EDIT: We all make mistakes. A lot of people have gotten burned on their Bear Stearns holdings. While I merely recommended this stock as a short-term speculative buy, I do not want anyone to get the wrong idea and think that I am still recommending them. The “heat” surrounding the financials sector has died down, but I stay fast with my recommendations on LYG, SPG & AFL as the banking sector is the main bad spot here, but international banks are still out of the hot water. Best regards.

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The Financials sector of the stock market is HOT HOT HOT! After the sub-prime mortgage crash all but wiped out stock value, investors seem to have found a bottom (or support for you technical guys) and values have begun to turn around. This is certainly one of the hottest areas to invest because of the oversold , undervalued companies that were normally safe refuge against volatility. Lets find some winners.

Banks – Jimvesting Picks Lloyds TSB (NYSE: LYG)

Lloyds TSB is one of the leading UK banks. As such, many investors first figured they would be hedged against the sub-prime crash in the United States. They weren’t. However, they are now insanely undervalued and should rebound strongly with the rest of the financial companies. LYG is trading cheap at just 7.7 times earnings, and show big upside with minimal downside. I contend that UK banks have much more value than United States banks.

Lloyds TSB was upgraded to a “strong buy” by Standard and Poor’s, improving investor confidence and raising bids on the trading floors. LYG recently raised its dividend because of their strong free cash flow to 7.90%, this virtually guarantees profit for 2008 in my books. Competition is fierce in the UK financial services business, but there are a lot of growth opportunities. Their 12-month target was raised to $57, which is virtually a double from their current share price. Their strong free cash flow should allow them to make strong moves to drive demand, and a beta at 0.78 is irresistible. Get LYG on your 2008 wish list. Read the rest of this entry »

During recessionary times, some of the safest places to invest in the stock market can be found in materials company. The gold & silver sub-industry has been one of the few positive gainers year-to-date. Generally more stable than most industries through troubled times, the basic materials sector is in a great position to make money in 2008.

Chemicals – Jimvesting Picks Mosaic (NYSE: MOS)
The Mosaic Company doubled about 2.5 times in 2008, and they have room to grow. While they hit a high at around $110 and are down now to $80, I am thinking they will fall off a bit more ($72-$76) which is where you buy. So what exactly do they do? Mosaic produces chemical fertilizers used to feed crops and animals. The agriculture sector is one of the safest in a recession, and Mosaic has been red hot.

The S&P upgraded their credit rating to “BB+” on January 11th because of strong operating results, and Reuters/Multex finds them outperforming the market for 2008. Their competitors, Agrium (NYSE: AGU) and Potash (NYSE: POT) are simply not as safe as Mosaic in an economic downtrend. Agrium has a much smaller market cap at under 8 billion (Mosaic is at 35.5 billion), and you need a large-cap performer in these conditions. Potash has the market cap, but is trading at a higher multiple then Mosaic and their PEG ratio of 3.8 is too high for their own good. Time to get bullish on Mosaic.

Metal Mining – Jimvesting Picks Rio Tinto (NYSE: RTP)
Looking at the 5-year chart, the sky is the limit for Rio Tinto plc. Top competitor Vale (NYSE: RIO) is in talks to acquire Anglo-Swiss mining group Xstrata, but “warned a deal would be difficult to pull off in current market conditions.” I don’t think it will go through, but on the other hand, RTP is an acquisition target for BHP Billiton… a much more likely deal. This merger “would make large cost reductions possible” according to Standard and Poor’s, and would lend added exposure to oil and natural gas.

While the merger proposition looks promising, even it fails, Rio Tinto has a lot of upside after a drop-off in January. Producing minerals and metals from diamonds and copper to coal and salt, RTP has the market hedging we love to see. Commodity prices should remain relatively strong in a receding economy, so Rio Tinto has that safe play look with the strong upside of being acquired. Read the rest of this entry »

It’s round two of our look toward the 2008 stock market. One of the more obvious plays is in energy, where the rising cost of oil is highlighted almost daily. But don’t assume that the rising price of the commodity will boost oil companies! Never confuse the two, although they might interact on paper. We’ve got some winners… let’s get started.

