Best Stocks For 2011

Best Stocks For 2011: Annaly Mortgage (NLY)

By Jack Adamo

 

"Annaly Mortgage Management (NYSE: NLY) is our favorite investment idea for 2010," says Jack Adamo.

 

 In his Insiders Plus newsletter, he explains, "The company buys only Ginnie Mae, Fannie Mae and Freddie Mac bonds, all of which now have explicit U.S. government guarantees.

 

"The company uses modest leverage -- about half what banks use -- to increase shareholder returns. With short-term rates likely to remain low for several years, Annaly's interest-rate spread will be wide and profitable. The company has never had a losing year. "The market is still scared blind by anything that has the word "mortgage" attached to it; so, the shares, which would normally yield about 7%, now yield nearly 15%, and the dividend has been growing!

 

"That will not always be the case. Since it is a real estate investment trust, it must pay out 90% of its earnings each quarter, so it can't hold reserves, like corporations do. Hence, the dividend will vary quarter to quarter. 

 

"But using the average payout over the nearly 12 years it has been public, it would yield 10%. Moreover, the shares are less than half as volatile as the market, having a Beta of .45.

 

"Annaly's management is among the most savvy I've ever seen. They have called the contours of their business, as well as the credit and stock markets with extraordinary accuracy since long before the credit bubble appeared obvious to others. 

 

"And they exploited that knowledge to shareholders' advantage. As credit markets normalize, I believe more investors will seek the safe income Annaly o?ers, and the shares will rise even more than the 27% they've risen this year. We recommend purchase of the stock up to $19 a share."

 

 

Best Stocks For 2011: Vodafone (VOD)

By Amy Calistri

 

"Even in these di?cult economic times, people are upgrading their cell phones," says Amy Calistri, who selects Vodafone (NYSE: VOD) as her top pick for 2010.

 

The editor of Stock of the Month, adds, "Smartphone sales have been robust throughout the recession, as people want to access the latest technologies and features.

 

"Every one of those latest generation cell phones taps into a wireless service provider. And as essential as we consider it here in the U.S., cell phone service means everything to emerging and developing countries where landline infrastructure barely exists. 

 

"Africa is actually the fastest growing wireless market in the world.  With little landline infrastructure and an average population that is still some distance from computer ownership, cell phones have become Africa's link to the world.

 

"So where can you find a company that has the loyalty of the stable U.S. wireless market but also has inroads into the fast-growing African subscriber base?

 

""Vodafone is the largest wireless communications company in the world, with operations in Europe, the U.S., the Middle East, Africa, and Asia Pacific. Its owns a 45% stake in the largest U.S. wireless communications operator, Verizon Wireless.

 

"Along with its stable Verizon U.S. subscriber base, VOD also owns an interest in the growing base of African subscribers. Vodafone has a 65% stake in South Africa's Vodacom. Vodacom currently has 41.6 million subscribers, but that is expected to grow. 

 

""I especially like dividend-paying stocks in challenging markets. After all, capital gains can ebb and flow, but cash in hand is yours to keep forever.

 

"Vodafone's dividend yield is approximately 6% at current prices. While other companies are throwing their dividends under the bus, VOD management seems committed to keep the income flowing.

 

"Vodafone has instituted a 'progressive' dividend policy that boosts the dividend based on rising free cash flows, even if earnings fall.

 

"And of course because the dividends are first determined in British pounds and then converted to U.S. dollars, a continuation of the U.S. dollar's declining value will boost the payout to U.S. investors."

 

Best Stocks For 2011: Amdocs (NYSE: DOX)

By Melvin Pasternak

 

"Fundamentally, Amdocs (NYSE: DOX) has a bargain basement valuation based on its price to growth," says Melvin Pasternak, in selected the stock as his top pick for 2010.

 

In his Trade of the Week, he adds, "Technically, on a two year weekly chart the stock has broken out to the upside. Amdocs is the talk of the town -- and well it should be. Amdocs keeps phone companies and their customers talking to each other in more than 60 countries around the world.

 

"Its software helps telecom giants like AT&T Mobility and Sprint-Nextel with customer relationship management (CRM), billing, and sales.

