What are your top stock picks for 2009?
Best Answer
904 points
jillybeansisme answered 11 months ago …
I have a few that I like for various reasons such as infrastructure, consumer staples, alternative energy, etc. or because they just make sense to me. In alphabetical order: ABB, CNQ, EZCH, GEX, GIS, LDK, TSN, UNFI, ZOLT. Please do not consider this a recommendation, but simply an opinion.
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265 points
fuzball answered 11 months ago …
Why is Obama so hot-to-trot with his "infrastructure" spending plan? Not only do we desperately need it, but it will create millions of jobs, his main reasoning. So...
Industrial Select Sector SPDR - NYSE-XLI (an ETF)
STOCKS:
Jacobs Engineering Group - NYSE-JEC
Chicago Bridge And Iron - NYSE-CBI
Flour Corp - NYSE-FLR
105 points
InvestingAnswersDotCom answered 11 months ago …
After hundreds of hours of research, I've managed to narrow the vast investing universe down to just a handful of securities that my staff and I think are poised to deliver superior returns throughout 2009.
These unique investment ideas are involved in a diverse array of activities -- from power generation to alternative energy to gold production, just to name a few. Yet despite this, they all share exposure to several themes we see playing out over 2009 that should help them deliver exceptional returns for shareholders. These include . . .
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Oil Prices Should Rise in 2009
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On July 11, 2008, the price of crude closed at $147.27 per barrel, its all-time high. Oil has since fallen dramatically from that record level and recently pierced below $40, a multi-year low. These lowered prices -- attributable to the unwinding of speculative positions and market anxiety about a global slowdown, rather than a commensurate decline in global demand -- will inevitably rise again. Already, current prices on futures contract show oil rising some +30% in the next six months.
The long-term bullish outlook on oil is still valid. There is no denying that oil is a finite resource, and over the last century, mankind has reached most of the easiest to find deposits. While new discoveries are still being made today, they lie in more difficult to reach places like underneath miles of ocean floor or in alternate forms such as oil sands. The higher costs associated with producing this crude should lead to higher prices in of itself.
As well, don't forget the rise of emerging nations like China and India. Together, these two nations are home to roughly one-third of the world's population. Their rise will no doubt lead to more demand on limited petroleum resources. Talk of a global slowdown has helped reign in oil prices, but consider that China is still expected to grow its GDP more than +8% in the coming year.
Finally, major producing nations and OPEC have considerable control over supply and won't hesitate to use that power to produce higher prices. OPEC recently cut its production by 2.2 million barrels per day to help put a floor on oil's price. Future cuts are a given should crude continue collapsing.
So while lower prices at the pump are nice, we feel they are only a short-run reprieve as the long-run supply/demand equation is firmly in the bull's corner.
Top Oil Picks -- DIG, XOP
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Gold will Continue Its Long-Term Bull Run
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Since 2002, gold prices have risen from less than $300 per ounce to over $800. At one point over that span, the yellow metal even topped $1000 per ounce. Why has there been such a bull market for gold, and why should it continue in 2009?
Gold is historically known as a store of value. Since it is accepted as a form of currency nearly everywhere in the world, investors flock to gold in times of economic turmoil and inflation. This safe haven status is what sets gold apart from other investments and should ensure a continuation of its bull run in 2009 given the tough economic news we're seeing.
As well, it's no secret the U.S. Federal Reserve is doing its best to keep the recession as short and shallow as possible. This has included massive bailouts, bridge loans and a stimulus package. Of course, the massive cost of these plans will lead to strong inflationary pressures, likely eroding the value of the U.S. dollar. In addition, the sharp cuts in the fed funds target rate have also led to a sharp fall in the dollar recently.
Gold and the dollar tend to move opposite of one another. Given that the strength of the dollar is likely to continue deteriorating (currencies with strong interest rates and stability usually rise; a fed funds rate near 0% and inflationary pressures will be a major drag), gold's 2009 outlook continues to shine.
Top Gold Picks -- GDX, UGL
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Alternative Energy will be a Top-Performing Sector
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Following the recent election, President Obama has made no bones about the fact he plans to make alternative and renewable energy a pillar of his administration.
Obama has called for an aggressive timetable in implementing renewables, perhaps pushing them to 25% of U.S. electricity generation by 2025. That will mean unprecedented investment in the sector.
You see, only about 10% of the United States' energy currently comes from renewable sources. We need roughly 2.5 times that much, and quick. Federal law already says 15% of electricity from private utilities has to be generated from renewables by 2020. That -- and similar renewable power initiatives around the world -- will be a major catalyst for the handful of companies with the technological expertise and production bandwidth to build the machinery and infrastructure needed to harvest alternative power sources.
Top Alternative Energy Pick -- GEX
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Solid, Dividend-Paying Securities will be Among the Most Lucrative
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When the markets look tumultuous and unpredictable, nothing shores up a portfolio like good, old-fashioned dividend-paying companies. Whether the firms are located in the United States or abroad, the actual cash payments delivered by dividend payers make them ideal for rocky markets.
Dividend-paying companies tend to be well-established players in mature industries, and their shares historical lead the way to recovery. In 2008, for instance, the 374 dividend payers in the S&P 500 Index have outperformed the 126 non-payers by nearly six percentage points.
For as long as the market's turmoil sticks around, we expect investors to continue placing more money in securities offering a rich cash stream. Thus, 2009 should be a good time to pick up abnormally high yields (thanks to lowered share prices in general) from some of the world's most stable businesses, while also outperforming the S&P.
Top Dividend Pick: HGI
108 points
ricky212 answered 11 months ago …
One easy answer. CLR. It is traded on the NYC exchange and is a oil company
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2183 points
ChaosNantuko answered 11 months ago …
Due to the infrastructure spending plan, i'd say XLU is a good investment.
As soon as the economy begins to recover, there will be some major investment in china and india. They're currently going down because of reduced demand from the developed world. When that demand begins to grow again China and India should basically skyrocket. While its a bit early to enter the position yet, i believe FXI is a good ETF to use to play that trend.
Once again, its a bit too early to invest at the present moment, but i believe Oil should eventually recover. This is even priced into the futures market, as the farther out expiration dates are currently priced high then the closer expiration dates. While it will continue to vastly underperform in the short term, oil should begin to recover after the recession. Its about supply and demand, and from that standpoint, our position after this recession will be far worse then before it. This makes DIG a good investment.
3963 points
MNSL answered 11 months ago …
Following types of companies will benefit most in 2009.
Global Companies in next rotating sector and neglected sector
Global companies with less debt, positive cash flow and with protected market including segment market for their products either locally or abroad.
Global companies with less competition. Some competitors already have become bankrupt and now some companies are struggling to raise capital
Outstanding global companies in selected sectors.
