One of the highlights of each Money Show is the Forbes Roundtable. Hosted by Matt Schifrin, editor of the Forbes Newsletter Group, the panel features a variety of leading financial newsletter advisors, their current market outlooks, and a selection of their top stock picks. Here are excerpts from the latest Roundtable.
(Editor's Note: For more information on any of the advisors below, simply click on their photos. We would also note that a number of interviews of several top advisors can be seen at www.forbes.com.
Dennis Slothower, editor of Stealth Stocks and On the Money notes, "One stock that I particularly like in the income area is Novastar Financial (NFI NYSE) which has come off its highs of over $70 a share. It is providing a yield of over 15%. That's a huge dividend. Earnings were up 122% from a year ago. It sells for 12 times earnings. I see this stock being at $170 within 18 months. In the growth area, I like Hudson City Bancorp (HCBK NASDAQ). It's a good, stable stock that I think could double. In the medical area, I like Conventry Health (CVH NYSE), a rapidly-growing HMO. I think it's a good, solid growth company that everyone who is looking for good, steady returns should own. I also like Odyssey Healthcare (ODSY NASDAQ), in the same group. I think the stock has solid upside potential. UTStarcom (UTSI NASDAQ) has done remarkably well this year by supplying telecom services in China. I think this stock could double or triple over the next couple of years. Finally, I think crude oil is abnormally high and one area that is uniquely postured to benefit from a drop in oil prices would be the airline industry. There are two stocks in particular that I think could double or more over the next year-- Mesa Air Group (MESA NASDAQ) and AirTran Holdings (AAI NYSE)."
John Buckingham is the editor of
The Prudent Speculator , a newsletter that focuses on both
growth and value. According to The Hulbert Financial Digest,
this is the #1 rated newsletter for
the past 10, 15, and 20 years. Says John, "There is
still tremendous opportunity, but I think it is best to maintain a
disciplined investment approach. The idea is to not jump in and out and chase
hot strategies. That's really the way you make money over time. We've done extremely well with
homebuilding stocks. The p/e growth has been tremendous. You have companies growing earnings at 25% to 30% a
year, and trading at single digit p/e ratios. Historically, it had been
a cyclical industry, but I don't think that will be the case
going forward. We have favorable demographic trends in housing and historically low
interest rates. D.R. Horton (DHI
NYSE) has grown earnings for 25 years, and it's trading
at seven times earnings. I think that's ridiculous. Management claims that they
will increase earnings at a rate of 18%-20% for each of the next three years, and that's
without any acquisitions. There's still tremendous value left and I think the
p/e multiples of homebuilding stocks will expand as people realize they're not
as cyclical as they were in the late 1980s." (Buckingham cautions against buying any one recommendation and emphasizes
diversification.)
Gregory Spear, editor of The Spear
Report
, follows some 125 independent stock pick pickers in order to gauge trends and isolate
expected top performing stocks. Says Spear, "My system is telling me that the rally is over
and that the market will tank at this point. In my mind, this is a
forgone conclusion. There are, however, opportunities. We agree with John
(Buckingham) that the housing and homebuilding sector still has tremendous potential. We
have four homebuilding stocks on our Consensus buy list now-- D. H. Horton
(DHI
NYSE)--as well as Centex (CTX NYSE),
Lennar (LEN NYSE), and NVR (NVR
NYSE). These are very, very good buys; they have taken a hit recently and are very
good stocks to get into right now."
Jim Collins is the #2 rated newsletter by Mark Hulbert
over the past 15 years. He has been investing since 1956 and is editor
of Listed Insight and OTC Insight
. "We're still buyers. The pattern we have since mid-October has been very strong
for small-cap stocks. This is typically what happens when you come out of a slow
period in the economy. We have been with the Chinese Internet stocks for about a
year and some have gone up five-fold. The stocks we like in that arena are
Netease.com (NTES NASDAQ), SINA (SINA NASDAQ), Chinadotcom (CHINA NASDAQ) and Sohu.com (SOHU NASDAQ).
We see tremendous growth coming out of China, a market of some 1.2 billion
people. GDP is growing much faster in China than here and we still think there
is a lot of growth in the Internet there. We still see these companies having
30%, 40%, 50% growth going forward. We're heavily weighted in the technology
sector, with Chinese Internet stocks making up a big portion of that."
Vahan Janjigian is the editor of The Forbes Growth
Investor and The Forbes Special Situation Survey. "We have
just come out with a recommendation for Level 3 Communications (LVLT NASDAQ).
The interesting thing about it is that Warren Buffett
was a big buyer of the firm's convertibles, which he has recently converted
into stock. I'm also very bullish on EMC Corp. (EMC NYSE),
which is in the storage technology business.
It should do really well as the economy improves. I also like Cisco
Systems (CSCO
NASDAQ) right now. The stock recently corrected because they were cautious in their outlook.
I think this has created a buying opportunity. One other stock--which has
nothing to do with technology--is Rite-Aid (RAD NYSE). This
is a company that has had some real serious accounting scandals. A number of
former executives were sentenced. The company is really making a comeback under
new management."
