder Morgan Energy Partners is one of the largest owners and operators of energy- product pipelines and storage facilities in the United States.
“Formed in 1992, KMP is structured as a publicly-traded master limited partnership (MLP). MLPs are an important asset class for income investors because they are legally required to distribute most of their taxable income and cash flow to shareholders (known as ‘unitholders’).
“KMP’s extensive pipeline systems carry products such as gasoline and heating oil from the Gulf Coast to the East and West Coasts.
“KMP also owns and operates a network of carbon-dioxide (CO2) pipelines, which are used in a process known as enhanced oil recovery. These pipes carry CO2 to old oil fields where it is injected into the fields to increase productivity. These enhanced recovery techniques become more popular as oil prices rise.
“And KMP is continuing to grow its pipeline revenues through expansion. This past November , the Rockies Express Pipeline became fully operational.
“KMP owns a 50% stake in the 1,679-mile project, which carries natural gas from the Rocky Mountains to the Pennsylvania/Ohio border.
“Although KMP is an energy-related company, its revenues are relatively insensitive to energy prices. The partnership earns fees based on the amount — not the price — of gas, oil or refined products it processes and transports.
“Many of its interstate pipelines charge rates that are regulated by the Federal Energy Regulatory Commission. These regulated rates are set to allow Kinder Morgan a steady, reliable return on invested capital.
“Further, the partnership has already locked in guaranteed capacity from a few shippers on its pipes. KMP appears to be on track to not only deliver, but also continue to grow, its distributions.
“And when it comes to distributions, KMP has a stellar track record, having made quarterly payments like clockwork since October 1992.
“KMP also has a very consistent record of dividend growth, boosting distributions nearly every year since its inception. The partnership has increased its distributions at an annualized rate of +7.5% in the last five years alone.
“KMP currently pays a quarterly dividend of $1.05 per unit, equivalent to $4.20 per year for a yield of approximately 7% at current prices. It should be noted that MLPs are best held in taxable accounts as most of their distributions are classified as ‘return of capital’.”
Best Stocks To Buy In 2012#9: Flagstar Bancorp
by Mark Skousen, editor The Hedge Fund Trader
My favorite speculative stock idea for 2012 is Flagstar Bancorp (FBC), the Troy, Michigan-based bank with 165 branches in Michigan, Indiana, and Georgia.
The stock was trading for over $140 a share before the financial crisis; the stock fell to $5 a share last May, and it is now under $1.50.
Earnings are way down, and the stock has su”ered from heavy tax loss selling in November and December. In fact, it’s selling for a fraction of its book value ($5.30). But there is some good news coming out. Quarterly revenues tripled to $459 million, and the bank is expected to be marginally profitable next year. They are growing rapidly again by using a little-known but powerful technique called ”EVA momentum.”
Economic Value Added (EVA) — a powerful new metric in finance — was co-invented by Joel Stern and Bennett Stewart as a performance measure in excess of the opportunity cost of capital.
Joel Stern is a genius who teaches finance at six graduate schools, including Chicago, Carnegie-Mellon, and Cape Town, and speaks each year at FreedomFest.) Flagstar broke positive this year with an EVA momentum of 11.5%, one of the highest rankings of all thrift and mortgage finance companies.
In short, Flagstar is creating value for its shareholders at a rapid pace, and that fact will re?ect itself in a higher stock price.
Currently it has nearly $3 billion in cash to deal with its $3.65 billion in debt. It might be a good takeover candidate by one of the regional banks.
The tax selling is probably over by now, and FBR Capital just upgraded its rating of the stock to “outperform.”
Moreover, company o#cers and directors are buying stock, 2.2 million shares worth since November 1 at between $1 and $1.35. In every way, this small bank stock is a super bargain. It could double in value and still sell below book.
Best Stocks To Buy In 2012#10: Goldcorp
by Curtis Hesler, editor Professional Timing Service
Gold was the hot topic in 2010. Since the underlying factors that pushed prices to new highs have not changed, I expect my long held target of $1,600 gold will be realized in 2012.
In fact, I expect that upside target of $1,600 will be woefully short of the mark. And my favorite gold stock for 2012 is Goldcorp (GG).
Gold belongs in everyone’s portfolio, and there are many ways to invest in precious metals. You can buy bullion in several forms, you can buy ETFs, or you can invest in mining companies.
Despite my long-term bullishness on gold, I would advise that spates of profit-taking set in from time to time. I caution against chasing strength.
Gold is going to have a di#cult time getting through $1,420 April 2012 basis without some further consolidation. There should be some support at $1,330, but there is still a good possibility that we might see gold correct to $1,250.
Nevertheless, that would be an excellent time to climb on and add to positions. The forces that put gold at $1,400 will still be in force, and the next leg should take gold to our long-held target of $1,600.
Meanwhile, mining shares o”er you the best leverage, but not all miners are created equal. At this point in the gold bull market with gold already having appreciated by 450%, it would be wise to stick with the best of the best.
Goldcorp, in my estimation, is the very best gold mining operation on the planet. Their revenues are expanding, they are the best managed and are among the most ecient of the major producers, and they just doubled their dividend. Goldcorp belongs at the core of your precious metals portfolio.
Best Stocks To Buy In 2012#11: Google
by Timothy Lutts’, editor Cabot Stock of the Month
As publisher of the Cabot advisories, I see the inner workings of a variety of successful investing systems, from pure momentum-driven systems to pure value-driven systems. And it’s interesting when they overlap For example, Google (GOOG) is currently recommended by both Cabot Market Letter and Cabot Benjamin Graham Value Letter. Google’s growth attraction is clear. Even with $28 billion in annual revenues, it’s still growing at a 23% rate.
Profit margins are a plump 33.8%. And the firm’s very bright employees are working diligently to expand outside its core advertising search business into businesses as di”erent as computer-guided cars and o”shore electric grids to connect wind farms.
As to value, GOOG has been treading water for the past three years, even while earnings ratcheted higher every month.
In fact, the stock is now 21% below its old 2007 high, even though revenues at the company are roughly 72% higher now and earnings are roughly 95% higher. Still, some people will argue the stock—currently trading near $600—is too expensive. To which we say, “It’s not how many shares you buy that counts; it’s how much money you invest.”
Best Stocks To Buy In 2012#12: Medifast (MED)
“My number one stock pick to start 2012 is Medifast Inc. (NYSE: MED), a weight and disease management company,” says Mike Turner.
The editor of Mastering the Markets explains, “The stock has skyrocketed from the $5 area to over $30 in just the last nine months.” Despite the gains, the advisor remains bullish on the stock’s prospects.
“My proprietary analysis software rates this stock as a fundamental ‘Strong Buy,’ with an overall score of 145 out of 200 — one of the highest rated stocks in my database.
