Top Stocks For 2012: Gafisa (GFA)
By Paul Goodwin
"My pick for the top stock of 2012 is Gafisa (NYSE: GFA), a Brazilian homebuilder and developer," says emerging markets specialist Paul Goodwin.
In his Cabot China & Emerging Markets Report, he explains, "This is an experienced growth company in a country with an excellent economic engine." Here's the advisor's review.
"Gafisa has been growing fast and has a huge future.
"Brazilian interest rates have been coming down and the middle class is growing―up 24% in just the last four years―which will boost demand for housing.
"Gafisa reported a 358% surge in earnings in Q3 on a 128% jump in revenue and the backlog of developments on the board is strong.
"As for the stock, GFA has made a strong recovery from its late-2008 lows, but the stock's P/E ratio of 21 is still quite reasonable for a strong growth issue.
"The stock has been trading sideways since August 2011, perambulating in a range with a core of support at 30. It looks like an excellent base for a new rally, and 2012 should see the breakout.
"This is an experienced growth company in a country with an excellent economic engine and the stock pays a small dividend―that's an attractive package!"
Top Stocks For 2012: General Mills (GIS)
By Chuck Carlson
"General Mills (NYSE: GIS) looks especially tasty for total returns in 2012," says Chuck Carlson, a leading expert on dividend reinvestment plans -- a low cost strategy for loong-term investors to accumulate shares of a particular stock directly from the company.
On his The DRIP Investor, he explains, "There is a transition taking place in the stock market toward high-quality, dividend-paying stocks. General Mills plays into this trend very nicely.
"Profits for the leading food company should show nice gains in 2012, which should provide support to the stock price. Also, the stock o?ers certain defensive characteristics should the market become more tumultuous.
"Its stable of strong brand names, focus on costs, and overseas growth opportunities should drive profits higher in the near and long term. I like the stock for all seasons.
"General Mills owns some of the strongest brands on your grocer's shelves, including Green Giant vegetables, Old El Paso Mexican food, Haagen-Dazs ice cream, Yoplait yogurt, and Cheerios and Wheaties cereals.
"Finally, General Mills has pricing power that could be very useful should inflationary fears increase among investors. The stock's yield of 2.7% is an added bonus. I look for the stock to outperform the overall market in 2012.
"I think the stock will continue to put up decent gains should the market rally continue. And I would expect the 'defensive' qualities of the stock to fuel above- average price resiliency should the overall market turn down.
"Investors should note that General Mills o?ers a direct-purchase plan whereby any investor may buy the first share and every share directly from the company. The minimum initial investment is $250. For information on the direct-purchase plan call (800) 670-4763."
Top Stocks For 2012: Virtual Radiologic (VRAD)
By Richard Moroney
In Upside newsletter, quantitative analyst Richard Moroney uses a proprietary system called Quadrix, a screening model that assesses stocks based on nearly 100 fundamental and technical variables.
Virtual Radiologic (NASDAQ: VRAD) earns the Quadrix systems 'best buy rating' and is the advisor's favorite investment pick for the coming year.
"Virtual Radiologic o?ers on-call diagnostic imaging services, a unique niche that eases the workload of health-care facilities during peak hours, weekends, and holidays.
"It also addresses the shortage of radiologists amid increasing demand for digital imaging services. Virtual Radiologic's sta? of certified radiologists read X-rays, CT scans, and MRIs for hospitals, clinics, and imaging centers.
"Sales have advanced 16% this year. Volumes at existing facilities rose 4% in the September quarter, while total images read jumped 23%.
"Virtual Radiologic has maintained high retention rates, though competition has resulted in price declines. For the December quarter, the two-analyst consensus projects 7% higher per-share earnings on 4% sales growth.
"With solid operating momentum and bright growth prospects, Virtual Radiologic seems reasonably valued at 16 times expected 2012 earnings. The stock is a Best Buy."
Top Stocks For 2012: Vivo Participacoes
By Bill Wilton
"Vivo Participacoes (NYSE: VIV), a Brazilian telecommunication company that provides cellular services, is my top investment pick for 2012," says Bill Wilton.
The growth stock strategist for Zacks.com, explains, "Analysts continue to raise full-year estimates for the company." Here's his bullish review.
"The company operates through a number of subsidiaries and is headquartered in Sao Paulo, Brazil. In November, VIVO reported third-quarter results that included over 2,000 more customers, up 16% year-over-year. Overall the company's market share is now just under 30%.