 

"A couple of months ago, DOX broke out of a major downtrend line drawn from mid-2007 at the $40 dollar level. When combined with an uptrend line constructed from the 2009 bottom near $15, it can be seen that DOX has broken out of a large ascending triangle.

 

"The upleg of the ascending triangle is the uptrend line drawn from the January 2009 low.  DOX is now in a strong uptrend, well above the 30-week moving average which is sloping steadily higher. 

 

"Even during the recent consolidation the shares have stayed mainly above the 10 week moving average, another sign of technical strength.  The consolidation has also relieved the stock's short-term overbought condition in RSI.

 

"According to the 'measuring principle,' DOX should have a minimum price target of $33 -- more than 20% above current trading levels.  Often stocks in strong uptrends exceed their minimum targets.

 

"In 2009, DOX earned $1.57 a share.  In 2010, the 15 analysts who follow the stock project eps. Of $2.20 a share, a 40% increase.

 

"The current trailing P/E of the stock is 17.  The PEG ratio takes the Price Earnings Ratio and divides it by the earnings growth rate. 

 

"If you calculate a one-year 'PEG' ratio, the shares are a great value--the PEG ratio is .425 (17/40).  Anything below one typically represents good value and DOX is trading at less half that amount.

 

"Analysts who follow the stock have caught on. In December 4, Standpoint Research raised their price target from $30 to $34. A number of other analysts think DOX can trade back to the $40's by 2011. In the New Year, I believe DOX has a good chance to break above $28 resistance and move toward $34. My target is $33.95."

 

Best Stocks For 2011: Virginia Mines (VGQ)

By Adrian Day

 

 "Virginia Mines (Toronto: VGQ) remains my favorite gold exploration company," says resource expert Adrian Day.

 

 In choosing the stock as his top pick for 2010, the editor of The Global Analyst explains, "The company has a successful track record, top management and a super-strong balance.

 

"Virginia Mines has a successful track record, having discovered and subsequently sold to Goldcorp, the rich Eleonore deposit in northern Quebec. This discovery saw the stock go from the $2 range to the mid-teens.  Following the sale (which saw a spin out to shareholders), the stock is in the low $5s, ready to try again.

 

"Exploration by its nature is very high risk, with very long odds of discovery. Most companies finance their exploration by continual equity o?erings, which mean dilution for shareholders even if they are successful. 

 

"Virginia has a di?erent way: it is a prospect generating, looking for prospects, often by staking the ground, doing some exploration, and then looking for a joint venture partner. 

 

"The partner spends the high-risk exploration dollars in return for a majority ownership in the property. This results in a low-risk business model.

 

"Even though the company gives up most of the property, it holds on to its balance sheet and by doing this over and over, can build a portfolio of properties in which it owns minority interests with someone else spending the money.

 

"As Virginia has grown and built a strong bank account (it has has $44 million on its balance sheet), it is now in a position to do a little more exploration than in the past. This enables it to sift through its projects, and by advancing them more, obtain better deal terms.

 

"Virginia has build a broad portfolio of projects, all in mining-friendly Quebec, in a range of metals and minerals, but emphasizing gold.

 

"Right now, it has six properties ready to drill over the winter season, all in the prospective but under-explored James Bay area. Some of these are very close to the Eleonore discovery, on ground not included in the sale to Goldcorp.

 

"Virginia is spending the money on four of these properties, with two being funded by partners.  Some have brand new targets being drilled, others following up on previous drilling.

 

"While exploration remains long odds, Virginia has as good a shot as any, and at minimum, we expect the next six months or so to generate a lot of news on these properties that should see the stock buoyant.

 

"Any positive exploration results will see it move much higher. In the meantime, you can buy a fine company at less than NAV. Just the value of the royalty it retained on Eleonore and its cash in the bank are worth more than the entire market cap. All the exploration comes free.

 

"So you can buy a great company at below NAV. Despite the move up in the stock price in recent months, this is an excellent time to buy, ahead of this aggressive drilling campaign.  We expect 2010 to be very good for Virginia and its shareholders."

 

Best Stocks For 2011: Becton, Dickinson (BDX)

By Jonas Elmerraji

 

"Healthcare sector giant Becton, Dickinson and Co. (NYSE: BDX) is our top investment pick for the coming year," says Jonas Elmerraji.