“With regard to Medifast’s fundamentals, I like the following:
1 * The quarter-over-year-ago-quarter revenue growth rate of 45%. This is nearly twice the peer group average for MED.
2 * Quarter-over-year-ago-Quarter Earnings Growth Rate of 14%, which is above the average of its peer group.
3 * Its 5-year average annual sales growth is nearly 33%, almost 3 times the average of its peer group.
4 * Its 5-year average annual net income is over 18%, compared with 14.41% for its peer group.
5 * I consider any return on equity (ROE) of more than 15% as excellent. MED’s ROE is over 23%, more than twice its peer-group average.
“From a technical analysis perspective, my program gives Medifast a score of 75 out of a maximum of 100. This places MED in the top 10% of the stocks I watch, and very near the top of that group. Specifically, I like the following:
1 * The price trend for shares of MED has been moving higher for better than nine months. This trend is well above my system’s trend-line and well above MED’s 200-day moving average. This is indicative of a strong technical trend that shows no signs of abatement.
2 * Institutional ownership is at 30% — a large-enough chunk to convince me that the big traders believe this stock is heading higher.
3 * The average share price of all the stocks in Medifast’s Industry (Medical Equipment and Supplies) and sector (Healthcare) is moving higher. This is an indication that more money is likely moving in than moving out, helping to put upward pressure on MED.
“Disclosure: Mike Turner owns shares of MED either personally or via his managed account portfolio.”
Best Stocks To Buy In 2012#13: Mindray (MR): Alan Newman
“Mindray Medical International Limited (NYSE: MR), a China-based medical devices firm, is our top investment idea for the coming year,” says Alan Newman.
In his CrossCurrents newsletter, he notes, “The company is headquartered in Shenzhen, China and is one of many Chinese companies now specializing in the development, manufacture and marketing of medical devices worldwide.
“Its products range from patient monitoring units to in vitro diagnostics for bodily fluids, analyzers for same, ultrasound systems and digital radiography systems.
“The company has been around less than 20 years. It has operations in North America, Europe, China, and other Asian countries. Growth has been excellent. Revenues increased 57.5% in 2007 and 79% in 2008.In the same span, net income rose 74.9% and 34% respectively.
“The forward P/E is estimated to be 23.8. An $0.18 dividend was paid in March 2008 and a $0.20 dividend was paid in March 2010.
“Like most companies, the shares were crushed in the autumn swoon of 2008 that gripped world markets, but bottomed in late November 2008 and remained on a steady incline until mid-August 2010, rising roughly two-and-a-half fold.
“The shares have since consolidated quite well, trading in a narrow range while our charts suggest accumulation by smart money.
“We believe the stock is a buy at current levels and would not at all be surprised to see the October 2007 peak of $45.19 challenged and exceeded in 2012.”
Best Stocks To Buy In 2012#14: MDU Resources
by Roger Conrad, editor The Utility Forecaster
Even among great companies, one year’s leader is often the next’s laggard and vice versa; MDU Resources (MDU) is one under-performer that looks increasingly likely to get it’s legs back in 2012.
The company is best thought of as a financially conservative resource company, whose cash ?ows are anchored by solid regulated energy assets.
Management has systematically grown both sides of its business year after year, even while holding debt to 40 percent or less of capital and increasing its dividend 20 consecutive years.
The latest–a 3.2 percent boost e”ective with the quarterly payment in January–is remarkable for two reasons.
First, it comes at the end of a tough year for several operations and at the same time management has continued aggressive spending in several areas. Second, despite earnings that are likely to prove a nadir for the company, dividend coverage was still nearly 2-to-1.
That suggests immense staying power, even if the US economy remains sluggish. And the more growth picks up, the greater the potential for MDU’s profits to rise. As an oil and gas producer, the company has an increasingly lucrative position in the Bakken trend producing light oil.
Utility construction is in good shape to benefit from the buildout of transmission infrastructure to bring renewable energy from the upper Midwest to Chicago and other major cities.
And the company’s position as a top 10 producer of construction materials and aggregates is well placed to profit from government-sponsored infrastructure projects, such as road building and maintenance.
Finally, the company’s Montana, Dakotas and Pacific Northwest gas and electric utilities and pipeline unit enjoy some of the most supportive regulation in the country, ensuring planned investment will ?ow to rate base and earnings. That adds up to double-digit earnings growth in coming years, though a”ected by economic ups and downs.
Over the past 20 years, MDU has thrown o” a nearly 1,000 percent return–rising a combination of rising dividends and capital growth to annual returns approaching 13 percent. Buy up to 24.
Best Stocks To Buy In 2012#15: Medtronic
by Jim Stack, editor InvesTech Market Analyst
For over 50 years, Medtronic (MDT) has been the premier medical device manufacturer in the marketplace.
With the invention of the battery-powered pacemaker in the mid 1950s, Medtronic began a long string of technological innovations. Over time, that one breakthrough was transformed into a company that now holds over 21,000 filed patents and employs over 9,000 scientists and engineers.
Success has allowed Medtronic to develop a very healthy financial position. Without jumping into too many details, the company’s Free Cash Flow Margin – the percentage of sales that end up as actual “free cash” – has averaged a remarkably consistent 22% over the past 10 years.
Not only is this an impressive amount of cash generation, but the consistency with which the firm generates cash is even more amazing – it hardly deviates more than a percent or two from the mean.
There are very few businesses that have such a strong track record. To put this cash back in shareholder’s hands, management pays out a healthy 2.5% dividend. Even better, they have been aggressively increasing the dividend an average 20% per year for the past 5 years.
Today, Medtronic is bringing its knowledge of treating chronic ailments to a rapidly expanding worldwide middle-class.
Currently, international sales account for 41% of total revenue. In the most recent quarter, sales in China increased 24% year-over-year, while Latin America sales and Middle East & Africa sales each grew 19%.
Market share potential in emerging markets has many analysts forecasting double-digit earnings growth well into the future. For investors, Medtronic is being o”ered at valuation levels rarely seen and, in our opinion, levels that won’t last long.
This “discount” valuation is being driven by concerns over long-term growth potential in key areas – including the core cardiac rhythm segment. For reasons noted above, we think these concerns are overdone. Instead, we feel the current market gives us an opportunity to buy shares of a world class company at 11X earnings.
Compare the current valuation to Medtronic’s 10 year median P/E ratio of 27.8X and you get a sense of the value we see in this company.
As an added bonus, shares have come under pressure in recent weeks from year-end tax loss sellers. For new buyers, this provides a terrific entry point. Bottom line, Medtronic certainly fits our mold of finding good companies at attractive prices. It has the technical expertise, financial strength, growth potential, and valuation of a great investment.
Best Stocks To Buy In 2012#16: PepsiCo (PEP)
“PepsiCo (NYSE: PEP), my top pick for 2012, remains underrated by the market,” says Jim Stack.
