6 Stocks That Can Outperform Apple Shares

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Includes: AAPL, F, GNW, GT, KRO, VALE, XCO
by: Hawkinvest

Apple, Inc. (NASDAQ:AAPL) shares have provided tremendous returns for shareholders over the last several years. The stock traded for about $10 per share in 2004, and anyone who was fortunate enough to invest $10,000, less than a decade ago, is looking at a nest egg worth over $450,000 now. These kinds of gains are rare, and that is one of many factors that makes Apple such a storied company. There appears to be good reason to expect further gains, thanks to hot new products that Apple continues to roll-out. However, the company now has a market capitalization of over $400 billion and it's hardly the "undiscovered" $10 stock that is was less than 10 years ago.

While these shares can still provide extremely strong returns in the future, chances are that a number of other stocks will be able to outperform Apple shares going forward. The best time to buy Apple was back when expectations were low and the stock was extremely cheap. The companies below have very cheap valuations and low expectations right now. Apple investors have high expectations, and it could be hard for the stock to double in value, as it would give Apple a market value of nearly $1 trillion. That is a feat no company has yet accomplished. These stocks could easily double in value over the next couple of years:

VALE, S.A. (NYSE:VALE) is engaged in the mining and production of iron ore, steel, fertilizer and other basic materials. Many top investors and analysts believe that China's economy could be heading for a hard-landing. Since China is a major buyer of iron ore, this stock has been dropping and recently made new lows. However, China and the global economy are both showing some promising signs, and the U.S. economy is seeing some new strength in the job market. The basic resources this company provides will see increased demand in the future because of the constantly growing population. With the stock trading well below the 52 week high, and for only about 6 times earnings, this stock could easily double when the global economy is stronger.

Here are some key points for VALE: Current share price: $26.78 The 52 week range is $20.46 to $35.60. Earnings estimates for 2011: $4.50 per share. Earnings estimates for 2012: $3.94 per share. Annual dividend: 6 cents per share which yields .2%

Goodyear Tire (NYSE:GT) is one of the most famous makers of tires for cars, trucks and even aircraft. The company sells brand names that include Goodyear and Dunlop, and it operates about 1,500 auto service centers. This stock is very undervalued, partially due to concerns about pension expenses. The company has been reporting strong earnings and the estimates for 2012, already have factored in the pension expenses. Even with these issues, the company is still expected to earn almost $2.50 per share. The company might see weakness when earnings are next reported because some operations were disrupted when massive floods hit Thailand. It makes sense to buy any dips, because the Thai flooding will only have a short-term impact, and pension liabilities appear manageable. This stock should be trading much higher now, and a price target of $30 in the next couple of years is realistic.

Here are some key points for GT: Current share price: $13.86. The 52 week range is $8.53 to $18.83. Earnings estimates for 2011: $2.07 per share. Earnings estimates for 2012: $2.39 per share. Annual dividend: none

Ford Motor Company (NYSE:F) designs and manufactures top car brands such as Ford, Lincoln and Mercury brands. This stock traded around $18 per share in 2011, but the European debt crisis and overall market correction pushed the stock down considerably. There are many reasons to get into Ford shares now: The company did not take bailout funds from the U.S. Government. Ford has introduced well-designed models that are fuel efficient. Plus, the company has an excellent management team led by CEO Alan Mullaly. Automakers could see weakness from Europe in the coming quarters. If any short-term issues causes the stock to pull back, it makes sense to buy. This stock should be able to trade for $20 per share in the next couple of years.

Here are some key points for Ford: Current share price: $12.79. The 52 week range is $9.05 to $16.51. Earnings estimates for 2011: $1.46 per share. Earnings estimates for 2012: $1.70 per share. Annual dividend: 20 cents per share which yields 1.6%

Genworth Financial, Inc. (NYSE:GNW) provides long-term care insurance, mortgage insurance and other financial services. The company has been impacted by losses in the mortgage insurance division, but the company has been able to report profits recently in spite of the mortgage losses. Genworth appears to be strong enough to earn its way out of the currently weak housing market. This company is likely to report much higher profits in a couple years, and that should be enough to drive the stock closer to its book value, which is $33.15. This stock has jumped higher in the past few days, so wait for pullbacks before an eventual run over $20 per share. Here are some key points for GNW:

Current share price: $9.17 The 52 week range is $4.80 to $14.44. Earnings estimates for 2011: $1.27 per share. Earnings estimates for 2012: $1.82 per share. Annual dividend: None

Kronos Worldwide Inc., (NYSE:KRO) manufactures and markets specialty chemicals and coatings, primarily for industrial use. This stock was punished in the market slide over the past few months, but it is already starting to bounce back. Chemical stocks were unfairly punished, and when Eastman Chemical (NYSE:EMN) offered to buy Solutia (NYSE:SOA), investors and shorts realized the stocks had much more value than the current stock prices reflected. A stronger economy in the next couple of years should push earnings much higher, and this stock should be able to trade around $40 per share.

Here are some key points for KRO: Current share price: $24.34. The 52 week range is $14.16 to $34.50. Earnings estimates for 2011: $2.62 per share. Earnings estimates for 2012: $3.04 per share. Annual dividend: 60 cents per share which yields 3.5%

EXCO Resources, Inc. (NYSE:XCO) is a Texas-based oil and natural gas company. This company has projects in Texas, Louisiana and the Permian Basin, as well as others. This company has a solid balance sheet and a book value of $8.07 per share. Billionaire Wilbur Ross has been acquiring this stock through one of his investment companies "WL Ross & Co." This stock recently hit new 52 week lows as investors dump companies with natural gas assets. However, the selling seems overdone, and the stock is trading for about one-third of the 52 week high. In 2011, Exco management made an offer to buy the company for about $21 per share, which was not consummated. The company has also been the subject of takeover talk from other suitors as well. At this bargain level, the shares could see a strong rebound and possibly a renewed takeover attempt.

Here are some key points for XCO: Current share price: $6.98. The 52 week range is $6.80 to $21.04. Earnings estimates for 2011: 67 cents per share. Earnings estimates for 2012: 57 cents per share. Annual dividend: 16 cents per share which yields 2.2%

Apple, Inc. has a market capitalization of nearly $430 billion, making it the most valuable company in the world. It even beats number two ranked Exxon Mobil (NYSE:XOM), which has a market value of about $408 billion. Apple has a cash-rich balance sheet with nearly $100 billion. It also has a reasonable price to earnings ratio, so this stock can still provide great returns. However, it could be very challenging for this stock to double in the next couple of years, and that is why the other stocks here could have more upside than Apple.

Here are some key points for AAPL: Current share price: $459.68. The 52 week range is $310.50 to $460. Earnings estimates for 2011: $42.14 per share. Earnings estimates for 2012: $46.89 per share. Annual dividend: none

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

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