This is year eight of my end of year exercise to identify what I believe are my top 10 holdings for the coming year. These are the 10 stocks that I already have in my portfolio, that for one reason or another I feel have the best chance of doing well in the next year or so. These are all, of course, only my opinion, and I'd hate for anyone to invest in these, lose their money and blame me. So don't even think of investing in these without doing your own research. Targets are my naive idea of what I think is fair value for each of these. Not much turnover again this year. I generally keep about 20 stocks in my portfolio (now down to 18) and the stocks don't change a whole lot, so in a given year, we're looking at roughly 1/2 of my portfolio, not counting Mutual Funds/ETFs.1) LTD - Limited stays at the number one spot after another bad year. Down nearly 50%, with an earnings yield of around 17% and a dividend yield of about 6%, any improvement in the outlook for retail should bode well for Limited. This would appear to be the best buying opportunity since 2003. Target reduced slightly to $30. 2) BKS - Barnes and Noble, new this year, is another currently unpopular retailer. With an Earnings Yield around 14% and a dividend yield around 7%, this is another one that should recover when consumers start consuming again. I can be patient in the interim. Selling below book value. Target of $40.3) PFE - Pfizer moves up a notch to 3. Great Yield and reasonable earnings. Pipeline concerns are already baked into the price and I think Pfizer will find a way to address them through cost-cutting and acquisitions. Target reduced to $40 from $50.4) DIS - Looks like a great opportunity to get Disney at a great price after a 30% decline in 2008. Target stays at $50.5) BBOX - Black Box moves up a notch. Still looks good fundamentally and in good shape financially. Target increased to $60.6) MSFT - Microsoft returns after an absence. Sub $20, I don't see how MSFT can miss long-term. Let's say $45 for a target.7) SCHL - Another repeat moves up a notch. Scholastic's lumpy earnings make it a little tricky and cause some volativity. I'm a little less enchanted with this one as time goes on, but willing to give it a little more time to recover. Kids are going to continue to read and I think parents will be slow to give up buying books for their kids. Target reduced to $50.8) MDT - Medtronic has been on my list before and it went down enough to be attractive again. Target of $70.9) AMAT - Applied Materials returns. Long-term, I still like their position in Semi equipment as well as their advances in Solar. Pretty cheap for a tech company. Target reduced to $25.10) JAS - Jo-Ann made a round trip this year. At one point in 2008, it was a double. I like it again at these levels. This seems like a retail stock that actually has potential to benefit from an economic slowdown, as perhaps more people will consider hand-making gifts or clothing. I'll increase the target to $25 this time.Gone from last year's list are WM, HD & TLGD. I continue to hold HD and TLGD, but they are now smaller positions. You all know about WM.
Well, if I'd waited one more day, until the year was actually over, I would have come up with a slightly different list. JAS had quite a good day and would have fallen off the list entirely, replaced by BMY. Some of the others would have reshuffled a little bit, but I don't think any other additions/deletions would have resulted. I guess I'll stick with the list I posted, for tracking purposes.
Great list. I own many of those myself.
I'll wrap the year up a little early, since I'll be busy the next couple of days. Shouldn't affect the outcome all that much. An evenly balanced portfolio of my 2009 picks held all year, including dividends (not reinvested) would have yielded about 60% vs 27% for SPY (S&P500 ETF.) I'd call that a successful year both absolutely and relatively.JAS +137%SCHL +124%LTD +101%MSFT + 64%MDT + 45%DIS + 44%AMAT + 38%BKS + 31%BBOX + 12%PFE + 9%SPY + 27%Only BBOX and PFE trailed the S&P and all were positive. A good year to be fully invested or close to it. BKS & BBOX were up higher but have slumped a bit lately. Most everything else at or year the annual highs. Retail, in general, seems to have done particularly well; Tech & Pharma/Medical not so much.
JAS +137%SCHL +124%LTD +101%MSFT + 64%MDT + 45%DIS + 44%AMAT + 38%BKS + 31%BBOX + 12%PFE + 9%SPY + 27%
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