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Ken Fisher is bullish on stocks. In an article for Forbes, Mr. Fisher pointed out that the fourth year returns of bull markets have averaged 20% in the past and he expects this year to be no different. His advice is to buy now before the market realizes that there no crisis in Europe. He recommended 5 stocks for capitalizing on the predicted bull market. In this article I will briefly discuss each recommended stock and perform relative valuation to evaluate whether investing in these companies makes sense at current levels.

Cameron International (NYSE:CAM)

Cameron International is a $14.07 billion company by market capitalization and provides oil and gas blowout preventers, flow control valves and other oilfield service products. The company recently released its fourth quarter earnings of $0.77 a share (excluding charges) compared to last year's Q4 EPS of 0.66. Revenues were up 12% in the quarter and 13% for the year, and the company ended with an order backlog of $6 billion which should provide some visibility to future earnings. The company is attempting to expand its deepwater services. With the Obama administration ending the offshore drilling ban, the demand for the company's blowout preventers should increase in the near future as new drilling permits are issued.

Analysts expect the company to grow at an impressive annual rate of 20% beating the projected 15% growth rate of the industry during the next 3-5 years. Applying my estimated P/E of 21 to 2012 EPS of $3.29, my initial 12-month price target for CAM is $69 a share. A return of 21% is possible from current levels.

Baxter International (NYSE:BAX)

Baxter is a diversified healthcare company with a market capitalization of $32 billion. The company leads the market in recombinant products for hemophilia patients, antibody therapies and regenerative medicine. The company does not have any long term debt and has improved its net margins over the last 3 years.

In my opinion the greatest potential for growth for Baxter exists in the plasma therapies business which is part of the BioSciences unit. Analysts expect the firm to increase its earnings at an annual rate of 9% compared to the 12% growth rate of the previous 5 years. My price target of $68 is obtained by applying a multiple of 15 to 2012 EPS estimate of $4.54. Including dividends (2% yield), a return of 21% is possible from current levels.

Illinois Tool Works (NYSE:ITW)

ITW is a global manufacturer of a wide of range of industrial products. One of its better known products is Permatexs's Dr. Bond superglue. The company derived approximately 60% of its revenues from outside the US. I expect the international contribution to revenues to increase in the future fueled by the rapid growth in Brazil, India and China. The company has a solid ROE of 21% compared to its 3 year average ROE of 16%. Additionally, debt level is moderate and manageable.

ITW is projected to increase its earnings at an annual rate of 12% which is modestly lower than the projected 17% growth rate of the industry. The stock has been flat over the past 1 year. I do not see potential for significant upside from current levels. My price target of $58 is obtained by applying a P/E ratio of 14 to 2012 EPS estimate of $4.14. The stock last traded as $56 a share. Although the company has solid fundamentals, I would wait to open a position in ITW.

Dow Chemicals (NYSE:DOW)

This Midland, MI based company is the second largest chemical manufacturer in the world and provides chemical, plastic and agricultural products and services. The company derives about 63% of its revenues from outside the US. The company acquired Rohm & Haas in 2009 for $16.2 billion and was able to gain a strong footing in the specialty chemicals market. Like ITW, future growth at DOW will be led by the emerging markets. The company is in the process of building a manufacturing unit in Saudi Arabia to strengthen its business in that part of the world.

The company's earnings declined at an annual rate of 15% during the last 5 years. Going forward, analysts project a growth rate of 10% over the next 5 years. Applying my P/E estimate of 13.5 to calendar year 2012 EPS estimate of $2.72, my 12-month price target of $37 is obtained. The stock last traded at $34. I would look to open a position in DOW at $28 a share. The stock did provide a respectable dividend yield of 3%.

Xilinx (NASDAQ:XLNX)

XLNX is a $9.56 billion company by market capitalization and is engaged in the development, design and marketing of programmable logic chips and related development system software. The stock is up 14% year to date slightly higher than the 12.5% return of the tech heavy NASDAQ index. The company operates in a rapidly changing technology business which requires heavy investments in R&D. The company has done a good of managing margins and has consistently reported ROE and margins in excess of industry averages.

Analysts expect the company to grow at an annual rate of 9%, slower than the projected 15% growth rate of the industry during the next 3-5 years. Applying my estimated P/E of 16.4 to 2012 calendar year EPS of $1.99, my initial 12-month price target for XLNX is $33 a share. The stock last traded at $36. I would avoid XLNX at these levels.

As always, please do not consider this list as a "buy" list, rather use this list as a starting point for your research. Of the companies listed above, I find BAX and DOW particularly attractive based on fundamentals and growth prospects.

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

Source: Ken Fisher's Stocks For 2012 Bull Market: 4 To Buy, 1 To Avoid