I love this time of year! Family gatherings, Christmas music, holiday plays, decorations, and stock picks. Stock picks? Yes, 'tis the season for stock predictions! Virtually every financial writer will pen an article selecting his or her top stock picks for the upcoming year.
I enjoy reading them and the logic behind the picks. As a long-term buy and hold investor, generally most aren't useful for me; nevertheless, I find them entertaining and sometimes there is a gem to be found. Here are some picks for 2013...
In a Forbes article top securities analysts share their top picks for 2013:
Rajiv Jain, Virtus Emerging Markets Opportunities Fund says buy HDFC Bank (NYSE:HDB). The largest privately owned retail bank in India with a network of 1,986 branches in 996 cities across the country. EPS has grown at a rate of 26% per year, over the past 10 years.
Mohnish Pabrai, Pabrai Investment Funds says buy General Motors (NYSE:GM). With a market cap of under $38 Billion, cash on hand of $34 Billion and free cash flows expected to consistently exceed $10 Billion in 2013 and beyond, GM is ultra-cheap.
Mike Mayo, CLSA analyst says buy Morgan Stanley (NYSE:MS). There is a disconnect between the progress made by Morgan Stanley into a lower risk, wealth and asset manager (now half the company) and a stock that trades at over a one-third discount to its tangible book value.
The Motley Fool's Dan Caplinger sees a tale of two recoveries in 2013. Some of the companies expected to see earnings rebound next year are those that have had the most trouble bouncing back from the recession and the Panic of 2008, and because of that laggard performance, the success they're finding now is amplified on a percentage basis as earnings start to rise more substantially. But other companies on the list hit the ground running as soon as the recession ended and have seen their growth accelerate over time. He thinks these Dow Stocks are primed for 2013:
Bank of America (NYSE: BAC) has taken plenty of steps to try to boost earnings, including its sale of inefficient non-core assets as well as implementing an expense-cutting program that could save the company $8 billion annually.
Alcoa (NYSE: AA) is another down-and-out stock with growth potential. After having seen Alcoa get beaten down this year, analysts are hoping for the aluminum giant to triple its earnings next year.
John Buckingham, portfolio manager for the Al Frank Fund (VALUX) in a The Street article believes stocks have performed exceptionally well this year in the face of overwhelmingly negative sentiment, and that's a positive sign for the markets heading into 2013. Here are a few of his picks:
As broad diversification is a central tenet of our investment philosophy, we can never label just one stock as our favorite. Sorry about that. That said, a few that are top of mind right now, in alphabetical order, are Archer-Daniels-Midland (NYSE:ADM), Corning (NYSE:GLW), CSX Corp (NASDAQ:CSX), Freeport-McMoran Copper and Gold (NYSE:FCX), Hasbro (NASDAQ:HAS), MetLife (NYSE:MET) and Total (NYSE:TOT).
Finally, Value Stocks Guide listed 62 dividend stocks for 2013. In an effort to build a well diversified income portfolio, they pick the top dividend paying stocks in their respective industries as defined by valuation, yield, dividend growth and dividend coverage (ability to pay the dividend without dipping into vital working capital). Here are the 10 highest yielding stocks on their list (click the link above for the full list):
|PFBI||PREMIER FINANCIAL BANCORP INC||4.50%||1.92%|
|CNAF||COMMERCIAL NATIONAL FINANCIAL CORP||4.38%||5.39%|
|WU||WESTERN UNION CO||3.92%||65.72%|
|SBSI||SOUTHSIDE BANCSHARES INC||3.78%||16.29%|
|LARK||LANDMARK BANCORP INC||3.56%||5.00%|
As always, be sure to do your own due diligence and determine if any of these stocks fit in your portfolio before buying. Today's choices just may help determine how well you live in retirement.
Disclosure: No position in the aforementioned securities. See a list of all my dividend growth holdings here.