These 6 Stocks Are Poised To Rebound Sharply In 2012

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 |  Includes: BAC, CSCO, FCX, HPQ, INTC, MSFT
by: Hawkinvest

Things look bleak. No doubt many investors have given up on the stock market and the ones who haven't yet probably have thought about it. Most investors find investing to be frustrating and scary at times. However, when things are this tough and people are this negative it can often be a signal to buy stocks. A recent CNBC article discusses the current state of the markets and the outlook for the future. The article gives hope for recovery in 2012, after the dust settles in 2011 and it states:

World stock markets will recover next year from a nightmarish 2011 that has wiped trillions of dollars off share prices, according to a Reuters poll that showed almost all major stock indexes ending 2011 in the red.

The article continues with this positive view for 2012:

The survey also suggested strong gains lie ahead on some rich-world bourses, with bourses in the United States, Australia, France, Germany and Japan expected to yield double-digit returns from now until mid-2012.

Read the entire article here.

I believe that the markets will see continued volatility and that we could see another great decline (buying opportunity) later this year, especially if the European debt crisis spins out of control. However, once the crisis is resolved either through a hard default in Greece or through a "soft default" and well organized plans to limit contagion, the markets should be able to move higher in 2012. The markets hate uncertainty, and the European debt crisis is giving the global markets massive uncertainty, which will eventually play out. Here are a number of stocks that could see sharp rebounds into 2012:

Intel Corporation (NASDAQ:INTC) is a leading maker of chips used in notebooks, netbooks, desktops, mobile phones, consumer electronics devices, etc. This company has a rock-solid balance sheet, sells for only about 8 times earnings and pays a dividend that beats most bonds and other income investments. A number of chip stocks have recently warned that earnings would be lower than expected, so I would wait for Intel to release earnings before taking a significant position.

Here are some key points for INTC:
Current share price: $22.21
The 52-week range is $18.77 to $23.96
Earnings estimates for 2011: $2.36 per share
Earnings estimates for 2012: $2.47 per share
PE Ratio: about 8
Annual dividend: 84 cents per share, which yields 3.7%
Microsoft Corporation (NASDAQ:MSFT) is a leading maker of computer software and hardware products as well as consumer products like the Xbox. Microsoft has a huge cash position on their balance sheet. The stock pays a strong dividend and trades for just about 8 times earnings. Microsoft recently raised the dividend and the payout could continue to rise in the future.
Here are some key points for MSFT:
Current share price: $25.45
The 52-week range is $23.32 to $29.46
Earnings estimates for 2011: $2.87 per share
Earnings estimates for 2012: $3.18 per share
PE Ratio: about 8
Annual dividend: 80 cents per share, which yields 3.1%

Bank of America (NYSE:BAC) is a banking and financial services giant. This bank is facing challenges with mortgages and foreclosures and the stock has recently sold off on concerns of a double dip. With bank stocks trading below book value in many cases, and the sentiment so negative, this could be the classic buy low opportunity. I believe that if Bank of America were to allow the Countrywide division to file for bankruptcy, the stock would rise significantly. The bank is taking steps to shed non-core assets and boost profits. It also just announced plans to charge customers $5 per month for using debit cards, read more on that here.
Here are some key points for BAC:
Current share price: $6.35
The 52-week range is $6 to $15.31
Earnings estimates for 2011: loss of 31 cents per share
Earnings estimates for 2012: profit of $1.20 per share
PE Ratio: about 5.5 times 2012 earnings
Annual dividend: 4 cents per share, which yields .6%
Hewlett Packard (NYSE:HPQ) is a leading technology company with an extremely diverse range of products and services, which include printers, computers, tablets, software, consulting and other business solutions. This stock has been in a downtrend and hit a new 52-week low recently. Now, HPQ is trading at a price-to-earnings ratio of about 5. With earnings of nearly $5 per share expected for each of the next two years, this company will earning nearly half the current share price just in the next 24 months. That is a sign the stock is way too cheap.
Here are some key points for HPQ:

Current share price: $23.78
The 52-week range is $21.50 to $49.39
Earnings estimates for 2011: $4.84 per share
Earnings estimates for 2012: $4.87 per share
PE Ratio: about 5
Annual dividend: 48 cents per share, which yields 2%
Cisco Systems, Inc. (NASDAQ:CSCO) is a leading networking hardware company. Goldman Sachs sees new hope for Cisco shares and recently upgraded the stock to a buy from neutral, setting a $21 price target. The Goldman analyst believes that Cisco is "at the beginning of a multi-quarter upward estimate revision cycle,” and that estimates are too low. Read more details on the Goldman analysis here. Cisco shares appear to have put in a solid bottom and in time are likely to rise powered by improving fundamentals, a low valuation as well as an improving chart for those that follow technical analysis.

Here are some key points for CSCO:
Current share price: $15.85
The 52-week range is $13.30 to $24.60
Earnings estimates for 2011: $1.71 per share
Earnings estimates for 2012: $1.81 per share
PE Ratio: about 8
Annual dividend: 24 cents per share, which yields 1.5%

Freeport-McMoRan Copper and Gold (NYSE:FCX) is a leading exploration and mining company seeking to produce resources like gold, silver, copper, cobalt and other minerals. Copper prices can be very volatile and have been dropping because it is widely used in construction. China is a large consumer of copper and recent concern about the Chinese economy has also impacted this stock. In the long run, demand should rebound and prices for gold and silver remain strong. With this stock trading at about 5 times earnings and half off of the 52-week high, it looks like a good time to start buying.
Here are some key points for FCX:
Current share price: $31.34
The 52-week range is $30.64 to $61.35
Earnings estimates for 2011: $5.91 per share
Earnings estimates for 2012: $6.11 per share
PE Ratio: about 5
Annual dividend: $1 per share, which yields 2.9%

Data sourced from Yahoo Finance. No guarantees or representations are made.

Disclosure: I am long HPQ, CSCO, BAC, MSFT.

Disclaimer: Hawkinvest is not a registered investment advisor and does not provide specific investment advice. The information is for informational purposes only. You should always consult a financial advisor.