Top 10 Stocks for 2012

Written by

Jae Jun

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What a great turnout. More than 400 votes were tallied in selecting the best stocks for 2012.

Each position starts with an equal $10k allocation. Total starting portfolio is $100k.

You can see the details of each holding such as unrealized gain/loss figures in absolute dollar and percentage terms on the Top 10 2012 stocks page. I’ve put up a 20 minute delayed, auto updating graph and table you can follow.

2 brains are better than one and that is the main objective for tracking these stocks. Each submission is supposedly a best idea. I want to see whether voting for the best of the best ideas will “normalize” the bad decisions by an individual. Hopefully this will lead to an awe inspiring portfolio.

Don’t get the wrong idea that this is some sort of “herd” investing. Herd investing is where you mindlessly follow other picks. Here, it is a silent debate over the best idea. Just like a ballot.

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Top 10 Stocks for 2012 as Voted by You

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Below are the short elevator pitches for each submitted idea that made the top 10.

1. Oracle [ORCL] – Stock declined 18% in 2011. Sell-off on recent earnings miss is overdone. Has a wide moat. Larry Ellison is a good CEO. Stock currently appears in Greenblatt’s magic formula screener. Cash earnings yield over 9%.

2. Bank of America [BAC] – Most hated stock in the DOW. Big institutions are bound to realize that BAC is well funded and isn’t dying anytime soon.

3. Western Digital Corp [WDC] – Sells for a Fwd P/E=6 and BV=1.27. For a tech company it’s really cheap.

4. Gravity [GRVY] – Once they have their new game up and running it’ll start inching up to something at least more in line with book value.

5. Dell [DELL]– $15 stock with $7 in cash. Company moving away from PC’s and into higher margin enterprise solutions.

6. Corning [GLW] – A great innovative company. The stock price has taken a deep hit this year.

7. Microsoft [MSFT] – Appears in Greenblatt’s magic formula screener with FCF Yield 13.85% and EV/EBITDA for 2012 at 5.52

8. Forest Laboratories [FRX] – Solid 10yr growth rate, consistent earnings power, no debt, high earnings yield, consistently buying shares back.

9. Goldman Sachs [GS] – With share price at $90, company is buying back as much of itself as it can. All of that is accretive eventually and if anyone will find a way to make a good return on capital it will be GS despite obvious headwinds.

10. ADDvantage Technologies Group [AEY] – Profitable for last 25 years, Surplus Cash = 58% share price., TBV = 163% share price, NCAV = 127% share price. Avg. 10yr op. margin = 17%. ROA= 16%, Classic Graham Net-Net.


Long AEY, GRVY at time of writing

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