The money manager and editor of InvesTech Market Analyst suggests, ”All too often, it’s viewed as a stodgy soft drink company, fully reliant on its namesake soda line. That’s a misconception.” Here, the sets the record straight.
“In reality, PepsiCo owns some of the most sought after brands in the world, including Gatorade, Tropicana, Frito-Lay, and Doritos. It does business in more than 200 countries worldwide, including key emerging market economies like China and India.
“Perhaps most important of all, it’s a growth company with analysts expecting long-term future earnings growth of 10-12% per year.
“In recent months, PepsiCo has taken another major step forward with the pending acquisition of its two primary bottlers – Pepsi Bottling Group and PepsiAmericas.
“The acquisition provides the potential to eliminate an estimated $500 million to $1 billion in redundant costs. If those cost savings are transferred directly to the bottom line, shareholders could see a significant increase in net income of 10% to 20%.
“Of perhaps even greater benefit, the purchase brings 80% of North American beverage distribution ‘in-house.’ This move will bring management one step closer to its final customers – injecting a level of flexibility into operations not often seen with a company of PepsiCo’s size.
“The acquisition further ties together the Pepsi story – a well run company with market leading growth positions and an attractive valuation.
“The executive suite neatly combines the beverage ‘megabrands’ such as Pepsi, Gatorade, Tropicana, and Mountain Dew with the world’s largest snack food company, Frito-Lay.
“Management then leverages these brands into international growth markets such as Latin America and Asia where sales volume increased more than 20% in 2008, and despite the most challenging world economy in decades, has seen high single-digit growth so far in 2010.
” On top of all this, Pepsi is currently trading at valuation levels not seen in 15 years. And although it’s a growth company, Pepsi still o?ers the dividend yield (3.0%) of a stalwart.
“Bottom line, Pepsi remains underrated by the market in general, and the bottler acquisition only enhances the company’s outlook.”
Best Stocks To Buy In 2012#17: Perfect World (PWRD)
“Perfect World Company Ltd. (NASDAQ: PWRD), an online game developer and operator, is my top investment idea for 2012,” says Alex Kolb.
The growth & income analyst for Zacks.com explains, “Chinese stocks have been on fire lately and Perfect World Co., Ltd. is no exception. And the company’s fundamentals point to even stronger momentum in 2012.
“The company develops online games based on its game engines and game development platforms. Perfect World’s games include massively multiplayer online role playing games (‘MMORPGs’) such asPerfect World, Legend of Martial Arts, Perfect World II, Battle of the Immortals and Fantasy Zhu Xian to name a few.
“Perfect World says that a substantial portion of the revenues are generated in China. However, its games have been licensed to leading game operators in a number of countries and regions in Asia, Europe and South America.
“The company also generates revenues from game operation in North America and plans to continue to explore new and innovative business models.
“Competitors like Shanda are also performing extremely well, an indicator that online role playing games are very popular and should continue attracting more players in 2012.
“PWRD shares have soared by more than 120% so far in 2010, surpassing the major averages by more than 100%. Despite the significant surge, the stock is attractively price with a forward P/E of 14.
“Perfect World’s fundamentals point to even stronger momentum in 2012. Analysts polled by Zacks currently have 2012 earnings pegged at $3.66 per share. The forecast is up from $3.45 over the past 2 months and compares favorably to the current 2010 Zacks Consensus estimate of $2.90.
“If history is any indication, earnings will exceed forecasts. Since 2007, Perfect World has consistently topped earnings expectations. Earnings surpassed estimates by an average of 31% over the past 4 consecutive quarters.
“The company is expected to see 33% earnings growth over the next 3 – 5 years, well above the industry’s expectation of 18% growth. Other strong industry comparisons include Perfect World’s return on equity (ROE) of 55.5%, versus the industry average of 2.5%.
“The company boasts a net profit margin of 47%, while the industry average is in the negative. It is also worth noting that Perfect World sports a solid balance sheet, showing no debt.
“The company saw robust results in the third quarter. Earnings per share of 81 cents came in 8% ahead of the Zacks Consensus Estimate. Total revenues jumped 13% year-over-year.
“Management mentioned that third-quarter results exceeded the company’s expectations, adding that Perfect World continues to strengthen its competitive advantages in the industry by strategically crafting a highly diversified portfolio of truly di?erentiated games.
“Recently, the company introduced a new 3D fantasy MMORPG, Forsaken World. Management explained that this game breaks new ground in terms of overall planning, programming and graphical designs.”
Best Stocks To Buy In 2012#18: PMC Sierra
by Paul McWilliams, editor Next Inning
PMC Sierra (PMCS) is a top speculative investment for the coming year. The company is a leader in the field of integration. By integrating more functions into a single chip, the company has doubled its market share in the SAS storage market as the industry moved from 3Gbs to 6Gbs.”
The company is also building significant traction with its single-chip “RAID on a Chip” solution and has leveraged its integration talent to become one of the dominant suppliers in the FTTx space serving both GPON and EPON requirements.
Most recently, PMCS announced its acquisition of Israeli based Wintegra — a private company and the world leader in network processors for access networks. ”
The market for network processors in access applications, which includes broadband wireless backhaul, is just now building traction, and Wintegra will likely dominate the market for at least the next few years.”" As I see it, the acquisition makes a ton of sense from many perspectives.” First, as I noted, Wintegra is the leader in a market that is set to expand rapidly during the next few years. ”
Second, once we factor in the Wintegra balance sheet and PMCS minority ownership (yes, PMCS was a venture” investor in Wintegra), PMCS paid only about $205M net for the company. ”
Third, PMCS and Wintegra” have worked together for years and in many of the design wins you’ll find a PMCS and a Wintegra chip sitting side-by-side. ”
This means there is a very good integration opportunity for PMCS to put the functions of both chips into a single chip, and by doing so extend competitive advantages and lower costs.
The short story is that in spite of the fact that the company has topped the earnings consensus for six out of the last seven quarters, and equaled it for the” seventh, Wall Street still insists on slapping the stock with a huge risk discount. ”
I believe as PMCS maintains this practice of topping Wall Street projections the risk discount will be removed, and with that, the forward price to earnings (valuation multiple) will rise considerably.
Best Stocks To Buy In 2012#19: PowerShares DB Agriculture ETF
by Gene Inger, editor The Inger Letter
One of the easiest ways to participate in the long-term demand for corn, wheat, cotton etc. is with a soft commodity-based exchange traded fund.
We recommend the PowerShares DB Agriculture ETF (DBA), our top pick for 2012. We believe the economy is entering a period of ‘hyper-stag?ation’, where prices for life’s necessities — such as gasoline, food and utility rates — will rise persistently over time.