"Service revenues increased 4% since last year to R$3.8 billion. Higher revenues translated to a 154% increase in net profits, to R$636 million.
"There is not a regular flow of quarterly estimates for the company, but VIVO has received several upward revisions for full-year 2011 and 2012.
"Forecasts for this year are up 19 cents over the past 2 months, to $1.14. Next year's Zacks Consensus Estimate is now $2.11, up from $1.59, an 85% growth rate.
"VIVO is trading at attractive valuations, especially given the popularity of emerging markets. The forward P/E is about 17 times earnings with a PEG ratio of just over 0.5. Its price-to-sales ratio is above 1.3 times."
Top Stocks For 2012: AECOM (ACM)
By Georey Seiler
"Our top pick for 2012 is engineering and construction (E&C) firm AECOM Technology (NYSE:ACM)," says Geo?rey Seiler.
In his BullMarket.com the advisor explains, "AECOM, unlike some better-known E&C names, o?ers a relatively low-risk business model. It performs no construction work at all and thus has none of the lump-sum, fixed-rate contracts that other companies might sign.
"The Los Angeles-based company focuses on a broad range of services that includes planning, design, environmental impact studies, project management, logistics and other jobs in the facilities, transportation, environmental, and energy and power segments.
"Transportation is the company's largest end market, representing 28% of the business, followed by environmental at 25%, facilities work at 24%, and Management Support Services (MSS), which delivered 17% of its revenues in fiscal 2011.
"Energy and power is the company's smallest segment, representing about 6% of its total revenues, but the company does view it as a growth opportunity. It is particularly strong in hydroelectric projects.
"The MSS business is 100% dedicated to working directly for the U.S. government, but government spending of all types -- either from federal state and local governments and foreign governments -- accounts for 70% of the company's revenue. The remainder comes from the private sector.
"AECOM has been under some pressure toward the end of the year, despite initially rallying following a strong fiscal Q4 earnings report in November. The culprit was some weak reports from fellow E&C firms and the
"However, AECOM isn't subject to the same type of energy sector cancellations that some other E&C companies experienced, and its exposure to
"Impressively, AECOM is one of the few E&C firms to grow its backlog sequentially last quarter. Total backlog stood at a record $9.5 billion on September 30th, a 10% increase year over year and a 3% increase quarter over quarter.
"Meanwhile, AECOM is well positioned to be a beneficiary of increased government stimulus spending in 2012, as well as the possible passage of a substantial highway bill late next year.
"AECOM guided for fiscal year 2012 EPS to be in the range of $1.90 to $2.00. The midpoint of this range reflects 15% growth in earnings per share. We think the guidance is relatively conservative.
"In summary, we like AECOM's position in the marketplace, its consistent growth, and sound low-risk strategy. With a pristine balance sheet, trading at under 14x the midpoint of conservative guidance, and an over 15% expected 5-year growth rate, AECOM is undervalued and our top pick for 2012."
Top Stocks For 2012: AeroVironment (AVAV)
By Gregg Early
Technology expert Gregg Early looks to AeroVironment (NDSQ: AVAV) as his top pick for the coming year.
The editor of The New Tech Investor -- and the soon-to-be-launched 2020 Portfolio -- explains, "Although the firm's miltary aerospace business should be strong, it is the firm's new 'clean technology' and energy e?ciency projects that should be the real growth kicker.
"AeroVironment started o? 2011 strong but it was hit in the spring by the global economic collapse and the irrational fears of investors -- both individual and institutional -- about what the future held in store for this unique firm.
"But 2012 should be the perfect climate for this company to continue is comeback and head to new highs.
"AeroVironment was founded by the father of human powered flight, Dr. Paul MacCready (1925-2007), the inventor of the human powered Gossamer Condor and Gossamer Albatross (which was flown across the English Channel and resides in the Smithsonian Air and
"MacCredy also developed the first solar powered aircraft, the Gossamer Penguin and the Solar Challenger. He also co-developed the GM Sunraycer, one of the first solar powered land vehicles.
"His revolutionary developments in aerospace design were put to good use in AeroVironment's unmanned air systems (UASs) division. The company's hand launched and micro UASs are deployed extensively in
"While general defense spending is on a downtrend, C4ISR (command, control, computing, communications, intelligence, surveillance, reconnaissance) budgets are increasing briskly across all the armed services as well intelligence and homeland security sectors.
