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Ken Fisher is the author of seven money management books, three of which are New York Times bestsellers. He's been writing the Portfolio Strategy column for Forbes for more than 26 years, and he's the fourth-longest running columnist in Forbes' history. He's currently ranked #252 on the 2010 Forbes 400 list of richest Americans. He founded private investment firm Fisher Investments in 1979. In 2010, Forbes published an accounting of Fisher's stock picks made in his columns over the preceding 14 years. His stock picks beat the S&P 500 (NYSEARCA:SPY) overall on average. Ken Fisher's picks lagged the S&P 500 in just three years within the last 14 years. His picks in 2009 outperformed the S&P 500 index by 24 percentage points. The outperformance in 2010 was 5 percentage points.

The best-performing stocks in the market are usually the highest-growing stocks or the stocks with the highest expected growth rates. This doesn’t mean that one should be invested in growth stocks and stay away from the value stocks at all times. Historically value stocks managed to beat the growth stocks hand over fist. The reason is simple. Value stocks are beaten down stocks with very low or negative growth expectations. Not surprisingly it is easier for these stocks to beat the expectations on the average. On the other hand, everybody is extremely bullish about growth stocks and expect them to have higher growth rates in the future. Their stock prices also reflect this fact. Not surprisingly, it is more difficult for these stocks to beat these challenging expectations.

We ranked Fisher’s stock picks based on their expected five-year growth rates. The data are sourced from Yahoo Finance. Contrarian investors should look into the stocks that are at the top of the table.

Company

Ticker

Value (x1000)

Forward PE

Exp. 5-Year Growth Rate

YTD Return

SANOFI AVENTIS

SNY

592567

7.37

1.07

6.5%

EXXON MOBIL CORP

XOM

584109

8.38

5.20

0.9%

JOHNSON & JOHNSON

JNJ

713482

11.96

5.32

2.7%

UNILEVER N V

UN

503182

12.76

5.85

4.4%

OCCIDENTAL PETE

OXY

518582

8.65

8.40

-18.7%

A B B LTD

ABB

537217

9.24

10.74

-20.0%

UNITED TECH

UTX

554980

11.87

11.87

-8.6%

ORACLE CORP

ORCL

672886

11.29

12.54

-4.4%

P P G INDUSTRIES INC

PPG

583155

10.29

12.70

-11.2%

NATIONAL OILWELL VARCO INC

NOV

549439

10.32

12.90

-10.7%

GENERAL ELECTRIC

GE

590765

9.81

13.08

-13.0%

APPLIED MATERIALS

AMAT

524880

10.82

13.36

-22.2%

DOVER CORP

DOV

520476

10.01

14.72

-13.1%

E M C CORP MA

EMC

601969

13.02

15.88

-3.4%

SCHLUMBERGER LTD

SLB

702642

11.62

15.92

-22.9%

GLAXOSMITHKLINE

GSK

500073

11.02

15.97

12.4%

AMAZON COM INC

AMZN

516111

70.01

17.86

20.2%

BAIDU INC

BIDU

590120

27.03

33.79

21.2%

SIEMENS A G

SI

864004

9.21

35.42

-20.6%

Sanofi S.A. is a multinational pharmaceutical company with its headquarters in Paris. It returned 6.48% since the beginning of this year. It has a market cap of $88.29 billion and a forward P/E ratio of 7.37, and is expected to grow at a rate of 1.07% over the next five years. Fisher invested $593 billion in SNY shares. Warren Buffett had over $160 million invested in SNY shares at the end of June. D.E. Shaw doubled his position in SNY during the second quarter.

Exxon Mobil Corporation is an American multinational oil and gas corporation. It returned 0.86% since the beginning of this year. It has a market cap of $89.5 billion and a forward P/E ratio of 8.38, and is expected to grow at a rate of 5.20% over the next five years. Fisher invested $357.66 billion in XOM shares. Jim Simons and D.E Shaw also had over $200 million position in XOM shares.

Johnson & Johnson is an international American pharmaceutical, medical devices and consumer packaged goods manufacturer founded in 1886. It returned 2.66% since the beginning of this year. It has a market cap of $173 billion and a forward P/E ratio of 11.96, and is expected to grow at a rate of 5.32% over the next five years. Fisher invested $713 billion in JNJ shares. Warren Buffett had over $2.8 billion position in JNJ shares. Ray Dalio increased his position in JNJ by 12-fold.

Unilever is a British-Dutch multinational corporation that owns many of the world's consumer product brands in foods, beverages, cleaning agents and personal care products. It returned 4.38% since the beginning of this year. It has a market cap of $89.80 billion and a forward P/E ratio of 12.76, and is expected to grow at a rate of 5.85% over the next five years. Fisher invested $503 billion in UN shares.

Occidental Petroleum Corporation is a California-based oil and gas exploration and production company with operations in the United States, the Middle East, North Africa, and South America. It lost 18.66% since the beginning of this year. It has a market cap of $62.79 billion and a forward P/E ratio of 8.65, and is expected to grow at a rate of 8.40% over the next five years. Fisher invested $519 billion in OXY shares. Ken Griffin increased his position in OXY by 143-fold.

ABB is a Swiss-Swedish multinational corporation headquartered in Zürich, Switzerland, operating mainly in the power and automation technology areas. It lost 19.97% since the beginning of this year. It has a market cap of $40.42 billion and a forward P/E ratio of 9.24, and is expected to grow at a rate of 10.74% over the next five years. Fisher invested $537 billion in ABB shares.

United Technologies Corporation is an American multinational conglomerate headquartered in the United Technologies Building in Hartford, Connecticut. It lost 8.59% since the beginning of this year. It has a market cap of $64.94 billion and a forward P/E ratio of 11.87, and is expected to grow at a rate of 11.87% over the next five years. Fisher invested $555 billion in UTX shares. Bill Miller had over $54 million position in UTX shares.

The Oracle Corporation is an American multinational computer technology corporation that specializes in developing and marketing hardware systems and enterprise software products – particularly database management systems. It lost 4.42% since the beginning of this year. It has a market cap of $150.88 billion and a forward P/E ratio of 11.29, and is expected to grow at a rate of 12.54% over the next five years. Fisher invested $673 billion in ORCL shares. Ken Griffin also had over $20 million position in ORCL shares (see billionaire Ken Griffin’s top stock picks).



Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Source: Billionaire Ken Fisher's Stock Picks With The Highest Upside Potential