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Stock Picks for the Baklava Bailout

With the market tone improving, I have been working on my Greek “Baklava Bailout” plan. Something has got to be announced either Friday or Monday.

I have been lostock screens and doing some analysis to see what kind of stocks I can cautiously and selectively pick up here.

What do I look for in screening stocks? Generally I look for stocks whose price/earnings ratios are cheap relative to Return on Equity (ROE), or their growth rate, or preferably, both at the same time. In other words if a company has an ROE of 30 and is growing 30% a year, but the P/E is 15, that’s a cheap stock.

Some of these stocks are redundant to my “Portfolio,” but many have gotten even cheap since the beginning of the year, so I will add to them.

Company Symbol Market Cap ROE 5-yr          growth P/E   (forward)   Categorization
Microsoft MSFT 245B 41% 10% 13   Tech, value, d
Apple Computer AAPL 178B 32% 39% 19   Tech Growth
Sybase SY 3.3B 18% 8% 15   Tech Growth
Gulfmark Offshore GLF 636M 12.90% 26% 9   Energy

Apple is starting to get real cheap. The market is either pricing in financial Armageddon or Steve Jobs’ head exploding. It has billions of cash, a new product, a 30% growth rate, and a P/E under 20. Haven’t seen it this cheap in a while.

Disclosure: Long AAPL, MSFT, SY, GLF

Disclosure: Long AAPL, MSFT, SY, GLF