The owerShares DB Agriculture ETF — soft commodity-oriented exchange traded fund — is one of the easiest ways to participate in the long-term demand for corn, wheat, cotton etc. is
This ETF has shown fairly steady progression over time. Given steady in?ation in food costs, soft commodities are likely to rise, with periodic bouts of selling and volatility. We think an investment retained over time in ‘soft commodities’, is relatively low risk contrasted to volatility in markets such as Oil, or the extended Gold market for now. Why? With Asian demand bound to increase over time, soft-commodity demand will too.
Nevertheless we caution investors against chasing strength; rather, one strategy to avoid timing is to scale into one’s position over time. If you scale-in, you get benefits of ensuing pullbacks while holding an initial stake.
Best Stocks To Buy In 2012#20: Verenium (VRNM): Andy Obermueller
“The Energy Security Act of 2007 has received little investor attention; however, it contains provisions that are likely to lead to significant returns for investors,” suggests Andy Obermueller.
In his Government-Driven Investing, he notes, “The law codifies the federal production targets for biofuel, which we believe presents a real opportunity for Vernenium (NASDAQ: VRNM).
“‘Biofuel’ has, for decades, been code for ‘corn-based ethanol.’ But this law also contains provisions for a new, advanced biofuel derived from cellulose, an organic compound found in all plant matter.
“Instead of using corn — which uses valuable farmland and can drive up the price of a staple food — cellulose can be derived from any plant, wheat or rice straw, corn stalks, scrap wood or even grass.
“The law calls for hundreds of millions of gallons of cellulose ethanol. There’s just one problem: Very little of cellulosic ethanol is being produced. By 2022, however, the nation will need, by virtue of federal law, 16 billion gallons.
“All problems, of course, are really opportunities in disguise. Especially for one company: Verenium. This is a biotech company that has mastered the enzymes required to unlock the energy in cellulose.
“It has built two demonstration-scale plants, one in Jennings, La., and another in Japan, and has announced it will build the nation’s first commercial-scale ethanol plant.
“It has two partners in this endeavor: Petroleum giant BP and the U.S. federal government, which has begun its due diligence on a federal loan guarantee for the project.
“The demand for cellulosic ethanol will rise many-fold in coming years, and Verenium, the leader in this field, will likely see similar gains as it puts this ground-breaking technology to work in the new plant and licenses the technology to hundreds of others.
“The loan guarantee for the plant will likely be a significant catalyst for these shares, and the continued demand for cellulosic ethanol will fill its co?ers — and reward shareholders — for years to come.”
Best Stocks To Buy In 2012#21: Virginia Mines (VGQ)
“Virginia Mines (Toronto: VGQ) remains my favorite gold exploration company,” says resource expert Adrian Day.
In choosing the stock as his top pick for 2012, the editor of The Global Analyst explains, “The company has a successful track record, top management and a super-strong balance.
“Virginia Mines has a successful track record, having discovered and subsequently sold to Goldcorp, the rich Eleonore deposit in northern Quebec. This discovery saw the stock go from the $2 range to the mid-teens. Following the sale (which saw a spin out to shareholders), the stock is in the low $5s, ready to try again.
“Exploration by its nature is very high risk, with very long odds of discovery. Most companies finance their exploration by continual equity o?erings, which mean dilution for shareholders even if they are successful.
“Virginia has a di?erent way: it is a prospect generating, looking for prospects, often by staking the ground, doing some exploration, and then looking for a joint venture partner.
“The partner spends the high-risk exploration dollars in return for a majority ownership in the property. This results in a low-risk business model.
“Even though the company gives up most of the property, it holds on to its balance sheet and by doing this over and over, can build a portfolio of properties in which it owns minority interests with someone else spending the money.
“As Virginia has grown and built a strong bank account (it has has $44 million on its balance sheet), it is now in a position to do a little more exploration than in the past. This enables it to sift through its projects, and by advancing them more, obtain better deal terms.
“Virginia has build a broad portfolio of projects, all in mining-friendly Quebec, in a range of metals and minerals, but emphasizing gold.
“Right now, it has six properties ready to drill over the winter season, all in the prospective but under-explored James Bay area. Some of these are very close to the Eleonore discovery, on ground not included in the sale to Goldcorp.
“Virginia is spending the money on four of these properties, with two being funded by partners. Some have brand new targets being drilled, others following up on previous drilling.
“While exploration remains long odds, Virginia has as good a shot as any, and at minimum, we expect the next six months or so to generate a lot of news on these properties that should see the stock buoyant.
“Any positive exploration results will see it move much higher. In the meantime, you can buy a fine company at less than NAV. Just the value of the royalty it retained on Eleonore and its cash in the bank are worth more than the entire market cap. All the exploration comes free.
“So you can buy a great company at below NAV. Despite the move up in the stock price in recent months, this is an excellent time to buy, ahead of this aggressive drilling campaign. We expect 2012 to be very good for Virginia and its shareholders.”
Best Stocks To Buy In 2012#22: Siga Technologies
by Dennis Slothower, editor Stealth Stocks
Last year for my favorite stock pick, I recommended IMAX which more than doubled. This year I would like to recommend Siga Technologies Inc. (SIGA), a bio-defense company that o”ers the same kind of upside potential for 2012.
In 2004, the US started an initiative called Project BioShield, which gave the government the right to purchase and stockpile vaccines and drugs to fight anthrax, smallpox and other potential agents of bio-terror.
SIGA is a leader in the development of pharmaceutical agents to fight potential bio-warfare pathogens and their ST-246 drug is considered to be the only known cure for smallpox, which the government is keenly interested in.
Recently, BARDA has stated their intent to award SIGA a $500 million contract, with options that potentially could be as high as $2.8 billion in orders. However, SIGA is being challenged in court by a competitor as being too big as a company to qualify for the government contract.
In fairness, BARDA has announced plans for a market survey to determine, whether there are any qualified small businesses with the capacity to produce an adequate supply of smallpox antiviral medication for the National Strategic Stockpile. It is unlikely that a small company will be able to meet the government’s needs as the drugs expire and need to be constantly replaced.
It is expected that SIGA will win this contract and if so investors could be rewarded with a double or triple in appreciation.
Top 5 Canadian Stocks To Buy For 2012
It's been a crazy year for the stock exchange and biotech shares were not immune, but if you are looking to choose biotech stocks for your portfolio, here are a few picks for small biotechnology and drug development companies that survived, some even showing overall growth, in the face of economic turmoil in 2012.
