Posted: 16 month(s) and 4 days(s) ago   |   0 Comment(s)   |   Rating: 0 0
Posted by: WallStNick

With all the uncertainty in today's economy, many investors look at the stock market like a leper colony.

But there are a lot of very sound opportunities in the stock market for investors to make money.

Here's a list of the Top 10 Stocks for 2009, as first reported by MSN Money senior markets editor, Jim Jubak:

The 5 best stocks for the first half of 2009

• Deere (NYSE: DE), a farm machine producer that tracks the price of agricultural commodities. Yield: 3.1%. 

• Enbridge (TSX: ENB), a natural-gas and oil pipeline company that has a 3.8% yield.

• ExxonMobil (NYSE: XOM), the world's best integrated oil company for the current environment. With a yield of 2%, these shares just make my cut.

• Flowserve (NYSE: FLS). Can you say infrastructure? It makes pumps and valves for moving everything from water to oil and has a yield of 2%.

• Rayonier (NYSE: RYN), a producer of wood products and an owner of timberland. Yield: 7.2%.

The 5 best stocks for the second half of 2009

• Goldcorp (NYSE:GG), the world's low-cost producer of gold.

• Google (Nasdaq: GOOG), the dominant Internet search company just gets more dominant.

• HSBC (NYSE:HBC), the best banking franchise left standing in Asia.

• Petrobras (NYSE: PBR). The Brazilian national oil company has dozens of new fields under development.

• Thompson Creek Metals (TSX: TC), the second-largest private producer of molybdenum in the world.

Here are a few words from Jubak's article on how and when to invest in these stocks:

 My selection of the 10 best stocks for 2009 -- and my strategy for when to invest in them -- is designed to help you do three things:

• Make some money (although not a lot of money) in the first half of the year.

• Get you into position for a rally in the fall.

• Make sure your portfolio is ready for 2010, when the economy itself is likely to be in recovery mode and the major long-term trends driving the global economy will be your key to market-beating returns.

Always thinking ahead

Stock prices are built on anticipation. The market indexes had been falling for months before we got the initial gross-domestic-product numbers in October showing the economy had started to contract in the third quarter. And stocks have kept falling since then as investors have anticipated that the economy would contract even more -- maybe at an annual rate of 4% or 5% -- in the three months that end in December.

Anticipation of an end to the recession and an economic recovery will start stocks moving up again well before the recession is actually over. The historical record shows that stocks start to recover, on average, about two quarters (or six months) before an economic recession ends.

In other words, if the U.S. recession ends in the fourth quarter of 2009 or, more likely, in the first quarter of 2010, then we can expect stocks to rally starting in the summer or fall of 2009.

Timing is tricky

Timing the turn can't be exact. There's the risk of being early. The U.S. economy could struggle for longer than I now expect, and stocks could linger at low levels into 2010.

But there's also a risk of being late. If the bottom for the Chinese economy is in the second quarter of 2009, as Goldman Sachs now projects, then the global economy would start to pick up before the fourth quarter of 2009, and stocks would be likely to rally earlier than the fall of 2009.

So 2009 presents quite a strategic challenge.

In the first half -- or even three-quarters -- of 2009, you'll need to play defense. (But you don't want to be completely on the sidelines, just in case growth in China does bottom in the second quarter.) That means losing as little money as possible as stocks continue to founder while picking up a few percentage points of return here or there.

In the first part of 2009, I'd be very happy with anything like a 5% return from a stock portfolio. (Why not just stick it in supersafe Treasury bills or notes, you ask? Have you seen the yield on T-bills lately? It's as close to zero as you can get.)

Then toward the end of the year, move more of your portfolio to offense, without taking on a huge risk in case your timing is off. We know from the end of other bear markets that the first months of a bull market can produce explosive returns. But bear markets are notorious for producing final rallies that pull investors in and then fail, sending the early birds reeling to yet more losses.

Building a core

So what kind of stock picks could possibly work in that kind of uncertain and labyrinthine market? I'd suggest these 10 culled from the 50 in my new book, "The Jubak Picks." (I'll post the full list of 50 when the book comes out Dec. 30. This long-term portfolio will replace my existing 50 Best Stocks in the World list. You'll be able to find a link to it near the top in the left margin of every column, just under my 12- to 18-month portfolio.)

Why did I pick these 10 from the 50 in my book to be my best picks for 2009?

First, these stocks offer what I'd like to see now and for the next six to nine months: safety, a modest dividend return of at least 2% to 4% and some upside leverage if the global economy delivers a positive growth surprise. And second, they offer what I'd like to see for later: exposure to the most timely of the 10 long-term macro-investing trends that I describe in my book. (You can find a list of these 10 trends in my Oct. 21 column, "10 trends for long-term gains.") By buying these stocks, I start creating the core of a long-term portfolio for the five years or more after this bear market.

Use some cash to ease your way into positions in the five stocks in my picks for the first half of 2009 on dips in the stock market. Look for a stretch of days when the Standard & Poor's 500 Index is sitting near 840, which looks like a bottom for this stage of the bear at least.

Or you can also start to dollar-cost average into these stocks. That's an especially useful method if you are a beginning investor starting a portfolio.

