Looking for a shopping list of new top 10 stock ideas for 2010? Each year for 27 years, TheStockAdvisors.com has turned to the nation's most respected and well-known newsletter advisors and asked them for their single favorite stock or fund ideas for the coming 12 months.
With 10 advisors participating in this year's survey, there's something for every type of investor, from high quality blue chips to speculative home runs.
While past performance is never a guarantee of future results, we would note that the stocks chosen by the 75 advisors participating in last year's report outperformed the general market by nearly 80%.
Specifically, the 75 stocks and funds selected for our 2009 Top Picks report recorded an average year-to-date gain of 34%, versus a 19% gain by the broad market over the same period.
Gainer's Today tracks stock picks and ranks the accuracy of 120 investment research firms. As of 12/23/09, our 2009 Top Picks report was ranked #1 for the past year. Kudos to all the participating advisors.
The stocks and funds chosen for this report are the best ideas of the nation's top advisors at this current time. However, company fundamentals and market conditions change, and a stock that is considered a strong buy today can become a sell based on future events.
As always, we caution all investors to only use these ideas as a starting place for your own research and only buy top stocks that meet you personal investing criteria, risk parameters, and investment time horizon.
To keep updated on the ongoing favorite stocks of the leading advisors, please visit us daily at thestockadvisors.com, a free website that brings you the very best investment ideas of the nation's very best financial experts. You can also sign up for our Daily Digest and have each day's new stock ideas sent directly to your email.
We wish you the best of success for your investing in 2010!
AECOM (ACM): Geo?rey Seiler's top 10 stocks for 2010
"Our top pick for 2010 is engineering and construction (E&C) firm AECOM Technology (NYSE:ACM)," says Geo?rey Seiler.
In his BullMarket.com the advisor explains, "AECOM, unlike some better-known E&C names, o?ers a relatively low-risk business model. It performs no construction work at all and thus has none of the lump-sum, fixed-rate contracts that other companies might sign.
"The Los Angeles-based company focuses on a broad range of services that includes planning, design, environmental impact studies, project management, logistics and other jobs in the facilities, transportation, environmental, and energy and power segments.
"Transportation is the company's largest end market, representing 28% of the business, followed by environmental at 25%, facilities work at 24%, and Management Support Services (MSS), which delivered 17% of its revenues in fiscal 2009.
"Energy and power is the company's smallest segment, representing about 6% of its total revenues, but the company does view it as a growth opportunity. It is particularly strong in hydroelectric projects.
"The MSS business is 100% dedicated to working directly for the U.S. government, but government spending of all types -- either from federal state and local governments and foreign governments -- accounts for 70% of the company's revenue. The remainder comes from the private sector.
"AECOM has been under some pressure toward the end of the year, despite initially rallying following a strong fiscal Q4 earnings report in November. The culprit was some weak reports from fellow E&C firms and the Dubai debt debacle.
"However, AECOM isn't subject to the same type of energy sector cancellations that some other E&C companies experienced, and its exposure to Dubai is negligible.
"Impressively, AECOM is one of the few E&C firms to grow its backlog sequentially last quarter. Total backlog stood at a record $9.5 billion on September 30th, a 10% increase year over year and a 3% increase quarter over quarter.
"Meanwhile, AECOM is well positioned to be a beneficiary of increased government stimulus spending in 2010, as well as the possible passage of a substantial highway bill late next year.
"AECOM guided for fiscal year 2010 EPS to be in the range of $1.90 to $2.00. The midpoint of this range reflects 15% growth in earnings per share. We think the guidance is relatively conservative.
"In summary, we like AECOM's position in the marketplace, its consistent growth, and sound low-risk strategy. With a pristine balance sheet, trading at under 14x the midpoint of conservative guidance, and an over 15% expected 5-year growth rate, AECOM is undervalued and our top pick for 2010."
AOL (AOL): Bernie Schae?er's top 10 stocks for 2010
"AOL (NYSE: AOL), formerly America Online, is one of the most storied – and bloodied – names in the Internet sector," says Bernie Schae?er.