"This business has sustained AeroVironment in the past and will continue to generate more business in coming years. But it E?cient Energy division is the real growth kicker.
"The company pioneered electric vehicle (EV) charging stations and has a long and abiding relationship with many car manufacturers as well as government agencies.
"As EV filling stations begin to dot the
"Also, because the stimulus plan had the unintended e?ect of holding up cleantech projects as everyone waited to see who would get government money, it made
"Now that the monies have been earmarked, projects will move ahead faster now that companies have better visibility on where the funding will be derived. AeroVironment is a buy up to 35."
Top Stocks For 2012: China
By Toby Smith
Growth stock specialist Toby Smith turns to a speculative micro-cap stock for his top pick for 2012:ChinaTel Group, Inc. (Other OTC: CHTL).
With the added disclosue that he personally own shares in CHTL, along with his clients at ChangeWave Research, the advisor looks to the firm's potential role in a new joint venture in the
"Our bullishness is based on a pending China Tel and Chinacomm joint venture as a 'basic telephone service' (BTS) licensed carrier in
"The Chinacomm/ChinaTel joint venture owns 37,000 kilometers of fiber-optic network and 3.5Ghz spectrum for wireless broadband in 29 of the biggest
"ChinaTel has su?ered a great credibility problem on the Street due to a set of failed capital raising deals that failed to close.
"But the delays in their closing equity financing over the last 18 months has turned out to be a blessing in disguise, as the potential valuation for the China Wi-Max network has at least doubled since the previous failed deal.
"We have advised clients to be positioned in China Tel now, ahead of what we consider to be imminent PIPE (private investment in public equity) deal, which CHTL announced in their latest SEC 8K. The size of the PIPE will undoubtedly be larger and at higher value than the failed $3.14 per share Olotoa deal.
"CHTL's announcements in the last few weeks on $
"In addition, CHTL just closed stock-only consulting contracts with their key employees on Dec 1. Nobody takes a stock deal in lieu of cash unless they know a lot about the near future of the PIPE transaction.
"Based on our analysis, the PIPE deal o?ers disclosed in Oct 8K are from Asian telco/ high tech firms itching to capitalize on the China Internet miracle - -they are the only market other than India with less than 40% wirless/fixed broadband penetration.
"We believe ChangeWave Research is the only independent research firm following China Tel Group; we rate the stock a 'strong buy' with a $
Top Stocks For 2012: MannKind (MNKD)
By Nate Pile
"My top stock pick for 2012 is MannKind Corp. (NASDAQ: MNKD), which is developing a a novel formulation of inhalable insulin called Afresa," notes Nate Pile.
In his Nate's Notes newsleter, he explains, "I would emphasize that while the stock must be considered speculative until the FDA delivers a ruling in mid-January of next year, I believe the clinical data that has been submitted by the company is likely to warrant approval.
"Inhalable insulin has admittedly been a losing proposition for other companies that have attempted to play the game over the years.
"However, I believe that MannKind's unique approach to the situation will not only help the company win approval for its drug, it will also allow the company to experience a surprisingly strong rollout of the product if/when it is finally approved.
"In addition to developing a drug that has a far more favorable clinical profile that the last inhalable insulin product to be approved (Exubera, in 2006), MannKind has also leveraged its engineering expertise to develop a vastly superior mechanical device for delivering the powdered insulin to a patient's lungs.
"The stock took a hit a few months ago when it was announced that the company would not be signing up a marketing partner for Afresa prior to the drug's approval.
"However, it has been my contention all along that it was most likely Alfred Mann (already a billionaire a couple of times over thanks to past successes with start-up companies) who walked away from any potential deals, not the other way around.
"And given how the stock has responded following the dip, it appears that the rest of Wall Street may be coming to its senses around the issue as well.
"Assuming the drug gets approved, it would not surprise me at all to see a marketing deal announced shortly thereafter, most likely on much better terms than the company would have received had it signed an agreement pre-approval.
"Along with this lead product, MannKind is also working on next generation products for not only diabetes, but for other metabolic disorders as well.
"In addition, the company is also doing a lot of work in the oncology arena, and as time goes by, we believe the company has the potential to grow significantly as it leverages its expertise in all three areas it is doing work.
