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Business/Finance See other Business/Finance Articles Title: 12 Best Stocks to Buy Now Medscape: We asked experts with successful long-term records in the investment business to recommend 12 stocks that could do very well over the next 3-5 years.* On top of their expected price increases, many of these stocks pay strong dividends, which essentially means you're earning money while you wait for them to appreciate in value. Remember that buying individual stocks is riskier than owning a mutual fund, which spreads risk over dozens or hundreds of companies. If you're interested in a particular stock, research it further or call your financial advisor or broker to discuss it. Bank of America (BAC) Why it's a good bet: The resurgence in housing, along with economic recovery (albeit slow), will benefit Bank of America's consumer lending and investment business. Still, prepare for a bumpy ride. Bank of America will continue to suffer "headline risk": the chance that a news story will negatively affect a stock's price. "This risk," says Peter Jun, an investment analyst with Altfest Personal Wealth Management in New York City, "will include mortgage-related litigation, financial regulations reform, and stricter capital reserve requirements, but because the markets hate uncertainty, it creates a good opportunity for long-term investors." Sandstorm Metals & Energy (SND) Why it's a good bet: Sandstorm, a Vancouver, British Columbia-based company, finances projects related to natural gas, copper, palladium, and other resources. In exchange for capital, Sandstorm receives a contract that allows it to purchase a percentage of the commodity at a fixed price. If these cash flow guarantees fall flat, however, "Sandstorm can seize the underlying assets of the company," says Jim Roumell, president and lead portfolio manager of Roumell Opportunistic Value Fund, which gained 18.1% in the 12 months ending January 31. "This unique structure is like a stock in that the investor can profit from the commodities, but also like a bond because Sandstorm can make a claim on the underlying assets. Wells Fargo (WFC) Why it's a good bet: Wells Fargo notes that it does business with 1 in 3 US households and has 9000 locations and 12,000 ATMs worldwide. The San Francisco-based company offers a range of financial products, from traditional banking services to investments, insurance, and commercial real estate financing. "Although the income statement has suffered from the low interest rate environment we're in, Wells Fargo's unique business model -- which leads me to think of it as not simply a bank -- helped the company turn in a solid fourth quarter, with earnings exceeding analysts' expectations," says John Buckingham, chief investment officer at Al Frank Asset Management in Aliso Viejo, California. Buckingham adds that expected higher interest rates will help bolster the company's margins. Tetra, a diversified oil and gas services company that also makes money from decommissioning (closing down) wells, is in a prime position to boost its earnings. It has a 25% share of the overall decommissioning business. "This is a great opportunity to cheaply invest in a company with excellent management, a long history of profitability, and a strong balance sheet," says Ted Crawford, research analyst and co-portfolio manager of Roumell Opportunistic Value Fund. Natural gas prices are expected to rise, which can enhance your chances of doing well with Tetra, he adds. Total SA (TOT) Why it's a good bet: "Total" is an apt name for this French company, which is involved in all aspects of oil and gas production, from exploration and extraction to refining and marketing. Its peers include big players in the industry, such as BP, Chevron, ConocoPhillips, Exxon Mobil, and Lukoil. While the company has shown that it can hold its own in a very competitive industry, Buckingham has been especially impressed with its "ability to successfully operate in perceived 'risky' regions -- such as Russia and parts of Africa, to name a few." Total, he adds, also has some "overlooked" chemical operations that are turning the corner in terms of profitability and will help further boost the company's already solid bottom line. Aéropostale (ARO) Why it's a good bet: This popular clothing retailer has very strong cash flow, which should enable it to ride out the current double whammy of high gas prices and high unemployment among its largely teenage demographic (23.4% as of January, or roughly 3 times the national average). With more than 1000 stores around the world, the ubiquitous Aéropostale brand hasn't suffered from kids' fickle loyalties and remains strong, thanks in part to management's decision to close some underperforming stores. That strategy, along with lower cotton prices, should ensure "a modest recovery in margins, which should