Referring to skepticism surround its early December spin-o? from Time Warner, the editor ofSchae?er's Research chooses AOL as his top pick for 2010, noting, "From a contrarian perspective, the current pessimism could have positive implications.
"AOL's merger with Time Warner in 2001 was hailed (by some) at the time as an innovative marriage of old and new media. But AOL's dial-up Internet access model was already under pressure by the time of the merger, and the AOL and Time Warner cultures never meshed.
"The merger is now regarded as one of the most disastrous in U.S. corporate history, losing more than $100 billion in market value. Steve Case, the deal's architect , resigned the chairmanship of the combined company two years later and left the board in 2005.
"Time Warner has been looking to rid itself of AOL ever since. So it was no surprise that Time Warner's spin-o? of AOL in early December 2009 was met with a heaping armful of skepticism.
"We have seen multiple media outlets weigh in negatively on AOL, perhaps an indication of how Wall Street is currently viewing the best stock to buy. In fact, the shares were initiated at 'underperform' by a major brokerage house in December.
"Moreover, Zacks reports that the stock has earned one 'strong buy' rating, one 'hold,'
and two 'strong sells.' Therefore, we view the upgrade potential on AOL favorably.
"But AOL, with a market cap of only $2.5 billion, argues that it remains a strong brand. Its 80-plus Web sites attract 100 million unique visitors each month. It still generates cash through its Internet access business.
AOL has a new management team led by former Google exec Tim Armstrong. Armstrong wants AOL to di?erentiate itself from competitors by creating original content. Yahoo, Google and others are largely aggregators of others' content ; AOL generates 80% of its own content.
"Although we emphasize that we are no in way comparing AOL to Google, the skepticism greeting the spin-o? is eerily reminiscent of what we saw around Google just prior to its initial public o?ering in 2004. hen the shares of GOOG quickly outperformed their low expectations, the bears quickly jumped on the stock's bandwagon, pushing it even higher.
"OL's shares so far are bucking the widespread pessimism as they hover above short-term support at the 23 level. From a contrarian perspective, this pessimism could have positive implications if skeptics succumb to better price action."
ETF (NYSE: BRF). The ETF remains our top stocks pick for 2010.
"Brazil, as its place on the cover of Economist magazine recently confirmed, was the flavor of the month in emerging markets. Brazil had recently won the right to host the Olympics in 2016, raising its profile much like the Beijing Olympics did for China. Investors were pouring in.
"Its currency, the real, gained 50% against the U.S. dollar since the prior December, with the economy firing on all cylinders, posting an 8%-10% growth in Q3. My forecast has been that, overall, Brazil's economy will grow by 5% in 2010.
"In December, the Inter-American Development Bank approved a $3-billion conditional credit line with Brazilian small and mid-sized businesses on Thursday.
Around 75% of the new jobs created in Brazil this year were created by small and mid- sized businesses.
"With the market already up 76.9% in local currency terms at the time, betting on Brazil was clearly a momentum play. That's also why I recommended a small cap ETF, which had outperformed its large cap ETF counterpart this year.
"Looking ahead, Brazil's biggest enemy is likely to be its own hubris -- getting too cocky for its own good. But before it does, I'm betting the market has further to go. After all, it went up almost 6-fold in dollar terms during its last bull run starting in 2003.
"This is the reasoning behind my recommendation for Market Vectors Brazil Small- Cap ETF. For a potentially bigger upside, I recommended the April $45 call options. For full disclosure, this is a position that I hold on behalf of my clients at Global Guru Capital."
ChemTrade Logistics (CGIFF): Roger Conrad's top 10 stocks for 2010
Roger Conrad, editor of The Canadian Edge, is a leading specialist in the niche investment area of high-income Canada-based trusts.
For his top investment idea for the company year, he turns to chemical company, ChemTrade Logistics (TSX: CHE-U, OTC: CGIFF).