Top 5 Canadian Stocks To Buy For 2012:Canadian National Railway Company (CNI)
Canadian National Railway Company, together with its subsidiaries, engages in the rail and related transportation business in North America. It provides transportation for various goods, including petroleum and chemicals, grain and fertilizers, coal, metals and minerals, forest products, and intermodal and automotive products. The company operates a network of approximately 20,600 route miles of track that spans Canada and mid-America, from the Atlantic and Pacific oceans to the Gulf of Mexico. It serves the ports of Vancouver, Prince Rupert (British Columbia), Montreal, Halifax, New Orleans, and Mobile (Alabama), as well as metropolitan areas of Toronto, Buffalo, Chicago, Detroit, Duluth (Minnesota)/Superior (Wisconsin), Green Bay (Wisconsin), Minneapolis/St. Paul, Memphis, and Jackson (Mississippi), with connections to various points in North America. The company was founded in 1922 and is headquartered in Montreal, Canada.Advisors' Opinion:
- By Vodicka At 2011-10-29
Montreal-based Canadian National Railway (CNI) operates
about 21,000 route-miles of rail that span all the way from the frozen north down to the Mississippi Delta — nearly enough track to wrap around the entire world. Since Canada is one of the largest countries in the world by geography (second only to Russia with an area of about 4 million square miles), the transportation and freight industries are vital and very lucrative parts of the nation’s economy.
The reason I’m so bullish on CNI right now is that the company is a large player in transporting commodities, including Canada’s exports of timber and metals and imports of energy from the United States. In Canadian National’s latest earnings report in January, the company stated that Q4 shipments grew for coal, grain and fertilizers and petroleum and chemicals — and this is in spite of bad weather and a five-day strike that really messed with CNI’s schedule. Just imagine how CNI will do in the warmer months as the economy continues to improve.
Top 5 Canadian Stocks To Buy For 2012:Bank Of Montreal (BMO)
Bank of Montreal, together with its subsidiaries, provides a range of retail banking, wealth management, and investment banking products and solutions in North America and internationally. It offers personal banking products and services to consumers and small businesses, including deposit and investment services, mortgages, consumer credit, small business lending, and other banking services; and commercial banking products and services to small business, medium-sized enterprise, and mid-market banking clients comprising lending, deposits, treasury management, and risk management services. The company also offers cards and payments services; investment and wealth advisory services; self-directed investing services; private banking services to high net worth and ultra-high net worth clients; investment fund solutions across a range of channels; pension plans; investment management services; and creditor insurance, and life insurance and annuity products and services. In addition, it provides capital markets products and services, including equity and debt underwriting, corporate lending and project financing, mergers and acquisitions, restructurings and recapitalizations, balance sheet management, liquidity management, merchant banking, securitization, foreign exchange, derivatives, debt and equity research, and institutional sales and trading to corporate, institutional, and government clients. As of October 31, 2010, Bank of Montreal operated and maintained approximately 1,230 bank branches in Canada and the United States. The company was founded in 1817 and is headquartered in Toronto, Canada.Top 5 Canadian Stocks To Buy For 2012:Enbridge Inc (ENB)
Enbridge Inc. engages in the transportation and distribution of crude oil and natural gas primarily in Canada and the United States. Its Liquids Pipelines segment operates common carrier and contract crude oil, natural gas liquids (NGLs), and refined products pipelines and terminals. The company?s Gas Distribution segment distributes natural gas to residential, commercial, and industrial customers primarily in central and eastern Ontario, northern New York State, Quebec, and New Brunswick. Enbridge?s Gas Pipelines, Processing and Energy Services segment invests in natural gas pipelines, processing and green energy projects, and commodity marketing businesses, as well as performs commodity storage, transport, and supply management services. Its Sponsored Investments segment transports crude oil and other liquid hydrocarbons through common carrier and feeder pipelines, as well as transports, gathers, processes, and markets natural gas and NGLs; operates a crude oil and liquids pipeline and gathering system; and owns a 50% interest in the Canadian portion of Alliance Pipeline and partial interests in various green energy investments. The company was formerly known as IPL Energy Inc. and changed its name to Enbridge Inc. in October 1998. Enbridge Inc. was founded in 1949 and is headquartered in Calgary, Canada.Advisors' Opinion:
- By Louis Navellier At 2011-11-17
Enbridge Inc. (NYSE:ENB) is an energy transportation and distribution company separated into six segments: Liquids Pipelines, Gas Distribution, Gas Pipelines, Processing and Energy Services, Sponsored Investments and Corporate. Enbridge stock has gained 13% in 2011.
Top 10 Stocks NOT to Buy in 2012
It’s hard to believe, but the holiday season is upon us and there is only about a month and a half left in 2012. Because this is the busiest time of the year for investors like you, I thought I’d get out ahead of the New Year and I would give you 10 stocks that I think you should dump for 2012.
Some of these stocks have had a good run and some never really got anything going this year, but all are too risky if you’re looking to build a solid portfolio in 2012.
Let’s get right to this list of stocks you should sell or avoid as we close out 2012.Top 10 Stocks NOT to Buy in 2012
Some of these stocks have had a good run and some never really got anything going this year, but all are too risky if you’re looking to build a solid portfolio in 2012.
Let’s get right to this list of stocks you should sell or avoid as we close out 2012.Top 10 Stocks NOT to Buy in 2012
Top Stocks for 2012 - Bug Rings And Bug Gifts
Bug rings and insect display jewelry are extremely one of a kind types of jewelry that use real preserved insects as their key designs. Traditional jewelry is well known for combining beads, wood, metal, and precious stones to create amazing designs; bug jewelry throws those styles out and prefer scorpions and spiders instead. Children are rather enamored by the world they see around them in nature and are therefore sure to enjoy the concept of bug jewelry that brings bugs out of the dirt and into their jewelry. Kids are not the only individuals using these creative fashion accessories; many adults like the eclectic style they offer and are wearing them too.
Natural insect necklaces are usually crafted with a pendant featuring a bug that has been carefully encased in insect display case. There is no escape for the little creatures within the necklace pendants since their cases are made with an acrylic material that is extremely tough to damage. This acrylic is also perfect for the pendants since it is perfectly clear and allows you to observe the bug within at every angle. People everywhere are sure to ask about your necklace and gaze at the fascinating bug forever encased within your unique jewelry.
You can also find a wide variety of bug display bracelets which, much like their necklace counterparts, feature insects encased in clear acrylic. The insect display at the center of your bracelet can be matched with several different styles of bracelet, some of which are made from plastic, leather, or wood. Since the acrylic material that holds the insect in place is clear and very durable, you can even use a microscope on the specimen within your bracelet to get a better look at its every detail.
Apart from necklaces and bracelets, similar bug styled gifts and jewelry items exist too. Expect to give some people a surprise when wearing bug rings, since the insects inside sometimes appear to be climbing over your fingers. People interested in natural science and insect life will love frog! skeleto n paperweights and insect key chains that they can use in the home and on the go.
Not many area stores carry a good selection of insect display jewelry and bug rings since they are a specialty item. Internet based stores are the best places to shop for these unique items whether you want them yourself or plan on giving them as a gift.