 

In his growth stock-focused advisory, the Rhino Stock Report, he assesses the prospects for the medical equipment firm.

 

"If anything's certain for 2010, it'll be that nothing's certain as far as stocks are concerned. With 2009 coming to a close amid a substantial rally that's pushed the valuations of major indexes like the S&P 500 and Dow more than 60% higher since mid-March lows, it's inevitable for investor anxiety to spill over into the New Year.

 

"But while getting defensive calms fears of a second tumble in stocks, it also precludes your portfolio from gains. That's why our favorite play for 2010 is Becton, Dickinson and Co.

 

"The company develops, manufactures, and distributes complex high-margin medical equipment, including oncology and pathological diagnostic devices, but the company's bread and butter is in basic surgical instruments like needles, syringes, and scalpels. 

 

"That focus on medical necessities have given Becton a fairly soft cushion in spite of economic conditions that have been less kind to medical equipment makers who focus exclusively on high-tech, capital-intensive products.

 

"In fact, in the trailing four quarters, Becton has seen sales growth at a rate that's 3x that of the industry, while the S&P's average sales numbers actually slid backward. Thick margins helped deliver EPS of $4.93 in the year ending September 2009.

 

"And while scores of other S&P stocks rallied hard in 2009, Becton's year has been more modest – a 13.5% increase year to date. A look at Becton's financials suggests that the stock is trading in a reasonable range, particularly when compared against overbought competitors."

 

Best Stocks For 2011: BCE (BCE)

By Vivian Lewis

 

Given her concerns about overall market valuaton, global expert Vivian Lewis is selecting her top pick from among stocks she calls "dividend payers and fallen angels".

 

In her Global Investing newsletter, she explains, "I consider BCE (NYSE: BCE), with its 6% yield, a great buy." Here's her review of the Canada-based telecom company.

 

"I'm worried about the speculative coloration of the rise in stock prices globally since the bottom in March 2009. I do not think the markets will continue rising as they have since then, in a straight line to the upper right-hand corner of the page.

 

"I expect a serious correction because the global economy is still mired in di?culty. There will be more bad news taking share prices down in the coming year.

 

"To find stocks with ballast for the sell-o? I expect in 2010, I am focusing on dividend payers and fallen angels. Fallen angels have risen less sharply than companies without damaged reputations, and pay out more.

 

"A year after crash of BCE, the Canada telco supposed to have been taken private by Ontario Teachers Pension Plan and US partners, who pulled out, the former Bell Canada is a good buy.

 

"The deal collapsed in the financial crisis. BCE CEO George Cope valiantly then cut 2500 jobs; did a wireless deal with Telus and bought out the remaining half of Virgin Mobile Canada; bought electronics store chain The Source; and boosted BCE dividends.

 

"BCE stock has risen 30% this year in loonies (C$s) and nearly 50% in US dollars. (It trades as BCE both in Toronto and on the NYSE.) But it is still a third cheaper than the former deal price target. That reflects investors' bad memories. Most analysts rate it neutral despite their expecting it to rise to $29.50.

 

"Further hurting BCE was the decision on Dec. 11 by Canadian regulators to allow Globalive to o?er cellular phone service throughout Canada, reversing an earlier bar on the company part-owned by Orascom of Egypt.

 

"While the 2009 Xmas telephone market will not see many o?ers from Globalive, next year there will be cellphone price cuts. This could hurt BCE's gross margins, which are at an astonishing 74%.

 

"However, other telcos without BCE's land-line and multiple cellular options will be hurt more. I consider the stock a great buy yielding 6% with a probability the dividend will be raised."

 

Best Stocks For 2011: Proshares UltraShort Russell (TWM)

By Ken Kam

 

Given his view that market risk is rising, Ken Kam has chosen at top pick  for 2010 that is not necessarily selected in the hope of gains; rather, he chooses a "short" position for its role in hedging one's portfolio.

 

The Marketocracy analyst looks to the ProShares UltraShort Russell 2000 ETF (NYSE: TWM), which seeks twice the inverse performance of the Russell 2000 index. For example, if the Russell 2000 index falls by 1%, this ETF would expect to rise 2%.

