- Barron's top 10 stock picks for 2014 shows an affinity for low P/E ratios, with 6 of the group sporting multiples of 10 or lower. The 2013 picks - which are up 35.2% on average, 900 bps ahead of the S&P 500 - had five names with single-digit P/Es. This year's list:
- A depressed play on a depressed commodity, don't be surprised if Barrick Gold (ABX) gets the attention of an activist investor next year.
- Up just 11% YTD, Canadian Natural Resources' (CNQ) free cash flow is set to quintuple to $5B in 2018 once the Horizon oil-sands facility expansion is completed.
- A rising world population needs food. At less than 10x earnings, Deere (DE) is the kind of company Warren Buffett might like to buy if it became available. "Stranger things have happened," writes Andrew Bary.
- Even after gaining 55% YTD, MetLife (MET) sells for less than 10x 2014 EPS and just above book value, but bigger gains are ahead once the company is given regulatory permission to buy back stock and boost its dividend. Met's also a good hedge against rising rates, as life insurers will benefit by having higher yields to invest in.
- The rest: Citigroup (C), GM, Intel (INTC), Nestle (NSRGY, NSRGF), Simon Property (SPG), U.S. Airways (LCC).
Barron's top picks for 2014
Dec 7 2013, 10:30 ET