Five Winning Stocks

This $10 billion market-cap steel company also produces specialty materials including super stainless steel, nickel and titanium alloys. Last year, about 75% of sales came from the U.S. and 25% from a variety of international regions.

Recent results have exceeded expectations, and the earnings outlook is very positive for ATI, with an $8.23 consensus earnings estimate for 2008, up 12% from the estimated $7.39 for 2007 which was up dramatically from $5.44 in 2006.

The stock set a new high in January when Allegheny announced that it had signed a long-term sourcing agreement with GE Aviation for the supply of premium titanium, nickel-based super-alloy and vacuum-melted specialty alloy products for commercial and military jet engine applications. The total revenue generated from this agreement, plus direct sales to GE Aviation for the period of 2007 through 2011, may exceed $2 billion.

Note that this is a high-beta stock. It has a propensity to lead the market up or down. The 12-month total return exceeded 70% as of April 12, 2007. Expect the company to release earnings on April 25 and to further reinforce its positive environment.

• Precision Castparts (PCP Quote) (Industrials)

We have had a buy rating on this stock for the past two years, during which time the stock has nearly tripled. This is a play on the aerospace and defense industry, which continues to be in full swing as the U.S. continues fighting two wars. While the stock does not have a significant dividend, we do like the overall total return outlook going into next year.