 

"Systemic risk is rising and has become the big concern for investors - overwhelming most other factors."In the past, systematic risk was generally ignored because there was little we could do and the emphasis was placed on diversifying away other kinds of risks.

 

"Now that we have seen that systematic risk can result in the whole market losing half its value, we can't a?ord to ignore it anymore.

 

"All investors, including passive investors, are going to need to actively manage their portfolio for systematic risk - specifically that means managing their exposure to the market and their sector allocations. We are facing systemic risks from which diversification will not o?er much downside protection.

 

"There are going to be times when you don't want your equity portfolio to be 100% invested in the market, and there are sectors whose prospects have worsened as a result of the financial crisis.

 

"Investors need to make an e?ort to find the sectors that will benefit the most from the government's e?orts to stem the crisis.

 

"Investors should put a small portion of their portfolios in the ProShares UltraShort Russell 2000 ETF to provide some protection from another devastating systemic crash.

 

"One of the financial crisis' biggest lasting impact has been  the collapse of credit for small companies like those in the Russell 2000. The prospects for smaller companies are also more tightly linked to the health of U.S. Economy.

 

"A contracting (or slow growing) U.S. economy combined with continued lack of bank financing create strong headwinds for the companies in the Russell 2000 even if the overall market does well.

 

"However, if there is another crisis, small companies will fall hard, just like last time, and this ETF is designed to rise by 2x the drop in the Russell 2000."

 

 

Best Stocks For 2011: Servotronics (SVT)

By Tom Vass

 

"Servotronics (NYSE: SVT) as our top investment idea for the coming year," says Tom Vass.

 

In his The Technology Stock Advisor, he explains, "The stock meets our proprietary criteria for both its technical innovation as well as our value approach to stock selection.

 

"Servotronics engages in designing, manufacturing, and marketing advanced technology products in the United States and internationally.

 

"Its  Advanced Technology Group markets various servo-control components, which convert an electrical current into a mechanical force or movement and other related products.

 

"The company's Consumer Products Group sells various cutlery products, including kitchen knives, such as steak, carving, bread, butcher, and paring knives for household use, as well as for use in restaurants and institutions.

 

"Our selection of Servotronics is based upon our patented methodology for investigating technology stock. We developed a theory of technological innovation using Leontief's theory about input output economics that helps us predict technological investment opportunities.

 

"Our theory helps us conduct our first screening of the universe of stocks in order for us to narrow the selection to companies that are in nine high technology industrial clusters.

 

"Next, we apply rigorous standards to those stocks based upon a value approach to investing that shares many elements in common with the Graham and Dodd approach to investment selection.

 

"We first added the stock to our portfolio last April. but note that Servotronics continues to meet all the selection criteria needed for our strategy. We continue to recommend purchase under $9 per share."

 

Best Stocks For 2011: ChemTrade Logistics (CGIFF)

By Roger Conrad

 

Roger Conrad, editor of The Canadian Edge, is a leading specialist in the niche investment area of high-income Canada-based trusts.

 

For his top investment idea for the company year, he turns to chemical company, ChemTrade Logistics (TSX: CHE-U, OTC: CGIFF). 

 

"ChemTrade Logistics is a major producer of specialty chemicals, particularly sulphuric acid. It's also a Canadian income trust yielding over 12% with most of its operations overseas. That adds up to a unique triple play for investors in 2010.

 

"First, is the high yield, paid monthly. Even with the market for specialty chemicals chronically weak in 2009, Chemtrade was able to generate cash flow to cover its distribution by a healthy margin.

 

":Second, cash flow is set to surge as demand from industry rebounds for sulphuric acid. Second half results already show improvement and that trend is set to continue into the new year.

 

"Third, Chemtrade management expects to pay the same level of distribution in 2011, when Canada's trust tax kicks in. If it succeeds, investors will receive a windfall capital gain, since a big cut is already priced in.

 

"At a recent conference call, CEO Mark Davis stated 'the e?ect of the new tax would not be significant' since 'Chemtrade receives a large portion of its earnings from non- Canadian sources.

 

"Accordingly, in 2011 we believe that the new SIFT tax will apply to less than one-third of the Fund's income, resulting in an e?ective tax rate of less than 10 percent.'  Buy ChemTrade up to $11."

