5 Great, No-Nonsense Value Stocks for 2012


Roy Ward Image Roy Ward Chief Analyst, Cabot Benjamin Graham Value Investor

But while this handful of stocks have a lot of potential this year, bad news from Europe could turn some of the market's overall promise into peril, write J. Royden Ward of Cabot Benjamin Graham Value Letter.

A year ago, I wrote this somewhat vague forecast: "2010 has been a very good year for value stocks...2011 might prove to be a bit more difficult." This year, my forecast isn't as vague, and will hopefully be more helpful in planning your investment strategy for 2012.

Which stocks will perform well in 2012? If the stock market is going to behave (or misbehave) in a manner similar to 2011, then logically the same types of stocks will perform well again in 2012. Maybe I'm over-simplifying, but top-notch companies in leading industries continue to be undervalued and look very attractive.

I scanned my database to find five stocks with the right credentials to perform very well in 2012. Included in my choices is a conservative bond exchange traded fund (ETF), which will add stability when the stock market takes one of those breathtaking dives when you least expect it.

The other four picks are the stocks of US companies with exceptional prospects for 2012. All of my choices pay dividends, and all are selling at bargain prices.

Abbott Laboratories (ABT)
Founded in 1888, Abbott is a solid company with a reasonable stock price and an above-average dividend. The company produces a wide range of prescription pharmaceuticals, infant and adult nutritional supplements, test and diagnostic equipment, and medical devices.