Stock Picks That Should be a Slam Dunk
It seems the whole country has been swept up in March Madness. The much-anticipated Final Four games are just around the corner, and basketball fans can’t wait to see which team finally wins the NCAA Championship.
Our InvestorPlace experts are getting in on the action by offering up their top stock picks with slam-dunk potential. Even if you’re not a sports enthusiast, we think you’ll be a big fan of these stock picks.
So get in the game with our March Madness stock picks:
The Fan Favorite: Apple (AAPL)
Louis Navellier, Editor, Blue Chip Growth
If the stock market was played like the March Madness tournament, then Apple (NASDAQ: AAPL) would most certainly snatch a spot on everyone’s bracket. Think of the company like a Duke or a WVU — a team that is perennially in the competition. It’s a no-brainer to include them in your bracket — just like Apple is a natural choice to have in your portfolio.
The brand is known worldwide for its Mac computers, iPods, iPhones and now the iPad. The company has a winning combination of sales growth, earnings momentum and innovative product ideas. Even if Apple doesn’t take the championship title every year, it repeatedly pulls in double- and triple-digit gains that place it near the top of the bracket pool. Expect to see Apple score big points this year as sales of its newly released iPad 2 heat up.
Half-Court, Buzzer-Beating Shot: Orient Paper (ONP)
Robert Hsu, Editor, China Strategy
Orient Paper (AMEX: ONP) has been beaten down, but this March, the company is showing that it’s still got plenty of fight left — reporting much better-than-expected earnings just last week as the NCAA Tournament got under way. And, as a result of these strong earnings, the stock shot up by more than 25% amidst the broad market sell-off, though shares have since pulled back.
However, this is still a stock that’s operating in speculative mode — the sort of company that needs to keep making those buzzer-beating, half-court shots. Although the earnings results were a great sign, I believe that the company needs to take additional action such as share buyback or declare a big cash dividend to win back investor confidence. If that does not happen soon, it will be difficult for the stock to recover.
This is somewhat of a longer shot, but considering the market’s huge undervaluation here, if ONP can keep sinking baskets, it may be just the ticket for game-winning returns.
A Strong Rebound: AU Optronics (AUO)
Hilary Kramer, Editor, GameChangers
Does your annual March Madness ritual including parking yourself in your favorite chair (with your beverage of choice) and watching game after game on TV — a big TV?
A lot of those big screens are made by AU Optronics Corp. (NYSE: AUO), a leader in flat-panel displays of all sizes whose customers include Samsung, LG, Dell (NASDAQ: DELL) and Apple (NASDAQ: AAPL). The company’s advanced manufacturing capabilities allow it to build huge panels for big-screen TVs. I’m talking the size of a pool table!
But it’s more than big TVs. AUO’s displays are used in everything from notebook computers and desktop monitors to mobile phones, digital camcorders, automobile displays, and so on. This is a big growth area thanks to the explosion in mobile devices and tablet PCs. And then there are corporate and commercial markets. LCD screens are popping up everywhere — malls, office building lobbies, elevators, doctor’s offices, airports.
Like almost every other industry, flat-panels were hit hard by the recession. However, the trend has reversed, and AUO’s revenue increased 30% in 2010. I look for this to be a big “rebound” year for AUO and am targeting more than a double from current prices.
A Cinderella Story: IMAX Corp. (IMAX)
Louis Navellier, Editor, Blue Chip Growth
IMAX Corp. (NYSE: IMAX) has to be one of the greatest Cinderella stories to emerge in the last year. For the past few years, the company has benefited from a shift in consumer preferences. People are no longer seeing IMAX tickets as a luxury, but rather as the standard of movie watching.
The company reported a profit of $54.2 million, or 80 cents per share, up from a profit of just $4 million, or 6 cents per share, in the equivalent quarter of 2009. Its sales and leases revenue increased 68% as more IMAX theaters were installed around the world. The company expects to install an additional 80 to 90 theaters in 2011, after installing 54 in the fourth quarter of 2010. CEO Richard Gelfond said 2011 will be an even more profitable year for the company.
Despite a few ugly stepsisters called retail sales and consumer spending, IMAX has the opportunity to pull an unlikely upset, like Butler did with Pitt, and rise above the ranks and pull it out in the end.
An Easy Layup: SPDR Gold Trust (GLD)
Robert Hsu, Editor, China Strategy
There’s no sure thing when it comes to investing — or to basketball. And although everyone loves an underdog, sometimes it’s just as good to see a No. 1 ranked team soundly smash its way to victory. And the SPDR Gold Trust (NYSE: GLD) is doing just that, on the back of strong global demand for the precious metal.
In fact, Chinese demand for physical bullion has exploded, up 70% last year, and is continuing to climb this year. So it’s no surprise that gold is now again hitting nominal highs after a pullback in January, and then a strong February comeback. At its current price, right around $1,400 an ounce, it looks expensive, but keep in mind that the inflation-adjusted all-time high from 1980 is close to $2,500 per ounce.
And inflation is one big reasons why gold is an important part of my China Strategy portfolio. Not only do I see nice upside for the metal, but it’s also a great portfolio hedge. Expect gold to reach $1,600 this year.
Serious Xs and Os: Telvent (TLVT)
Hilary Kramer, Editor, GameChangers
You’re team is trailing by 2 points late in the fourth quarter and needs to hit a 3-point shot in 2.7 seconds. Your team’s coach is frantically drawing Xs, Os and all sorts of lines on a whiteboard, showing his players exactly where to go. If those drawings for just five players look chaotic, imagine trying to manage the flow of 195 million drivers per day at 9,000 intersections! Or the journeys of over 2.5 billion train passengers and more than 700 million airline passengers annually. To paraphrase the famous line from Jaws: “You’re gonna need a bigger whiteboard!”
Fortunately, Telvent Git, S.A (NASDAQ: TLVT) has software that takes care of it by collecting and analyzing real-time data for companies in the transportation, energy, agricultural and environmental sectors. In fact, the NCAA is one of their clients, as are the Super Bowl Champion Green Bay Packers.
As economies around the world continue to develop, I expect Telvent’s information services to continue to be in strong demand. They may not be able to draw up game-winning plays, but their game-changing software should make the stock a winner for your portfolio.