 

Best Stocks For 2011: China Adv. Construction: (CADC)

By Keith Fitz-Gerald

 

 "China is spending $200 billion over the next few years to upgrade its rail system; and those new projects will be literally laying on a bed of cement,' says Asia expert Keith Fitz-Gerald.

 

The editor of The New China Trader adds, "This could lead to enormous growth potential for any cement company that Beijing involves in the

process -- such as China Advanced Construction Systems (NASDAQ: CADC).

 

"CADC produces and supplies specialized ready mixed concrete for use in all kinds of infrastructure projects including railways, roads, airports, bridges, tunnels, and dams. The company has already benefitted from over 9 new railway contracts from Beijing this year alone, totaling over $19.7 million.

 

"That may not sound like much, but realize that CADC is a small cap stock ($49.28 million market cap) so $19.7 million of new railway orders represents 39.9% of the company's total market cap. That means we could see CADC's earnings explode in 2010.

 

"In fact, if Beijing continues to pile money into railways, CADC could truly undergo some transformational events that lead to a double or more in 2010 – and more in the next few years.

 

"Meanwhile, China's massive $586 stimulus package has rocketed the Chinese economy back on track – and the result can be seen across the board from government sponsored infrastructure projects to consumer spending.

 

"By the end of 2009, the China is expected to have used 1.54 billion tons of cement on transportation infrastructure and logistics and warehousing projects, according to the country's top economic planning agency.

 

"In the transportation, logistics, and warehousing sectors alone, China is expected to have increased 2009 cement demand by 27% from the previous year, according to Guo Wenlong, a researcher with the Institute of Integrated Transportation, a?liated with the National Development and Reform Commission.

 

"China is literally building what amounts to an entire new country's worth of infrastructure and commercial projects.

 

"Economists are forecasting that China will use 40% of the entire global supply of cement in 2010. That basically makes China the world's largest construction site –something I see every time I am there.

 

"While concrete isn't sexy or glamorous, the industry's growth is far from boring. China's concrete market has maintained an average growth rate of 25% over last ten years.

 

"That adds up to a 931% compounded growth over the last 10 years. Compared to most investments, that sounds pretty glamorous to me.

 

As for its rail expansion, China plans on laying more track in the next five years than the rest of the world combined. That makes China's current railway plans the largest railway expansion in the last 100 years.

 

"The buttresses on which China's railway projects will be built are forecasted to require as much as 117 million tons of concrete alone – and that doesn't even begin to account for cement demand tied to China's other infrastructure projects.

 

"Basically all of China's growth, whether it's railways, roads, bridges, power-plants, dams, or commercial and residential real estate projects sit on a foundation of cement – and that means dynamic small-cap companies like CADC have plenty of room to grow and enormous profit potential moving into 2010 and beyond."

 

Best Stocks For 2011: Noble (NE)

By Charles Mizrahi

 

Value investor Charles Mizrahi looks to Noble Corporation (NYSE: NE) as his top investment idea for the coming year.

 

In his Hidden Values Alert, the advisor o?ers his bullish assessment for the company, a Cayman Islands-based company involved in o?shore drilling contracting for the oil and gas industry.

 

"Noble Corp. has a fleet of 63 mobile o?shore drilling units located worldwide. Its fleet consists of 13 semisubmersibles, four dynamically positioned drillships, 43 jackups and three submersibles. The fleet count includes five units under construction.

 

"Some 87% of its fleet is deployed in areas outside of the United States, principally in the Middle East, India, Mexico, the North Sea, Brazil, and West Africa.

 

"The company generated more than $1.6 billion in free cash flow over the past twelve months. NE has a $9.6 billion backlog that goes all the way out to 2016. It employs very little leverage and returned a hefty 29% return on equity.

 

"Overall, Noble is a well-run business, and a price of $42 or lower per share represents a very good value.

 

"If Noble Corp. can grow its earnings at only 5% per annum and maintain a price to earnings multiple of 9, then the stock will handsomely reward investors during the next five years."

 

 

Best Stocks For 2011: Oceaneering International (OII)

By Brandon Clay

 

"Oil recently su?ered a pullback, but we think it's temporary," says Brandon Clay, who turns to the oil sector for his top pick for 2010.

