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After surveying the carnage that was 2008, it's necessary to regroup and have a game plan for the coming year. The temptation to wait on the sidelines is great - after all, the losses in some sectors have been tremendous. But investors who sit this year out could be forfeiting some of the strongest gains of their career.

A healthy amount of cash is probably wise for all but the most aggressive accounts to start out this year. Some short positions are also in order as not every sector will rally over the coming months. But there are a few trends that I believe that any opportunistic investment account should consider.

The alternative energy theme will likely come back to the forefront. This is a function of both the new administration's policies, as well as an inflationary environment which makes traditional energy sources more expensive. Secondly, infrastructure plays will be in focus as Obama has made it clear that nearly $1 trillion will be plowed into this area. Investors will be better served buying small infrastructure names with more room for growth than large headline names. Third, the shipping industry will not roll over and die. We should see some sharp rebounds and while it may take years to reach the highest levels seen over the past year, the stocks are now at very attractive valuations. Finally, medical technology will continue to perform well as an aging population and a higher standard of living requires more health care service of a higher quality.

In consideration of all four of these trends, I have outlined a stock in each category that I think will outperform during the current year:

  1. JA Solar Holdings (NASDAQ:JASO)
    Alternative energy is set to be a hot item in the coming year. The sector has been absolutely decimated during the second half of 2008 due to lower traditional energy prices and the financial crisis. Low oil prices makes it more difficult for solar energy to compete. But as raw material costs come down and technology helps manufacturers become more efficient, solar will once again be a viable alternative. The credit crisis made it difficult for solar manufacturers to increase production. But firms are finally beginning to see light in this area and find alternative means for getting jobs done. Finally, the Obama administration has made alternative energy a top priority and will likely add billions in stimulus packages to support the industry. JA Solar should be a strong beneficiary of rising trends in this area.
  2. AECOM Technology Corporation) (NYSE:ACM)
    Infrastructure is another sector that will garner much attention. As billions are spent on construction projects, bridges, roads and more, AECOM will generate a significant amount of new business. The company is large enough to be recognized as a top tier contractor and will be invited to bid on most every competitive job. But at the same time, this company is small enough to be able to support growth over the coming year. The company has a significant backlog of signed contracts, so any new business will simply be icing on the cake. The stock is trading at a healthy multiple which shows the market has confidence in the prospects. But I believe this multiple could see significant expansion over the next 12 months.
  3. TBS International (NASDAQ:TBSI)
    Investors in shipping stocks reacted fearfully to the global recession. Day rates have dropped sharply, cutting into profits and in some cases requiring shippers to take a loss in order to charter vessels. TBSI was one of the more aggressive companies in the business, operating primarily on spot rates instead of locking customers into long-term contracts. This strategy helped the company produce record profits during 2007 and early 2008 because day rates were out of sight. The aggressive business decision also caused huge pain when day rates plummeted. The company is expected to see 2009 earnings drop 71% from 2008 levels and the stock certainly shows this pessimism. My expectation is that any unexpected news will be positive for this company since the market is pricing in only negative occurrences. If we see any recovery at all in this sector, TBSI should rebound sharply!
  4. China Medical Technology (CMED)
    In its most recent quarterly report, ChinaMed announced that it would be selling its HIFU tumor therapy business line. While the market reacted somewhat negatively to the news, the business decision is likely going to allow the company to operate with stronger margins over the coming year. The remaining diagnostic business is very well respected and growing rapidly across China. Management is talented at finding and integrating new business lines and it would not surprise me if another big acquisition was made in 2009. The balance sheet appears to be under control with a manageable amount of debt, and the stock is now trading for less than 10 times expected earnings for this year. The future looks bright for China Medical!

These four stocks have strong fundamentals and should show significant gains over the coming months. In fact, subscribers to the ZachStocks Growth Model will likely be trading all four of these names from time to time. Please take a look at the model as I believe this could be a valuable tool as you manage your investments this coming year.

Disclosure: Long CMED, TBSI, ACM, JASO

Source: Four Stocks for 2009