Bryan Kautzman

Ten Stock Picks for 2009

Of the stocks you mention:

IMAX would need to show it can turn a profit before I'd be willing to invest. Sure, the future looks promising, but the current fundamental analysis tells me to stay away.

JNJ: Yes, I am long on JNJ. They are a predictable company. As far as pharmaceuticals go, I also like PFE (and am long in PFE). To the best of my knowledge, PFE is the only large cap pharmaceutical company that is currently investing in stem cell research.

HANS: I have been long on HANS for some time, but I have to say....it's somewhat of a coward's choice to take Wall Street's best performing stock of the last ten years and put it on your list. I sold 10% of my holding last week to recoup my initial investment.

ATVI: P/E ratio of 165. I could not recommend this stock with a clear conscience.

MO: I can't argue against this one except for my belief that the cigarette industry is evil. Moral obligations keep me from dumping money into a company that had me hooked for decades. You'll probably make a nice profit here, but I'd rather go elsewhere.

DNDN: Definitely a speculative stock, and I'm not much interested in speculation. I like to invest in companies that have shown some penchant for making a profit. The way I look at it is that picking growth companies is like playing the lottery. The odds are against you, and it takes some luck, but it pays off big if you hit.

GLW: I took a quick 50% profit in GLW from December to January, and that is normally not my method of investing. I just needed to recoup some losses in a hurry, and GLW was my method. That said, the fundamentals on this company are solid right now, and I'm looking for a spot to get back in. They have almost $2 per share in cash on hand, and substantially more cash than long term debt. With a stellar P/E ratio, this is one that I'm also recommending for 2009. My target price is about $9.50 per share.

DE: I think there is some risk involved here, but I must also say that our local John Deere dealerships are being over-inundated with orders right now. 2008 was a good year for farmers who locked in futures at all time highs in the spring, and they are spending their money on equipment in time for the growing season. However, I also think that DE, along with similar companies like CAT, will peak before the growing season starts. I am long in CAT, but looking for a place to sell.

MPEL: Another speculative stock that needs to prove that it can turn a profit before I'll recommend it.

RIG: This play tries to combine to badly beaten down sectors into a single stock. While dividend darling FRO was my number one stock of 2008, being I had the sense to get out while the price was still over $45 per share, both of the sectors these companies play into have been eaten alive. Namely, we're talking the shipping sector and the oil sector. Meanwhile, I am preferring to vest my interests in these two industries on mutual funds since almost all of the companies involved are bound to outperform in 2009. For oil, I have a position in DIG as well as a lesser position in the heavily leveraged DXO. For the shipping industry, I am watching the ETF SEA, though have yet to make a purchase (anyone know of any other shipping ETF's?).

As far as my recommendations for 2009 go, take a look at the following:

KHD: Chinese construction company that specializes in concrete and coal. While not directly impacted by Obama's infrastructurial stimulus package, they will likely see an impact on demand worldwide. Plus, they are currently trading lower than cash value.

NTE: This is another Chinese stock that is trading lower than cash value. Plus, I can envision a future where Apple's iPhone has competition that sells for half the price.

AKS: The steel industry was hit particularly hard, and they should also see a nice recovery as a result of Obama's stilumulus package. I like AKS the best not only because of their stellar balance sheet, but also because they have a pseduo-monopoly on United States core steel.

OTTR: Cramer can't seem to make up his mind, but OTTR is one of the biggest wind energy players in the United States. Plus, they are a utility company, so they tend to be relatively stable.

WFC: If there is one financial that is going to survive this mess, WFC will be the one. Personally, I think they are a stellar business because back in 2005/2006, they were steering people away from sub-prime loans and directing them to more stable alternatives.

WMI: An increasing dividend plus a service that people need equals a stock that doesn't involve much risk.

TRN: Play the rails, play wind, and play Obama's infrstructure plans all at the same time. TRN has a stake in the construction of railway cars, road and railway parts, concrete, and the construction of wind towers.

GLW and HANS would be mutual picks. Please be advised that I hold long positions in each of these companie except GLW and KHD.