"With the caveat that the stock is likely to tumble sharply if the FDA denies approval of Afresa next month (and thus needs to be considered 'speculative' by all who by it ahead of the ruling), I believe MannKind currently represents one of the best risk- reward ratios among all the stocks I follow. MNKD is considered a strong buy under $9 and a buy under $12."
Top Stocks For 2012: EZchip (EZCH)
By Paul McWillams
"EZchip Semiconductor (NASDAQ: EZCH), a fabless semiconductor company that specializes in network processors," is my top pick for the coming year," says technology sector guru Paul McWilliams.
In his Next Inning newsletter, designed for sophisticated tech investors, he suggests, "I think the upside potential here in 2012 and beyond is significant.
"Its initial market target has been what's termed as CESR (Carrier Network Switching and Routing). EZCH has since expanded its focus to include products that are broadly grouped into what's called the 'Access' market.
"Between organic demand growth in the CESR market and EZCH's expansion into the Access markets, it is estimated the company will be addressing a total available market potential of about $1.5B by 2012.
"That implies substantial upside revenue potential for a company that will report somewhat less than $
"In 2012, EZCH will be shipping NP2 and NP3 / NP
"Notable production ramps for the NPA and NP4, which sells for roughly twice the price of a NP3, will begin in 2012. Revenue from its NP2 will likely peak in late 2012 or 2012 as Juniper winds down its demand and replaces the NP2 with an internally designed ASIC.
"However, I believe this will be much more than o?set with the ramp of the NP3 and NP
"I believe EZCH's lack of participation in the 2011 tech rally is attributable to two factors. The first is what I think will prove to be a misunderstanding as to when its business at Juniper will peak and the sharpness of the decline following the peak.
"In my view, this peak won't happen until late in 2012 at the earliest and by then it will be much more than o?set by growing business at Cisco; not to mention design wins at other leading networking companies that will ramp in 2012 and beyond.
"The second factor has been the selling of shares by some of EZCH's early venture capitalists (VC's). Due to the fact EZCH initiated a secondary o?ering to liquidate these VC shares in one fell swoop as well as complete the purchase of its a?liated EZchip Technologies operating unit, this selling pressure will soon be eliminated. In my view, with this gone and EZCH poised to post impressive growth in 2012."
Top Stocks For 2012: Weatherford International (WFT)
By Elliott Gue
Energy sector expert Elliott Gue turns to Weatherford International (NYSE: WFT) as his top pick for the coming year. In his The Energy Strategist, he explains, "As with most oil services firms, Weatherford's North American business has been hit hard and the stock now trades at a deeply discounted valuation.
"Weatherford is perhaps best known as an expert provider of services related to mature oilfields. Traditionally, Weatherford has had a strong presence in North America, which has been a proving ground for all sorts of technologies that squeeze oil from older fields.
"An example is underbalanced drilling, a technique that prevents damage to mature fields. Weatherford's genius in recent years has been to take homegrown North American technologies and sell them internationally.
"The firm has gradually lessened its exposure to North America and forged into international markets where profit margins are higher and profitability cycles less severe.
"It also wins points for expanding its business in Russia, a key market for both oil and natural gas production. Specifically, Weatherford purchased the oil services business of TNK-BP, BP's joint venture in Russia.
"Weatherford's stock has significantly underperformed the rest of the oil services industry since October, primarily due to concerns about Weatherford's Chicontepec contract in Mexico.
"Chicontepec is a heavy oilfield that is the centerpiece of Petroleos Mexicanos' (PEMEX) strategy to stabilize and grow oil production.
"The problem PEMEX faces is that production from its largest field, the o?shore Cantarell oilfield, has fallen o? rapidly in recent years to the point that
"Accordingly, PEMEX has decided to reexamine its development plans for Chicontepec and has cut investment in the field 22%. Because Weatherford is a big player in Chicontepec, its stock has fallen.
"Although PEMEX's recent announcements caught the market by surprise and are bad news for companies with significant exposure to
"Mexican oil production is falling fast; the country will have no choice but to bump up spending on Chicontepec.
"Finally, Weatherford is trading at less than 17 times 2012 earnings estimates. This compares favorably to Schlumberger's stock, which trades at 22.5 times 2012 earnings estimates. Shares of Halliburton and Baker Hughes (NYSE: BHI) trade at 21 times 2012 earnings.
"Weatherford's deeply discounted valuation more than prices in all the bad news surrounding
