Top 5 Stocks for February

Go Big By Going Small: 5 Small Cap Stocks to Buy Now[1]

It’s Time to Get Down to Business

Now that the holidays are well behind us, it’s time to get down to business! The market is now celebrating the best earnings environment that we will likely witness in our lifetimes, and our focus on sales and profits will be handsomely rewarded as these companies report results in the weeks ahead. What’s more, preliminary GDP estimates are right around the corner, and a favorable reading could really put Wall Street in a buying mood. But these aren’t the only factors pushing our stocks higher. We’ve seen a big shift towards international blue chips, and that means big things for our picks this month.

This combination of a strong earnings season for our picks and a global economic recovery should really boost these stocks the weeks ahead.

Here are my Top 5 Stocks for February.

NEXT – Apple (AAPL)

Go Big By Going Small: 5 Small Cap Stocks to Buy Now[1]

Top Stock #1 – Apple (AAPL[2])

My #1 stock for the month, based on its tremendous earnings report in January, is Apple (AAPL[2]). AAPL is flying high due to strong iPod sales, rapid iPhone 3GS adoption around the world and momentum from its Mac computer line. Specifically, Apple’s profits jumped 50% during its fiscal first quarter thanks to record sales of $15.68 billion over the holiday shopping season. While some techies are a bit disappointed with the much-anticipated iPad notebook computer, I’m thrilled that Apple chose to offer a good product at an outstanding price instead of an outstanding product and an unreachable price. I remain confident the $499 entry price for the iPad will spark huge sales and take Apple to the next level.

So strike now while people are badmouthing the iPad, because once huge sales of this gadget are recorded, investors will race for a piece of AAPL once more. This stock is an excellent buy right now.

NEXT – Priceline.com (PCLN)

Go Big By Going Small: 5 Small Cap Stocks to Buy Now[1]

Top Stock #2 –
Priceline.com (PCLN[3])

Priceline.com (PCLN[3]) continues to thrive as shoppers take to the Internet to name their own price. In the case of airline tickets and hotel reservations, Priceline.com keeps the difference between the price paid by the individual and what Priceline.com paid for the ticket or hotel room. You may not think that travel spending is very high right now, but the bottom line is that value-conscious consumers really love Priceline’s ability to “haggle” on prices. This has allowed the website to become an oasis for cash-strapped consumers, and I expect continued growth in the weeks ahead.

The numbers show how great PCLN is doing right now. The company announced that its third-quarter earnings rose 98.3% to $3.45 per share compared with $1.74 per share in the same quarter a year ago. During the same period, Priceline.com’s sales rose 30% to $730.7 million, and the company cites an “exceptionally strong” summer travel season as consumers took advantage of its travel bargains. The analyst community expected third-quarter earnings of $2.92 per share, so the company posted an 18.2% earnings surprise.  Looking forward, Priceline.com expects full-year earnings of $1.52 to $1.62 per share, which is better than analysts’ consensus estimate of $1.49 per share.

NEXT – AmBev (ABV)

Go Big By Going Small: 5 Small Cap Stocks to Buy Now[1]

Top Stock #3 – AmBev (ABV[4])

AmBev (ABV[4]), or more formally Companhia de Bebidas Das Americas, dominates the Brazilian beverage market producing various brands of beer and distributing Pepsi and Lipton products throughout Latin America. As consumers in Latin America become more affluent, they aren’t just buying more cars and televisions. An emerging middle class is buying upscale consumer staples from AmBev and really pushing this stock to new heights. I expect the global recovery to continue to boost this stock.

NEXT – Baidu (BIDU)

Go Big By Going Small: 5 Small Cap Stocks to Buy Now[1]

Top Stock #4 – Baidu (BIDU[5])

Baidu (BIDU[5]) is the leading Chinese-language Internet search engine with more than 70% of China’s search market. Baidu earns nearly all of its revenue through online advertising services, but also operates a network of third-party websites and online communities. As the emerging market of China continues to lead the global economic recovery, more businesses and consumers are jumping online to become part of the 21st century workforce. This means explosive growth for BIDU in 2010.

NEXT – Marvell Technology (MRVL)

Go Big By Going Small: 5 Small Cap Stocks to Buy Now[1]

Top Stock #5 –
Marvell Technology (MRVL[6])

Marvell Technology Group (MRVL[6]) is a Bermuda-based firm that offers data storage and broadband communications gear. This “fabless” semiconductor company designs and sells hardware, but outsources the actual fabrication of the devices to keep down costs. Marvell is a global player, deriving more than 80% of its revenue from Asia, though it relies on just a few customers like Western Digital, Toshiba and Samsung for the bulk of its sales traffic. As high-tech devices like smartphones and laptops pick up in sales, MRVL will see demand for its products spike as well in 2010.