Are you searching science, nature and Jewellery store with More? please visit at insect display or frog skeleton. Heartful credit is given to Chauncey J. Donaldson for his involvement for the subject validation.
Natural insect necklaces are usually crafted with a pendant featuring a bug that has been carefully encased in insect display case. There is no escape for the little creatures within the necklace pendants since their cases are made with an acrylic material that is extremely tough to damage. This acrylic is also perfect for the pendants since it is perfectly clear and allows you to observe the bug within at every angle. People everywhere are sure to ask about your necklace and gaze at the fascinating bug forever encased within your unique jewelry.
You can also find a wide variety of bug display bracelets which, much like their necklace counterparts, feature insects encased in clear acrylic. The insect display at the center of your bracelet can be matched with several different styles of bracelet, some of which are made from plastic, leather, or wood. Since the acrylic material that holds the insect in place is clear and very durable, you can even use a microscope on the specimen within your bracelet to get a better look at its every detail.
Apart from necklaces and bracelets, similar bug styled gifts and jewelry items exist too. Expect to give some people a surprise when wearing bug rings, since the insects inside sometimes appear to be climbing over your fingers. People interested in natural science and insect life will love frog! skeleto n paperweights and insect key chains that they can use in the home and on the go.
Not many area stores carry a good selection of insect display jewelry and bug rings since they are a specialty item. Internet based stores are the best places to shop for these unique items whether you want them yourself or plan on giving them as a gift.
Are you searching science, nature and Jewellery store with More? please visit at insect display or frog skeleton. Heartful credit is given to Chauncey J. Donaldson for his involvement for the subject validation.
Best Investment For 2012 - 3 Shocking Energy Trends That Should Scare Investors
Energy is the lifeblood of the global economy. Factories need energy to run, and goods need fuel to get shipped.
So it is wise for investors to keep an eye on trends in the energy sector as a way to gauge the status of the economic recovery — or, when trends are ugly, a sign that investors might be in for a bumpy ride.
There are a host of indicators and headlines relating to oil and energy consumption, but here are three recent reports I found that I think are particularly telling.
All three should set off warning bells, and investors should take note:
Diesel Consumption
The UCLA Anderson School of Management teams up with employment services firm Ceridian Corporation to track real-time diesel fuel consumption data. The pair’s most recent report shows an alarming decline in use of the key fuel.
Specifically, the “Pulse of Commerce Index” — that’s the official name for the diesel data — fell 1.7% in January following a 0.4% decrease in December. January’s figures are not just down month-over-month, but also off 2.2% from last year.
Click to Enlarge Most disturbing? The diesel index shows almost zero growth since the summer of 2010. Check out the chart.
“It seems difficult to square the behavior of the PCI with the evident improvement in a number of economic indicators, most notably the increase in payroll jobs and the decrease in initial claims for unemployment,” said Ed Leamer, chief economist for the index.
In short, something doesn’t add up.
This index is not a magic measuring stick. But diesel obviously is a crucial part of the national economy and a good proxy for rail traffic and truck traffic … and thus worth paying attention to.
Gasoline Deliveries
Click to Enlarge As with diesel, broader gasoline deliveries reflect the ebb and flow of the economy. Check out this chart about monthly total U.S. deliveries as measured by the U.S. Energy Information Administration:
This data is most interesting because it is raw. It is not “seasonally adjusted” or modified based on flash estimates and revisions. It is, for all intents and purposes, real demand.
The biggest takeaway? Retail gasoline deliveries are well below 1980 levels, with no sign of rebound, despite the fact that the recession is “over.”
Now, we have to consider that these are deliveries, not raw demand. So the phenomenon takes into account the general trend that gas stations are stockpiling much less than they used to — likely because margins are so tight and there isn’t a lot of cash on hand to tie up in inventories. Stations are not in the storage business at all these days.
But it’s hard to blame everything on a drop in inventories alone. In November 1983, gasoline deliveries were 51.1 thousand gallons per day. In November 2010, the total was 42.8 thousand gallons daily. Even more disturbing? Just a year later, in November 2011, they were 30.9 thousand gallons.
No Leaders in Alternative Energy
Click here to find out more!
Energy isn’t all about fossil fuels, cars and broad demand. So-called “green collar” jobs are part of what should be an emerging industry as alternative energy gains popularity and as Americans move toward cleaner sources of power.
Except there’s no money in green energy. So companies are going under and jobs are being eliminated, not added.
Take First Solar (NASDAQ:FSLR), the biggest U.S. solar company, which ousted its chief executive officer in October and still is seeking a replacement. Few people want the job, since FSLR stock has gone from over $310 per share in 2008 to a mere $40 right now. Earnings per share have fallen from $7.68 in 2010 to $5.80 in 2011 to a projected $3.93 in 2012. Not good for the heavyweight of U.S. solar.
Wind isn’t much better. At Vestas Wind Systems (PINK:VWDRY), the largest turbine maker, the chairman and finance director are leaving after the company cut sales forecasts twice in three months.
If there is trouble filling jobs in the corner office, that’s not very inspiring for rank-and-file employees.
Throw in the bankruptcy of Solyndra LLC, which left the U.S. government responsible for $527 million in debt, and things are ugly in alternative energy.
Just consider this telling quote from an alternative energy headhunter, trying to find leaders for these struggling companies:
“It’s becoming significantly more difficult to attract people into this market,” said a clean technology recruiter at Korn/Ferry International. “In my 15 years, this is probably the most difficult time to recruit.”
Jeff Reeves is the editor of InvestorPlace.com. Write him at editor@investorplace.com, follow him on Twitter via @JeffReevesIP and become a fan of InvestorPlace on Facebook. As of this writing, he did not own a position in any of the aforementioned stocks.
So it is wise for investors to keep an eye on trends in the energy sector as a way to gauge the status of the economic recovery — or, when trends are ugly, a sign that investors might be in for a bumpy ride.
There are a host of indicators and headlines relating to oil and energy consumption, but here are three recent reports I found that I think are particularly telling.
All three should set off warning bells, and investors should take note:
Diesel Consumption
The UCLA Anderson School of Management teams up with employment services firm Ceridian Corporation to track real-time diesel fuel consumption data. The pair’s most recent report shows an alarming decline in use of the key fuel.
Specifically, the “Pulse of Commerce Index” — that’s the official name for the diesel data — fell 1.7% in January following a 0.4% decrease in December. January’s figures are not just down month-over-month, but also off 2.2% from last year.
Click to Enlarge Most disturbing? The diesel index shows almost zero growth since the summer of 2010. Check out the chart.
“It seems difficult to square the behavior of the PCI with the evident improvement in a number of economic indicators, most notably the increase in payroll jobs and the decrease in initial claims for unemployment,” said Ed Leamer, chief economist for the index.