"ChemTrade Logistics is a major producer of specialty chemicals, particularly sulphuric acid. It's also a Canadian income trust yielding over 12% with most of its operations overseas. That adds up to a unique triple play for investors in 2010.
"First, is the high yield, paid monthly. Even with the market for specialty chemicals chronically weak in 2009, Chemtrade was able to generate cash flow to cover its distribution by a healthy margin.
":Second, cash flow is set to surge as demand from industry rebounds for sulphuric acid. Second half results already show improvement and that trend is set to continue into the new year.
"Third, Chemtrade management expects to pay the same level of distribution in 2011, when Canada's trust tax kicks in. If it succeeds, investors will receive a windfall capital gain, since a big cut is already priced in.
"At a recent conference call, CEO Mark Davis stated 'the e?ect of the new tax would not be significant' since 'Chemtrade receives a large portion of its earnings from non- Canadian sources.
"Accordingly, in 2011 we believe that the new SIFT tax will apply to less than one-third of the Fund's income, resulting in an e?ective tax rate of less than 10 percent.' Buy ChemTrade up to $11."
China Adv. Construction: (CADC): Keith Fitz-Gerald's top 10 stocks for 2010
"China is spending $200 billion over the next few years to upgrade its rail system; and those new projects will be literally laying on a bed of cement,' says Asia expert Keith Fitz-Gerald.
The editor of The New China Trader adds, "This could lead to enormous growth potential for any cement company that Beijing involves in the
process -- such as China Advanced Construction Systems (NASDAQ: CADC).
"CADC produces and supplies specialized ready mixed concrete for use in all kinds of infrastructure projects including railways, roads, airports, bridges, tunnels, and dams. The company has already benefitted from over 9 new railway contracts from Beijing this year alone, totaling over $19.7 million.
"That may not sound like much, but realize that CADC is a small cap stock ($49.28 million market cap) so $19.7 million of new railway orders represents 39.9% of the company's total market cap. That means we could see CADC's earnings explode in 2010.
"In fact, if Beijing continues to pile money into railways, CADC could truly undergo some transformational events that lead to a double or more in 2010 – and more in the next few years.
"Meanwhile, China's massive $586 stimulus package has rocketed the Chinese economy back on track – and the result can be seen across the board from government sponsored infrastructure projects to consumer spending.
"By the end of 2009, the China is expected to have used 1.54 billion tons of cement on transportation infrastructure and logistics and warehousing projects, according to the country's top economic planning agency.
"In the transportation, logistics, and warehousing sectors alone, China is expected to have increased 2009 cement demand by 27% from the previous year, according to Guo Wenlong, a researcher with the Institute of Integrated Transportation, a?liated with the National Development and Reform Commission.
"China is literally building what amounts to an entire new country's worth of infrastructure and commercial projects.
"Economists are forecasting that China will use 40% of the entire global supply of cement in 2010. That basically makes China the world's largest construction site –something I see every time I am there.
"While concrete isn't sexy or glamorous, the industry's growth is far from boring. China's concrete market has maintained an average growth rate of 25% over last ten years.
"That adds up to a 931% compounded growth over the last 10 years. Compared to most investments, that sounds pretty glamorous to me.
As for its rail expansion, China plans on laying more track in the next five years than the rest of the world combined. That makes China's current railway plans the largest railway expansion in the last 100 years.
"The buttresses on which China's railway projects will be built are forecasted to require as much as 117 million tons of concrete alone – and that doesn't even begin to account for cement demand tied to China's other infrastructure projects.
"Basically all of China's growth, whether it's railways, roads, bridges, power-plants, dams, or commercial and residential real estate projects sit on a foundation of cement – and that means dynamic small-cap companies like CADC have plenty of room to grow and enormous profit potential moving into 2010 and beyond."
Dollar Tree (DLTR): Michael Vodicka's top 10 stocks for 2010
"Discount retailers are in high fashion right now, and 2010 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.