Don't rush into investing all your cash. Remember this is still a high-risk bear market. And you want to have cash on hand to invest in my best stocks for the second half of 2009 when the time is right in the fall.

If you're a beginning investor or have moved all your cash to the sidelines, I'd suggest buying at a pace that puts about 25% of the cash that you ultimately want to devote to stocks into the market by mid-2009.

How to rebalance

If you're already invested, as I am in Jubak's Picks, I suggest rebalancing your existing portfolio using these dividend-paying stocks to replace other stocks in the sector that don't pay you to wait. If the stock allocation of your portfolio is already 50% or more in the market, I wouldn't recommend increasing that commitment to stocks now.

I've got Jubak's Picks at almost 50% in cash as of Dec. 16. That means I've got just 50% of my stock portfolio actually in stocks. (I run an all-stock portfolio on these pages. You, I assume, have some money in other instruments, such as bonds. I'm writing here only about the stock portion of your portfolio.) And I'm trying to keep my cash position at roughly that level even as I shift the portfolio to take advantage of the current opportunities in the market.

Think about gradually putting another 25% of your cash to work in the fall -- if it looks like the economic scenario that I outlined at the beginning of this column is working out as projected. Increase that buying if the recovery seems nearer than the end of 2009 -- or if we get a major "buy" signal from technical indicators. Hold off or slow down your buying if the economy sinks deeper and faster than economists currently project. Remember this second group of five stocks isn't designed to pay you to wait.

Don't try to hit a home run in 2009. You're likely to wind up whiffing. A solid single or two, maybe even a double, would be enough to turn 2009 into a better year for you than just about anybody expects right now.

Read the complete article here. 

At the time of publication, Jim Jubak owned or controlled shares of the following companies mentioned in this column: Deere, Enbridge, Flowserve, Goldcorp, Petrobras, Rayonier and Thompson Creek Metals. He did not hold short positions in any company mentioned.

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Posted: 27 month(s) and 5 days(s) ago   |   5 Comment(s)   |   Rating: 0 0
Posted by: WallStNick

Shares of Apple (AAPL) hit $200 on Wednesday for the first time despite lower than expected holiday retail sales.

People are hooked on Apple products, and chances are they will be for quite some time--just as long as Apple keeps innovating.

Apple's new products also yield higher margins for the company through lower memory costs. Analyst Shelby Seyrafi has a $225 price target on the stock. "Apple has a lot of momentum right now," he told the Associated Press.

There isn't any reason Apple won't hit Seyrafi's price target.  

The Company posted revenue of $6.22 billion and net quarterly profit of $904 million, or $1.01 per diluted share. These results compare to revenue of $4.84 billion and net quarterly profit of $542 million, or $.62 per diluted share, in the year-ago quarter. Gross margin was 33.6 percent, up from 29.2 percent in the year-ago quarter. International sales accounted for 40 percent of the quarter’s revenue.

“Apple ended the fiscal year with $15.4 billion in cash and no debt,” said Peter Oppenheimer, Apple’s CFO. “Looking ahead to the first quarter of fiscal 2008, we expect revenue of about $9.2 billion and earnings per diluted share of about $1.42.”

Apple shipped 2,164,000 Macintosh® computers, representing 34 percent growth over the year-ago quarter and exceeding the previous quarterly record for Mac® shipments by 400,000. The Company sold 10,200,000 iPods during the quarter, representing 17 percent growth over the year-ago quarter. Quarterly iPhone™ sales were 1,119,000, bringing cumulative fiscal 2007 sales to 1,389,000.

With this kind of consistent growth, there's no reason why you, too shouldn't love Apple to the core.

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Posted: 29 month(s) and 1 days(s) ago   |   12 Comment(s)   |   Rating: 0 0
Posted by: WallStNick

Sirius Satellite Radio, Inc. (Nasdaq: SIRI) cut its third quarter loss to $120.1 million, or 8 cents per share, from $162.9 million, or 12 cents per share a year ago. Revenue for the quarter rose 45 percent to $241.8 million, but fell short of Wall Street's expectations of 244.3 million.

 The New York-based company finished the quarter with 7.7 million, and added 524,938 new subscribers during the quarter--a 50 percent boost over the year ago period.

 Seems like things are looking up for Sirius, largely due to Howard Stern, exclusive rights to broadcast NFL games, and deals with auto makers including BMW, DaimlerChrysler and Ford.

The company has also said that it hopes to close a merger with rival XM Satellite Radio Holdings, Inc. (NYSE: XMR) by the end of the year. If the deal goes through, the combined company would have roughly 14 million subscribers.

The problem for satellite radio companies, however is churn--how many members is each provider losing, and does the addition of new subscribers offset ones that have fallen off?  Monthly churn for Sirius edged up to 2.1 percent, from 2 percent a year ago. That's 161,700 members a month--nearly 31% of what the company added in the entire third quarter.

 Just wondering what people think of Satellite Radio. Is it a flash in the pan, or is it here to stay? Owning a Sirius radio myself, I can honestly say that listening to free radio has become painful. The content offered on Satellite Radio is far superior than anything that's free.

 The only question that remains is does the merit of the content (which is basically all they have) justify the monthly subscription price of $12.95?

 Any thoughts?

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