be all that's needed for the stock to go to $20 a share," Crawford says. Kohl's (KSS) Why it's a good bet: Even though the ravages of Hurricane Sandy held back sales a bit in 2012, Kohl's maintains a strong balance sheet and sports a current dividend yield of 2.8%. "We like that Kohl's sales mix is diversified and that the company has made a lot of headway increasing sales of higher-margin private and exclusive brands, which now make up one half of total sales," says John Buckingham, who says the Wisconsin-based retailer is "aggressively expanding" into the South and West. He expects the stock price to increase by close to 70% in the next 3-5 years. Corning (GLW) Why it's a good bet: No longer just your grandmother's bakeware, Corning's glass technologies are found in televisions, computers, semiconductors, and handheld devices. Its "Gorilla Glass" is touted as being less brittle, tougher, and more scratch-resistant than glass made by competitors. "Gorilla Glass has been gaining momentum lately and has a lot of potential to grow in such products as cell phones and tablets," Buckingham says. "We feel that the company will continue to progress nicely, particularly in the telecom and specialty materials business, as the economy improves." Hewlett-Packard (HPQ) Why it's a good bet: Hewlett-Packard is undergoing a structural shift, the same way that IBM did in the 1990s, from hardware producer to services and software provider. HP is aggressively cutting costs and writing off some losses to reduce its net income, and thus its tax burden. The company also has plenty of cash flow, which allows it to offer investors a solid dividend yield -- currently at 3%. President and CEO Meg Whitman, a former key executive during eBay's rise, adds value to the company, says Altfest's Peter Jun. "Whitman has a strong track record in managing capital and knows how to grow a business through acquisitions, something HP has historically done very poorly." American Safety Insurance (ASI) Why it's a good bet: The insurance industry has been beaten down for the past several years, with returns on equity near historical lows. As a result, "the insurance cycle is primed for a rebound," says Jim Roumell. The prospects for American Safety Insurance (ASI), which serves small- and medium-sized businesses, look especially good, he believes. "The company's CEO, Stephen Crim, is a former actuary who understands risk and has skillfully diversified the company's exposure to it over the past several years." ASI shares currently trade at a discount to their book value, which makes the stock a good choice for bargain hunters. General Electric (GE) Why it's a good bet: GE is worth close to a quarter-trillion dollars and has an enviable record on dividends, boasting a payout each quarter for more than 100 years, according to its Website. The key to GE's success is diversification: The company is involved in everything from consumer electronics and appliances to personal healthcare products and financial services. Some divisions report record-high backorders for certain goods. The finance arm, GE Capital, is a leader in lending to large companies worldwide. "GE Capital," Jun says, "is well positioned to benefit from the growth in emerging markets and the global economic recovery. Still, I think GE's industrials business will grow faster than its finance business." Navios Maritime (NM) Why it's a good bet: Because it offers a generous dividend (6.5%), Navios Maritime pays you handsomely while you're waiting for its stock price to increase. And that rise should occur over the next few years, Buckingham says, thanks to a strong and expanding fleet of ships that transport key commodities, such as iron ore, coal, and grain. Although it's a small company, currently valued at $379 million, Navios Maritime is set to expand into emerging markets, which bodes well for its earnings and long-term prospects. Stock recommendations and comments presented on Medscape are solely those of the analysts and experts quoted. They do not represent the opinions of Medscape on whether to buy, sell or hold shares of a particular stock. Investors should be cautious about any and all stock recommendations and should consider the source of any advice on stock selection. Various factors, including personal or corporate ownership, may influence or factor into an expert's stock analysis or opinion. All investors are advised to conduct their own independent research into individual stocks before making a purchase decision. In addition, investors are advised that past stock performance is no guarantee of future price appreciation. Poster Comment: Market is at a record high. Not a good time to buy. But picks may be good in a "correction." In the last one I picked up GE for around five; now in the 20's. Post Comment Private Reply Ignore Thread
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