Oil Equipment, Services & Distribution – Jimvesting picks THREE!
On December 14, 2007, Jim Cramer said that “drillers and oil producers are in a quick, shallow decline, and they’ll soon be flush with cash.” This sentiment holds true in three companies, which each offer unique areas of growth in 2008.

Jimvesting picks Transocean (NYSE: RIG)
The play with Transocean centers on their drilling capabilities. Their oil rigs can reach depths no other drills can. Add this to their locked in 2008 contracts, and you have quite a find! RIG is the leading provider of contract drilling services for the oil and gas industry. Acquiring rival Global-SantaFe (GSF) last year sets RIG up with some major growth benefits. But it is their solid fundamentals and a tried-and-true business strategy that makes this trade.

Jimvesting picks Halliburton (NYSE: HAL)
Halliburton has seen solid growth in the third quarter from the Middle East, Europe and Africa. Margin growth is expected to continue next year, and they trade at a discount to their peers with a P/E around 14.1 versus the industry’s 18.8. HAL carries slightly more risk than RIG and SLB because of an added political exposure, but Bush’s time in office will prove golden for Halliburton. An outperforming company in an outperforming sector, HAL gets my bid. Read the rest of this entry »

Hey net fools, this begins our look across various stock market sectors, as divided by the Wall Street Journal. Looking at 2008, these are the stocks in each sector that I think will do fantastic, and advise you to put on your watch lists. Starting our approach with the “consumer cyclical” sector, lets cut the sector into four groupings and get to it!

General Retailers – Jimvesting picks Best Buy (NYSE: BBY)

My 2008 cream of the crop here is Best Buy (NYSE: BBY), but I think there are plenty of other places to look! Gamestop (NYSE: GME) for one has given me tremendous growth for the holiday season. I saw it rise up in about a months time from $51 to $63! But I feel like that train has left the station already. Costco (NYSE: COST) you ask? Great, but right now it’s not their game to be won. Best Buy however is a strong buy, with a target price of around $64 versus a current share price of $52 and change.

Here are three reasons Best Buy will be on the map in 2008. First, they are the U.S. consumer electronics retailer, an area that is seeing more and more exposure as technology improves. It’s like buying a tech company without the risk! Secondly, as the technology improves, prices go down. While this may be bad for tech giants like Cisco (NYSE: CSCO), it is sending sales of things like digital TVs and notebook computers through the roof! Finally, their growth strategy is being executed successfully. Plain and simple, they are getting things done. Geek Squad, their tech support group, was definitely a big hit among consumers, and it is trading at a significant discount when compared to its competitors (forward P/E is 14X!).

Media – Jimvesting picks ValueClick (NYSE: VCLK)
The media sub-industry of consumer cyclical is a bit iffy right now with the recent writers strike among other things. Read the rest of this entry »

The holiday rush is over, leaving really no reason to jump into new investments before year end. In the meantime, lets find some value to rock the market in 2008.

As far as equity trading goes, January is typically in the money. Why? Well one reason is that people like me are pouring money into new portfolios now that 2007 taxes are in the books. Since we have some time before the year turns, lets use it to pick out some winners, shall we?

Okay… winners, winners…. how exactly do you find one? Well for me, it’s all about finding an established company that has a promising future and is undervalued. As an example, lets pick on one of my 2008 hot-shots, Convance Inc (NYSE: CVD).

First off, Convance is by all means an established health care firm with a market cap over 5 1/2 billion. I like to use Yahoo! Finance to pull that number, and stop short if I see less than 3 billion. Then I am going to look into their returns (this primarily means return on equity, assets, and capital). Returns are #1 for me because if a company can’t grow what investors are putting in, why would we give them our money? Over 10% across the board for the current year and past five years is a must. But I don’t check this on Yahoo, nope, the old forgotten MSN money takes the cake for me. For Convance, just mash in that ticker symbol and grab “Financial Results” –> “Key Ratios” –> “Investment Returns“. I want every number in that front column to be at or above 10%, which Convance takes with style.

Once I find companies that I can stand, I want Read the rest of this entry »