"2009 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 2009, 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 2009, 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 2010, 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."
Electronics Arts (ERTS): Karim Rahemtulla's top 10 stocks for 2010
"I've been tracking the companies I feel are best positioned to sustain the market's upward momentum into next year," says Karim Rahemtulla.
The options expert with Investment U suggests, "One such company is Electronic Arts (NASDAQ:ERTS) – a major player in the video game industry. ERTS is one of the largest creators and sellers of multi-platform content in the industry and it finally o?ered some guidance for the year ahead.
"Expectations for earnings for 2010 are 87 cents per share with revenues of $4.26 billion. EA came out and said that revenues should fall between 4.2 and $4.4 billion with earnings ranging from $0.70 to $1.
"That type of wide range never sits well with Wall Street, which likes much narrower ranges and more specific guidance.
"There are three reasons to buy EA now:
"First, share prices do not usually wait for numbers to come through before they move higher. They move higher in anticipation of better earnings ahead. This should happen after the company reports numbers for the first and second quarter of next year.
Second, if this economy and market are really recovering, one of the prime beneficiaries will be a company like EA, which is solidly in the consumer discretionary space.
"Third, EA has been the subject of many takeover rumors, specifically by the likes of Microsoft. Currently the shares are trading at $16.50 per share, down from highs of more than $50 just over a year ago. It is flush with cash, very little debt and a dominant market position.
"While a takeover would be the least likely outcome, there still is that chance and in the current climate of mergers and acquisitions, I wouldn't be surprised to see a bid made for EA.
"While shares themselves look to be a good buy, I prefer to play this one using the Electronic Arts January 2012 $20 LEAPs."
Vivo Participacoes: Bill Wilton's top 10 stocks for 2010
"Vivo Participacoes (NYSE: VIV), a Brazilian telecommunication company that provides cellular services, is my top investment pick for 2010," says Bill Wilton.
The growth stock strategist for Zacks.com, explains, "Analysts continue to raise full-year estimates for the company." Here's his bullish review.
"The company operates through a number of subsidiaries and is headquartered in Sao Paulo, Brazil. In November, VIVO reported third-quarter results that included over 2,000 more customers, up 16% year-over-year. Overall the company's market share is now just under 30%.
"Service revenues increased 4% since last year to R$3.8 billion. Higher revenues translated to a 154% increase in net profits, to R$636 million.
"There is not a regular flow of quarterly estimates for the company, but VIVO has received several upward revisions for full-year 2009 and 2010.
"Forecasts for this year are up 19 cents over the past 2 months, to $1.14. Next year's Zacks Consensus Estimate is now $2.11, up from $1.59, an 85% growth rate.
"VIVO is trading at attractive valuations, especially given the popularity of emerging markets. The forward P/E is about 17 times earnings with a PEG ratio of just over 0.5. Its price-to-sales ratio is above 1.3 times."
Vodafone (VOD): Amy Calistri's top s10 tocks for 2010
"Even in these di?cult economic times, people are upgrading their cell phones," says Amy Calistri, who selects Vodafone (NYSE: VOD) as her top pick for 2010.
The editor of Stock of the Month, adds, "Smartphone sales have been robust throughout the recession, as people want to access the latest technologies and features.
"Every one of those latest generation cell phones taps into a wireless service provider. And as essential as we consider it here in the U.S., cell phone service means everything to emerging and developing countries where landline infrastructure barely exists.
"Africa is actually the fastest growing wireless market in the world. With little landline infrastructure and an average population that is still some distance from computer ownership, cell phones have become Africa's link to the world.
"So where can you find a company that has the loyalty of the stable U.S. wireless market but also has inroads into the fast-growing African subscriber base?
""Vodafone is the largest wireless communications company in the world, with operations in Europe, the U.S., the Middle East, Africa, and Asia Pacific. Its owns a 45% stake in the largest U.S. wireless communications operator, Verizon Wireless.