 

The editor of Invest with an Edge suggests, "One stock that should pull out of congestion when energy moves again in 2010 is Oceaneering International (NYSE: OII), a company involved in deepwater drilling services.

 

"The Texas-based oil and gas services company gets most of its revenue by providing goods and services to companies that are drilling for oil and gas o?shore. One of their specialties is deepwater remotely-operated vehicles (ROVs), or 'robots' in layman's terms.

 

"Oceaneering has turned a profit every year since 1999, including a record $3.65 a share in 2008. Analysts are forecasting a drop to $3.38 a share for 2009, but they also expect a nice rebound to $3.51 a share in 2010.

 

"The shares still appear inexpensive at just 16 times forward earnings. The firm's balance sheet is in good shape with just $140 million in debt and nearly $96 million in free cash.

 

"Oceaneering fills a unique niche in its industry. They help oil and gas explorers drill in deep water locations hundreds of miles o?shore. Its services are expensive, but producers like Chevron and ExxonMobil have little choice if they want to replace their reserves.

 

"OII is in a market sweet spot. For an indirect play on rebounding crude prices, go with oil services performer Oceaneering International."

 

Best Stocks For 2011: Medifast (MED)

By Mike Turner

 

 "My number one stock pick to start 2010 is Medifast Inc. (NYSE: MED), a weight and disease management company," says Mike Turner.

 

The editor of Mastering the Markets explains, "The stock has skyrocketed from the $5 area to over $30 in just the last nine months." Despite the gains, the advisor remains bullish on the stock's prospects.

 

"My proprietary analysis software rates this stock as a fundamental 'Strong Buy,' with an overall score of 145 out of 200 -- one of the highest rated stocks in my database.

 

"With regard to Medifast's fundamentals, I like the following:

 

   1     * The quarter-over-year-ago-quarter revenue growth rate of 45%. This is nearly twice the peer group average for MED. 

 

   2     * Quarter-over-year-ago-Quarter Earnings Growth Rate of 14%, which is above the average of its peer group. 

 

   3     * Its 5-year average annual sales growth is nearly 33%, almost 3 times the average of its peer group. 

 

   4     * Its 5-year average annual net income is over 18%, compared with 14.41% for its peer group. 

 

   5     * I consider any return on equity (ROE) of more than 15% as excellent. MED's ROE is over 23%, more than twice its peer-group average.

 

"From a technical analysis perspective, my program gives Medifast a score of 75 out of a maximum of 100. This places MED in the top 10% of the stocks I watch, and very near the top of that group. Specifically, I like the following:

 

   1     * The price trend for shares of MED has been moving higher for better than nine months. This trend is well above my system's trend-line and well above MED's 200-day moving average. This is indicative of a strong technical trend that shows no signs of abatement. 

 

   2     * Institutional ownership is at 30% -- a large-enough chunk to convince me that the big traders believe this stock is heading higher. 

 

   3     * The average share price of all the stocks in Medifast's Industry (Medical Equipment and Supplies) and sector (Healthcare) is moving higher. This is an indication that more money is likely moving in than moving out, helping to put upward pressure on MED. 

 

"Disclosure: Mike Turner owns shares of MED either personally or via his managed account portfolio."

 

 

Best Stocks For 2011: Mindray (MR)

By Alan Newman

 

"Mindray Medical International Limited (NYSE: MR), a China-based medical devices firm, is our top investment idea for the coming year," says Alan Newman.

 

In his CrossCurrents newsletter, he notes, "The company is headquartered in Shenzhen, China and is one of many Chinese companies now specializing in the development, manufacture and marketing of medical devices worldwide.

 

"Its products range from patient monitoring units to in vitro diagnostics for bodily fluids, analyzers for same, ultrasound systems and digital radiography systems.

 

"The company has been around less than 20 years. It has operations in North America, Europe, China, and other Asian countries. Growth has been excellent. Revenues increased 57.5% in 2007 and 79% in 2008.In the same span, net income rose 74.9% and 34% respectively. 

 

"The forward P/E is estimated to be 23.8. An $0.18 dividend was paid in March 2008 and a $0.20 dividend was paid in March 2009. 

 

"Like most companies, the shares were crushed in the autumn swoon of 2008 that gripped world markets, but bottomed in late November 2008 and remained on a steady incline until mid-August 2009, rising roughly two-and-a-half fold.

