2. Apple (AAPL) sells consumer electronics.
The company's stock returned 53% in 2010, topping the large-cap tech category. Apple is a consensus pick for 2011. Of analysts covering Apple, 48, or 91%, advocate purchasing its shares and five recommend holding. None say to sell. Piper Jaffray has the highest price target, expecting a gain of 36% to $438. Goldman believes, contrary to some analysts, that the gross margin has bottomed and could climb in the near-term. Its $430 target is equivalent to 20-times its 2011 earnings per share estimate of $21.46.
1. Starbucks (SBUX) is Goldman's favorite pick within a restaurant industry that it believes has "the best supply/demand dynamics in 25 years." The number of U.S. restaurants has fallen to 1986 levels, following recession closings. According to Goldman, Starbucks is due to return 36% in 2011 on multiple expansion and steady earnings growth. The bank thinks the Street is underestimating same-store sales growth for the coffee chain, forecasting a 7% to 8% uptick in 2011. Emerging market expansion will add fuel to the fire, bolstering 2011 sales.
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