In short, something doesn’t add up.
This index is not a magic measuring stick. But diesel obviously is a crucial part of the national economy and a good proxy for rail traffic and truck traffic … and thus worth paying attention to.
Gasoline Deliveries
Click to Enlarge As with diesel, broader gasoline deliveries reflect the ebb and flow of the economy. Check out this chart about monthly total U.S. deliveries as measured by the U.S. Energy Information Administration:
This data is most interesting because it is raw. It is not “seasonally adjusted” or modified based on flash estimates and revisions. It is, for all intents and purposes, real demand.
The biggest takeaway? Retail gasoline deliveries are well below 1980 levels, with no sign of rebound, despite the fact that the recession is “over.”
Now, we have to consider that these are deliveries, not raw demand. So the phenomenon takes into account the general trend that gas stations are stockpiling much less than they used to — likely because margins are so tight and there isn’t a lot of cash on hand to tie up in inventories. Stations are not in the storage business at all these days.
But it’s hard to blame everything on a drop in inventories alone. In November 1983, gasoline deliveries were 51.1 thousand gallons per day. In November 2010, the total was 42.8 thousand gallons daily. Even more disturbing? Just a year later, in November 2011, they were 30.9 thousand gallons.
No Leaders in Alternative Energy
Click here to find out more!
Energy isn’t all about fossil fuels, cars and broad demand. So-called “green collar” jobs are part of what should be an emerging industry as alternative energy gains popularity and as Americans move toward cleaner sources of power.
Except there’s no money in green energy. So companies are going under and jobs are being eliminated, not added.
Take First Solar (NASDAQ:FSLR), the biggest U.S. solar company, which ousted its chief executive officer in October and still is seeking a replacement. Few people want the job, since FSLR stock has gone from over $310 per share in 2008 to a mere $40 right now. Earnings per share have fallen from $7.68 in 2010 to $5.80 in 2011 to a projected $3.93 in 2012. Not good for the heavyweight of U.S. solar.
Wind isn’t much better. At Vestas Wind Systems (PINK:VWDRY), the largest turbine maker, the chairman and finance director are leaving after the company cut sales forecasts twice in three months.
If there is trouble filling jobs in the corner office, that’s not very inspiring for rank-and-file employees.
Throw in the bankruptcy of Solyndra LLC, which left the U.S. government responsible for $527 million in debt, and things are ugly in alternative energy.
Just consider this telling quote from an alternative energy headhunter, trying to find leaders for these struggling companies:
“It’s becoming significantly more difficult to attract people into this market,” said a clean technology recruiter at Korn/Ferry International. “In my 15 years, this is probably the most difficult time to recruit.”
Jeff Reeves is the editor of InvestorPlace.com. Write him at editor@investorplace.com, follow him on Twitter via @JeffReevesIP and become a fan of InvestorPlace on Facebook. As of this writing, he did not own a position in any of the aforementioned stocks.
High Dividend Stocks For 2011
Go Global for Bigger Dividends, Growth
How is a prudent, conscientious person supposed to retire these days? The mutual fund industry tells you to invest in their low-dividend (or no-dividend) funds and hope the capital gains will be enough to carry you through. As we’ve seen in the past decade, though, the gains don’t always materialize when you need them. What then?High-dividend stocks. Rather than buying an index fund yielding only 1.8%, you should choose carefully among high-dividend stocks. And while there are dividend stocks on our own shores that may fit the bill, investors who are willing to look beyond our borders can find generous yields with greater growth potential.
Here are seven top global dividend stocks to buy:
High Dividend Stocks For 2011#1 – Cellcom Israel (CEL)
Recommended by: Richard Band, Editor, Profitable InvestingCellcom Israel (NYSE: CEL), Israel’s largest wireless carrier with 34% of the market, just declared its first quarterly dividend for 2011 — the equivalent of 85.7 cents (U.S.) per share. Annualized, that works out to a super-sweet yield of almost 11%!
CEL hands over virtually all its profits to shareholders as dividends, so there’s a chance the company may have to trim the payout in future quarters if business hits a speed bump. On the other hand, this “pay it all out” policy (similar to the approach taken by most U.S. master-limited partnerships) imposes rigorous capital allocation discipline on management. In short, Cellcom execs don’t waste money.
Buy dividend stock CEL on a pullback below $33.
High Dividend Stocks For 2011 #2 – Aberdeen Chile Fund (CH)
Recommended by: Bryan Perry, Editor, Cash MachineOne of my mega-themes for 2011 (and beyond) is the emergence of certain South American countries toward becoming developed nations. At the forefront of this movement, most would argue for Brazil, but within the past year, it has become evident that Chile might be the first to become a comparable neighbor to that of its northern counterparts, the United States and Canada.
Because many of the companies that thrive in the Chilean economy are not listed here in the United States, I find it suitable to embrace the Chilean investment theme with the purchase of the Aberdeen Chile Fund (AMEX: CH), a closed-end fund that has been a star performer in 2010. CH traded ex-dividend on March 29, and after hitting $23, it is now trading back down to support near $21 where a good entry point can be established while locking in a 9.61% dividend yield. Shares of CH should make their way back to $26. Buy CH up to $22.
High Dividend Stocks For 2011#3 – Telkom Indonesia (TLK)
Recommended by: Richard Band, Editor, Profitable InvestingThe mantra here is “free cash flow.” In recent years, Telkom Indonesia (NYSE: TLK), the dominant provider of both fixed-line and wireless communications in sprawling Indonesia, has poured huge sums into upgrading its networks. Now the company has the luxury of throttling back a bit.
Starting in 2011, each sales dollar (rupiah, actually) will generate more profit — along with a surge of cash that can be distributed to shareholders. I predict, in fact, that Indonesia’s largest telco will boost its dividend more than 30% by 2013 (from a 2010 base). That’s the kind of growth you want in retirement! Current yield, based on my estimate of 2011 dividends, is 4.8%. Buy TLK up to $36.
High Dividend Stocks For 2011 #4 – ING Asia Pacific High Dividend Equity Income Fund (IAE)
Recommended by: Bryan Perry, Editor, Cash MachineWe are witnessing the re-acceleration of the BRIC countries (Brazil, Russia, India and China) following a period of consolidated growth. The BRICs are enjoying renewed gross domestic product (GDP) expansion in the first quarter of 2011, especially China, and revving up for a strong year following a full six-month correction.
Pacific Rim countries will lead the way, making the ING Asia Pacific High Dividend Equity Income Fund (NYSE: IAE) an attractive buy after trading ex-dividend on April 1. With the stock sitting right on its 200-day moving average at $18.50, sporting a current dividend yield of 9.12%, it’s timely to pick up some shares. Buy IAE under $21.
