Which are the Best Stock for 2010

December 29, 2009

During 2009, finding winning stocks was like shooting fish in a barrel. But if what goes up must come down, picking next year's winners might be a lot tougher.

Among more than 4,000 stocks with market caps above $100 million that traded on major U.S. stock exchanges, more than 700 have doubled in price this year, and 84 have managed to see their prices rise 400% or more.

With those staggering numbers almost in the record books, a repeat performance of 2009 seems unlikely for most of those stocks. Still, that doesn't mean that there won't be any great stock returns in 2010.

Following are some readers comments on the best stock in 2010


I'd like to suggest a look at Intuit. They've built a very strong brand in the various Quicken personal finance products. If their newest foray into non-tech friendly drag-n-drop website design is even fractionally as successful, it could prove a good performer. Especially as more and more people give up on waiting for the government to "create" their next job and contemplate starting their own businesses. Operating an online business has very low barriers to entry, with most of those being a lack of "how-to" as opposed to "what-to" do. If Intuit can ease that learning curve, it'll find a very large audience willing to pay for the leg up.

Stealing a page out of a recent Motley Fool report, I believe that YUM! Brands will be the stock to beat this year. After reading the report, I am convinced that with its fast food market share in China as well as it smaller market cap compared to other big names in the industry makes it a winner in my book. The dividend doesn't hurt either.

Neutral Tandem – TNDM Huge growth (40% last 3 yr), spotless balance sheet (5 bucks a share cash), dominate their niche, makes larger telecoms operations more efficient at a cheaper cost than they could do it themselves, and has the all important network effect that sent companies like EBAY into the stratosphere.

At only 17 times earnings (13 times if you subtract the cash), this stock has a lot going for it!

It's Apple. The iPhone is going to keep gaining market share worldwide. Apple's computers are going to continue increasing market share. The iPod Touch is a major hit. And a tablet computer is going to be introduced shortly that may do for publishing what iTunes has done for music.

With the country coming out of a major recession and Apple already on a major roll, 2010 promises to be an outstanding year for this company. It would not surprise me to see the stock hit $300.

Ford is the pick.

Too many people fail to take a "holistic" approach to picking stocks and rely on their charts and a surface review of the financials.

But Ford passes my test because of its potential for growth as the recovery takes hold, the fact they are free and clear of government funding and intrusion, the growing popularity of their vehicles in Europe, the rave reviews of the new Taurus and other models, excellent management, an advertising war chest ready to go, the most trustworthy brand name -- and the unleashing of pent-up demand for new cars.

Beacon Power (bcon) is poised to put its flywheel technology to work on our Grid. Stock has been battered over the years, but all the tests are going as planned and they're currently rolling it out in several states. Frequency regulation with no polution and no need for generations... a no brainer for America. Stock is only .46 and it looks like they're trying to shake out as many shareholders as possible before it takes off.

MannKind (MNKD) will be the stock of the year (2010). Why? Well on January 16th, 2010, the FDA will announce that they have approved Afresa for the treatment of diabetes. They will approve the drug with a clean label, and they will also approve the use of the "DreamBoat" inhaler after bioequivalency testing.

Within a month of approval, Mannkind will announce that it has signed a very favourable marketing and distribution agreement with Pfizer (or substitute your favourite pharma giant). Sales will commence in July, 2010, and will exceed $500 million in the first half year. Later on, the world will look back on 2010 as the year that diabetes treatment underwent a revolutionary improvement. Mannkind's shares exceed $100 by 12/31/2010.

Radian - this mortgage insurance company currently trades at just above $6, I think it can go to $20. The stock price is still depressed as a result of weakness in the economy and worries over job growth. If the economy continues to recover, the housing/jobs market will improve putting a floor under losses Rdn will sustain. The company has already set aside a significant sum to deal with losses. Such losses may be reduced if the banks don't have to pay out on loans that the banks made which were virtually fraudulent. The company has sources of capital which will help meet debt obligations next year but may have to raise fresh capital - I would see this as a signal that the worst is behind it. They have $3.7b in cash. The company is winning market share and new business is high quality and will gradually assume a greater proportion of its insurance business. Book value is $25 and might fall to $20 once all claims are paid. At the peak they earned almost $4 a share but consensus estimates are for a loss of $1.85 a share next year. The range is from $5 a share loss to 21 cents a share profit. This highlights the potential for surprise (and disappointment). High risk but high reward.

And many more are there what we need to do is to analyse the the best stock and invest in that so that we will get higher return.

so all the best for 2010.

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