"Along with its stable Verizon U.S. subscriber base, VOD also owns an interest in the growing base of African subscribers. Vodafone has a 65% stake in South Africa's Vodacom. Vodacom currently has 41.6 million subscribers, but that is expected to grow.
""I especially like dividend-paying stocks in challenging markets. After all, capital gains can ebb and flow, but cash in hand is yours to keep forever.
"Vodafone's dividend yield is approximately 6% at current prices. While other companies are throwing their dividends under the bus, VOD management seems committed to keep the income flowing.
"Vodafone has instituted a 'progressive' dividend policy that boosts the dividend based on rising free cash flows, even if earnings fall.
"And of course because the dividends are first determined in British pounds and then converted to U.S. dollars, a continuation of the U.S. dollar's declining value will boost the payout to U.S. investors."
Powershares US Dollar Bullish (UUP): Alex Green's top ETF for 2010
"When extreme valuations are accompanied by unbridled optimism or abject pessimism, it virtually always marks a turning point – and an opportunity; and this is no exception," says Alex Green, referring to the US dollar.
Here, the senior investment advisor to The Oxford Club and InvestmentU looks to PowerShares DB US Dollar Index Bullish ETF (NYSE: UUP) as a favorite idea for the coming year.
"We all know the dollar is in the cellar right now and also know why it is expected to continue right through the basement floor:
1) Massive budget and trade deficits
2) Ultra-low interest rates. (Zero on the short end.)
3) $59 trillion in unfunded liabilities for Social Security, Medicare and Medicaid.
4) Bernanke conjuring extra trillions out of thin air to buy Treasuries and mortgage- back securities and patch various holes in the U.S. economy.
"There is no reason to believe any of these problems will vanish in the months ahead.
Yet the dollar will soar in 2010. Why? Two reasons:
"First, all of the problems mentioned above are already well recognized and priced into the greenback. Second, dollar psychology is overwhelmingly bearish.
"Just as 10 years ago investors couldn't imagine internet top stocks for 2010 doing anything but soaring higher and five years ago they couldn't imagine real estate doing anything but barreling down the same one-way street, record lows for the dollar are coinciding with enormous confidence that the dollar has nowhere to go but down.
"Commentators seem to forget that all currency values are contingent. You can't just look at fundamentals here. You have to look at them abroad, too. And there isn't much out there right now that's terribly positive.
"In the third quarter, for example, the 16-nation euro-zone grew at a 1.5% annual rate. The U.S economy, by comparison, grew at 3.5%.
"European consumers and most business sectors are still feeling the pain from the deepest recession since the 1930s. The continent is likely to be the weakest region for global expansion next year, according to Julian Callow, chief European economist at Barclays Capital in London.
"The U.K. is no bastion of strength, either. Europe's biggest economy outside the euro zone is still in recession due to overly indebted British households and tight credit. British GDP contracted at an annualized 1.6% in the third quarter.
"How about Japan? It has its own problems. At 172% of gross domestic product, Japan's government debt is by far the largest among rich nations.
"The ratio is expected to reach 200% next year – and hit 300% within a decade. Rising social security costs and the weak economy are the primary culprits.
"The new government there is trying to prevent a double-dip recession by spending even more. But with government debt soaring to records, talk of new stimulus measures is already pushing up long-term rates and threatening to curtail the impact of fresh spending.
"Recognize that Europe and Japan are hardly experiencing heady economic growth and great fiscal probity. Most are bogged down economically and running fiscal deficits as bad as ours.
"And, personally, when the whole world is in this big a mess, I'll take the greenback over the euro, the pound or the yen. My bet is in 2010 so will most world currency investors.
"Virtually no one is expecting it, but the dollar is likely to climb 20% against the euro and the pound next year and 15% against the yen.
"Given that, shares of the PowerShares DB US Dollar Index Bullish ETF will appreciate in price, accordingly.
"Hedging is fine, of course, too. But if you have too much exposure to foreign-currency denominated bonds, CDs or bank accounts, rein it in."
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