High Dividend Stocks For 2011 #5 – CPFL Energia S.A. (CPL)
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It is a well-known fact that electricity consumption grows faster than the rate of growth of the economy. This is because as people build their wealth, they consume more. They buy bigger houses, they get more appliances and technology and such. Also, as industries enter a growth phase, they tend to use more power.
Because of the above characteristics, electric utilities in emerging markets are the first to see their businesses flourish. Brazil’s CPFL Energia S.A. (NYSE: CPL) distributes electricity to 6.4 million customers in about 570 communities, primarily in the states of Sao Paulo and Rio Grande do Sul. CPFL Energia also owns hydroelectric power plants and trades wholesale power in the open market and offers energy management services. Management estimates show that the company provides about 13% of Brazil’s electricity.
The company currently has a 6.9% dividend yield and should also benefit from a strong “currency tailwind” from the Brazilian real. The Brazilian real is a very strong currency as the central bank there maintains the highest real interest rates among major emerging economies. The shares offer a rare combination of both a high dividend yield and high growth rates, which makes them a great buy. Currently trading around $88, buy CPL on a pullback.
High Dividend Stocks For 2011 #6 – Telenor (TELNY)
Recommended by: Richard Band, Editor, Profitable InvestingWhy would you want to own a telco in Norway? For one thing, as a hedge against the ruinous financial policies of the U.S. government. Thanks to prudent management of the country’s oil revenues, Norway has run a budget surplus every year since 1995. The Norwegian currency (krone), in which Telenor (OTC: TELNY) reports its profits (and pays its dividends), is sounder than both the euro and the U.S. dollar.
But there’s more to this story. TELNY has expanded far beyond its Norwegian base, with mobile and broadband operations in Sweden, Denmark, central and eastern Europe, plus five Asian countries. As a result, little-known Telenor is one of Europe’s fastest-growing telecom businesses. Sales will likely pass $19 billion in 2011. Current yield: 4.2%. Dividends have nearly quadrupled over the past seven years. This year’s dividend amounts to only about half of TELNY’s estimated 2011 profits, so an increase of 10% or so seems probable when the board declares next year’s payout. Buy TELNY on a pullback below $49.
High Dividend Stocks For 2011 #7 – SeaDrill (SDRL)
Recommended by: Bryan Perry, Editor, Cash MachineSeaDrill Ltd. (NYSE: SDRL) is a unique opportunity for income investors seeking a pure play on deep-water drilling outside the post-BP spill in the Gulf of Mexico. The company was formed in 2005, and owns the most state-of-the-art drilling equipment in the entire industry that commands premium day rates. It is in big demand with utilization rates running near100% as big oil deposits become harder to find without going deep.
These guys operate all over the world in 15 countries on four continents, owning 54 rigs with exposure to only one rig in the Gulf of Mexico. Most of their drilling activity is off the coast of Norway and South Asia, so it has no exposure to the now unstable Middle East. However, news of ARAMCO in Saudi Arabia upping drilling production is hugely positive news for the oil and gas drilling sector. It confirms the belief that the worldwide drilling rig count will rise as well as day rates for the balance of 2011.
Shares of SeaDrill stand to trade significantly higher than its current price of $36.50, while paying a dividend yield of 7.5%. Buy SDRL under $40.
Best Energy Stocks To Buy in 2012
nergy stocks are the main beneficiary of rising oil prices. Their stock prices have been in an uptrend and this has been forcing short sellers to cover. We compiled the list of energy companies that are targeted by short sellers, but have been seeing a decline in short interest.
The companies in this list have at least 1% open interest and a minimum 8% decline in short interest over the past month. These stocks also have at least $1 Billion in market cap.
Best Energy Stocks To Buy:
The Best Energy Stocks To Buy in this list, Oceaneering International, is one of the largest holdings in Ken Fisher’s portfolio. T. Boone Pickens and Jim Simons are also bullish about OII. Boone Pickens also has MMR, PXP, WFT, and NOV in his portfolio. George Soros, Jim Simons, and Steve Cohen are among the hedge fund managers with Swift Energy holdings, which saw more than 20% decline in short interest over the past month.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
The companies in this list have at least 1% open interest and a minimum 8% decline in short interest over the past month. These stocks also have at least $1 Billion in market cap.
Best Energy Stocks To Buy:
| Company | Ticker | Short Interest (%) | Decline in Short Interest | Market Cap |
| OCEANEERING INTERNATIONAL | (OII) | 3.7 | -23.6% | $4.7B |
| SWIFT ENERGY CO | (SFY) | 6.8 | -20.9% | $1.8B |
| S M ENERGY CO | (SM) | 4.6 | -18.1% | $4.6B |
| STONE ENERGY CORP | (SGY) | 7.0 | -17.4% | $1.4B |
| PRIDE INTERNATIONAL INC DEL | (PDE) | 1.3 | -17.3% | $7.6B |
| PATTERSON U T I ENERGY INC | (PTEN) | 7.6 | -16.1% | $4.3B |
| NATIONAL OILWELL VARCO INC | (NOV) | 1.6 | -15.7% | $33.4B |
| FOREST OIL CORP | (FST) | 5.2 | -15.6% | $4.1B |
| FRONTIER OIL CORP | (FTO) | 6.4 | -15.1% | $2.9B |
| HOLLY CORP | (HOC) | 6.1 | -14.6% | $3.1B |
| E Q T CORP | (EQT) | 3.1 | -14.0% | $7.1B |
| ARCH COAL INC | (ACI) | 5.8 | -13.5% | $5.5B |
| HESS CORP | (HES) | 1.0 | -13.3% | $27.7B |
| BERRY PETROLEUM CO | (BRY) | 8.9 | -12.6% | $2.5B |
| PATRIOT COAL CORP | (PCX) | 8.4 | -12.6% | $2.2B |
| PLAINS EXPLORATION & PROD CO | (PXP) | 4.5 | -11.9% | $5.0B |
| SOUTHERN UNION CO NEW | (SUG) | 1.1 | -10.9% | $3.6B |
| MCMORAN EXPLORATION CO | (MMR) | 6.5 | -10.6% | $2.7B |
| ATLAS PIPELINE HOLDINGS L P | (AHD) | 7.8 | -9.5% | $1.1B |
| MASSEY ENERGY CO | (MEE) | 9.7 | -9.4% | $6.5B |
| OASIS PETROLEUM INC | (OAS) | 4.6 | -8.8% | $2.8B |
| CHEVRON CORP NEW | (CVX) | 1.1 | -8.6% | $211.2B |
| RESOLUTE ENERGY CORP | (REN) | 11.4 | -8.6% | $1.0B |
| PENN VIRGINIA RESOURCE PTNRS L P | (PVR) | 3.1 | -8.3% | $1.5B |
| WEATHERFORD INTL LTD NEW | (WFT) | 3.6 | -8.1% | $15.5B |
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
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