Some Stocks to Research for the Market Rebound

The VIX journeyed into the 70's last week. The SPY bounced off support in the $82 - $85 area. The Fed and the Treasury are both taking positive steps to stabilize the markets. Even the housing market showed solid results with a rise in the number of houses sold (albeit at lower prices). Citi dropped its suit to stop WFC from taking over Wachovia. This all tends to make one think there is a near term rebound in the making. If this in fact happens, what stocks do you want to be in? Below are some of my choices:

Solar stocks:

1. LDK (PE = 7, FPE = 4, PEG = .16). It has long term contracts covering virtually all of its production for 2008 and 2009. It has many contracts extending far beyond that that are "take or pay". It is building its own polysilicone plant (a source of cheaper polysilicone). It is one of the leaders in making UMG polysilicone solar (a much cheaper alternative to multicrystalline solar). It should be relatively unaffected by the worldwide downturn. It should be relatively unaffected by the oversupply problem in the solar industry predicted by GS. It has good margins, which should rise in the near term. These factors should all help it weather both of these storms. It is poised to go up.
2. Canadian Solar (CSIQ) (PE = 10, FPE =3, PEG =.15). It has been growing its production and its margins. It is one of the leaders in UMG polysilicone solar. This should help CSIQ in the solar shake out that GS is projecting.

Fertilizer stocks: We still have to eat. The potash market looks especially strong. The three stocks I like best in this area are:

1. Potash (POT) (PE = 14, FPE = 4, PEG =.73)
2. Mosaic (MOS) (PE = 5, FPE = 2.7,PEG = .36)
3. Intrepid Potash (IPI) (PE = 38, FPE = 4, PEG = N/A)

Coal Stocks: China will start buying coal with a vengeance soon. They are continually opening up coal power plants. Some coal stocks you might consider are:

1. James River Coal Company (JRCC) (PE = N/A, FPE = 2.46, PEG = N/A).
2. Massey Energy (MEE) (PE = N/A, FPE = 3, PEG = .16).
3. Alpha Natural Resources (ANR) (PE = 19, FPE = 2.3, PEG =.68).
4. Cleveland-Cliffs (CLF) (PE = 7, FPE = 2, PEG = N/A). This company bought ANR. It is mostly a steel company. But it is great at that too. It has been beaten down too much.

There are many more coal companies that are deserving of your attention. I just have not mentioned them here.

Shippers: These have really taken a bath lately. They have a lot of room to go up. China should start shipping in more coal soon.

1. DryShips (DRYS) (PE = .88, FPE = 1.6, PEG = .01). This stock was over $100 not very long ago. It likely has hit rock bottom with this latest downturn. It should bounce. The story is much the same for the other shippers I have listed below.
2. Excel Maritime (EXM) (PE = 1.2, FPE = 1.6, PEG = .07).
3. TBSI International (TBSI) (PE = 1.5, FPE = 1.4, PEG = .12).
4. Navios Maritime (NM) (PE = 1.3, FPE = 2.5, PEG = .15). This company bought a fleet to service South Amercian rivers, etc. This should start adding into the profits in late Q3 and Q4. The company should do well.

Oil Service Stocks: These shouldn't be as subject to oil price declines as oil producers. Yet they have been beaten down badly anyway. Further the promise of more offshore drilling in the U.S. in the near future seems very real these days. That prospect should help the companies I have listed:

1. Transocean (RIG) (PE = 4, FPE = 4, PEG = .31)
2. Diamond Offshore (DO) (PE = 8.6, FPE = 5.5, PEG = .25)
3. Noble Corp (NE) (PE = 4.8, FPE = 3.4, PEG = .21)
4. Atwood Oceanics (ATW) (PE = 7.4, FPE = 4.2, PEG = .22)

Other Top Performers:

1. Flowserve (FLS) (PE = 8.8, FPE = 6.6, PEG = .64). It has its own niche. It is a market leader. Everyone loves it.
2. Joy Global (JOYG) (9.7, FPE = 6.5, PEG =.62). Most expect mining equipment makers to continue to do well. It has been beaten down with the rest of the market.

Good luck with your investing. I hope this list helps some of you.

Disclosure: Long MOS, POT, LDK, CSIQ.