 

"The shares have since consolidated quite well, trading in a narrow range while our charts suggest accumulation by smart money. 

 

"We believe the stock is a buy at current levels and would not at all be surprised to see the October 2007 peak of $45.19 challenged and exceeded in 2010."

 

Best Stocks For 2011: ImmunoGen (IMGN)

By John McCamant

 

"Out top stock pick for 2010 is ImmunoGen (NASDAQ: IMGN)," says biotech specialist John McCamant.

 

In his The Medical Technology Stock Letter, he explains, "The company's potent cancer-cell killing antibodies were developed for targeted delivery to tumor cells.

 

"Specifically, IMGN's TAP technology uses antibodies to deliver one of the company's proprietary cancer-cell killing agents specifically to tumors. These agents are 1,000 –10,000-fold more potent than standard chemotherapeutics and are designed to be attached to antibodies using one of the Company's engineered linkers "IMGN's lead drug candidate is T-DM1 which is Genentech's Herceptin with the addition of IMGN's powerful TAP technology. 

 

"The company recently delivered positive Phase 2b data for TDM-1 in breast cancer patients that have failed all previous treatments. This positive data should allow the drug candidate to be filed for FDA approval in the first half of 2010. 

 

"Adding to our enthusiasm is that Roche is also starting a single agent T-DM1 trial in adjuvant mBC, the biggest and most lucrative breast cancer market.  

 

"This exceeds the expectations for most of Wall Street as they only expect sales for late-stage breast cancer, a much smaller market.  We believe that Roche's ultimate goal is to gain approval of T-DM1 for all lines of HER2+ mBC, similar to Herceptin. 

 

"In addition to T-DM1, five other compounds that make use of ImmunoGen's TAP technology are in clinical testing. 

 

"In addition to the company's product pipeline, compounds utilizing the TAP technology are in clinical testing through IMGN's collaborations with Genentech (a wholly owned member of the Roche Group), sanofi-aventis, Biogen Idec and Biotest.

 

"IMGN's powerful platform technology is in itself a significant asset. In the past few years, there have been numerous premium buy-outs of companies that also have monoclonal antibody platforms.

 

"These buyouts have been sparked by the huge growth of anticancer antibodies such as Avastin, Rituxan, and Herceptin, all multi-billion dollar drugs. 

 

"We believe there is a strong chance that someone steps up and buys IMGN at a premium in 2010 as they have what we believe to be the most attractive antibody platform available.

 

" T-DM1 is the cornerstone of IMGN's value and is likely be approved by the end of next year.Additionally, the market for T-DM1 appears larger than expected and the most recent data represents a major transformative and de-risking event for IMGN. 

 

"IMGN is poised to create significant shareholder value in 2010 which will either drive the stock price higher or result in a premium buyout."

 

 

Best Stocks For 2011: iShares Germany (EWG)

By ETF Investor

 

"iShares MSCI Germany (NYSE: EWG) has bounced back in 2009 from an especially rotten 2008," says exchange-traded fund specialist Mark Salzinger.

 

In his The ETF Investor's Report, he explains, "We think Germany's major export-oriented stocks are poised to perform well again in 2010, despite concerns about domestic spending.

 

"In 2009, iShares Germany gained 18.1% for the year through mid-December—after bounding up 78% from the March market lows. We think Germany's major export-oriented stocks are poised to perform well again in 2010, despite concerns about domestic spending.

 

"Besides, none of EWG's top 10 holdings (excluding utilities) generate more than 47% of their revenues in Germany. These companies are global leaders in their respective industries and should benefit from renewed worldwide economic growth.

 

"Many of these companies, like top holdings Siemens, Daimler and SAP, are especially attractive since their major products are in significant demand in rapidly growing emerging-markets countries—and none of them earn more than 20% of their revenue from Germany.

 

"Despite strong performance in 2009, EWG still has an attractive valuation. Its average price/book value (P/B) is about 1.9. This is considerably lower than that of iShares S&P Europe 350 (3.0 P/B) and iShares MSCI EAFE (2.7).

 

"EWG's portfolio holds about 50 stocks. Six sectors account for no more than 19% and no less than 11% of the portfolio (EWG does not have any energy exposure).

 

"Financials lead the way with about 19%, but the ETF also includes significant exposure to attractively valued industrials, consumer-discretionary and healthcare sectors."

 

Best Stocks For 2011: iShares Silver (SLV)

By Gene Arensberg

 

"2010 will be the year that silver shines," says metals and  mining specialist Gene Arensberg. In his Got Gold Report, a specialty service from The Gold Newsletter, he says, "We believe that the metal-backed exchange traded fund iShares Silver Trust (NYSE: SLV) is a safe and convenient way for most investors to gain exposure to the silver market.

 

"When the general public becomes fully involved in gold, silver shines brightly … for a time.  At least it did so in the last public rush into gold which peaked about 30 years ago.

 

"SLV tracks the spot price of silver, less accumulated fees capped at 0.5% per annum.

 

Since the exchange traded fund's inception in April, 2006, the trust has accumulated over 300 million ounces of silver.

 

"That is about 9,500 metric tonnes of bar silver held in ultra-secure soccer field sized vaults by a custodian in London. In December, 2009, the SLV silver stash was worth about $5.3 billion.

 

"Silver fell out of popularity until just recently, but we see that changing now. For more than 20 years, from 1980 to about 2003, investors all over the globe were conditioned by a weak silver price and not much joy of ownership.

 

"'Who cares?' sums up the public attitude before this bull market for silver began in 2003.  Even now that attitude prevails among the same investing establishment that has grudgingly accepted gold as an investment class.

 

"During that long bear market for silver, government dishoarding of excess silver metal, metal left over from when governments actually had silver in their coinage, acted as a cap to the price.

 

"That excess supply from o?cial sources is all gone now, but the e?ects of the artificial over-supply are only just now retreating.

 

"Silver stayed so low-priced for so long it made the second most popular precious metal di?cult to mine profitably. Because of that, annual production of silver has not kept pace with increasing industry and investment demand.

 

"A factoid that some will find di?cult to believe is that because prices for actual physical silver metal have been so cheap for so long, and because global industry consumes more silver each year than miners are able to produce, there is actually considerably less silver metal in existence than there is gold.

 

"Gold recently rose to new all-time nominal highs above $1,200 the ounce, but its sister precious metal has lagged so far. In fact it hasn't even gotten to half of where it did in the last bull market peak in January, 1980.

 

"Silver reached about $50 an ounce briefly then, but so far this cycle has yet to beat its May 2008 $21.44 pinnacle.  That is with gold having bested its 1980 high of $850 by more than $350 an ounce. As such, we believe that silver has some serious catching up to do.

 

""What is so enticing about the silver story is that it currently takes about 64 ounces of silver to buy an ounce of gold. That is called the gold:silver ratio. During the bull market for precious metals thirty years ago the ratio fell to about 16:1 or 16 ounces of silver to one ounce of gold.

 

"If gold simply stood still at $1,100 an ounce and the ratio were to fall to 1980 levels, silver would climb to about $69 an ounce. That suggests achievable upside for silver and SLV of nearly 4X from today.

 

"But wait, there's more. Consider that compared to period of the last bull rush for precious metals the world has about 50% more people in it. Governments have inflated their fiat currencies since then by a factor of 10.

 

"World inventories of actual physical silver metal for investment have actually fallen to less than half of the amount that was available in 1980.

 

"Recently the government of China re-legalized the ownership of precious metals for its 1.3 billion people and is actually encouraging its citizens to accumulate them.

 

"The number of people of a?uence and means in the developing countries like Brazil, Russia, China and India has increased exponentially in the last thirty years.

 

"So, we see the currently unloved silver market as ripe for an investment renaissance of epic proportions. Think about it.

 

"Today versus 1980 we have globally 50% more people who will be using 1,000% more dollars, yen, euro, pounds sterling, yuan, etc., to chase less than half as much silver metal in a world where anyone can buy a silver ETF with just a mouse click from their study, even in their underwear.

 

"Isn't that a potent recipe for silver? We think 2010 could very well be the year that a global popular rush, a veritable tsunami of liquidity into silver gets underway in earnest as more and more people discover just how little of it remains above ground for investment.  Our favorite way to participate is SLV."