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Nine Stocks for 2014

NEW YORK (TheStreet) -- With about 90 stock exchanges around the world and about 63,000 publicly traded companies, investors are spoiled for choice. That doesn't make picking them any easier.

When I make suggestions to clients, I like to explain exactly how I came up with specific stocks so that they can make sure they agree with the logic as well as the conclusion.

To assist in sorting through stocks, my firm has devised several programs to help characterize investment categories. Many investment managers sort and group stocks into categories in order to make manageable groups with similar characteristics.

I'm going to share three of our programs with you, highlight the sectors offering some of the best values and suggest specific stocks from each for your consideration.

Our Dividend Buster Program focuses on dividend-paying stocks. Within that group, we've seen the telecom sector continue to offer attractive values.

o Canada's largest telecom company, providing services to 70% of Canada.

o Along with growth in its wireless business, highlighted by an increasing subscriber base and continued investment in its network coverage, BCE is also expanding in its media segment leading to greater video usage.

o Dividend yield: 5.11%

  • Verizon  (VZ):

o 2013 marks the seventh consecutive year that Verizon has increased its quarterly dividend.

o Dividend yield: 4.4%

Our Revenue Buster Program is focused on growth stocks. Within that area, we have a positive outlook on large-cap technology shares, which we expect to go through a significant earnings growth cycle next year.

o Still attractively valued with a solid balance sheet and excellent cash flow thanks to strong sales of the flagship iPhone 5s which sold a record 9 million in its first weekend in stores.

o Revenue rose 9.2% to $170.1 billion in the 52 weeks ended Sept. 28.

  • Cisco Systems  (CSCO):

o Though recent corporate spending pressures have affected the company, growth in markets including networking, data centers and cloud computing remain positive for Cisco, a leader in the industry.

o Revenue rose 5.5% to $48.6 billion in the 52 weeks ended July 27.

Lastly, our Small-Cap Buster Portfolio is focused on small-cap companies that have a strong balance sheet, are less volatile than the average of their peer group and have a strong growth outlook.

In the small-cap sector, we like health-care stocks. Many of these companies pay a dividend, have strong positive cash flow and are expected to have double-digit revenue growth annually over the next five years.

  • Computer Programs and Systems  (CPSI):

o Creates health-care information-technology systems for small and midsize hospitals.

o Solid balance sheet and an attractive dividend yield.

o Dividend yield: 3.4%

  • Charles River Laboratories  (CRL):

o Provides animals research models needed for drug research and development along with pre-clinical testing services.

o Experiencing growth in the research units thanks to partnerships with large biotech companies including AstraZeneca  (AZN).

  • Haemonetics Corp  (HAE):

o Provides blood-collection devices.

o Expect gains in 2014 from increasing margins and a decreasing cost structure.

  • Masimo Corp  (MASI):

o Designs and creates non-invasive patient monitoring products used in emergency rooms, operating rooms and intensive care units.

o Sizable cash on hand coupled with no long-term debt gives Masimo the flexibility to make acquisitions along with organic product development.

o Dividend yield: 1%

  • Owens and Minor  (OMI):

o Supplies medical and surgical supplies to hospitals nationwide.

o Should benefit in the long run from the passage of the Affordable Care Act which should increase health-care use.

o Dividend yield: 2.68%



We'll continue monitoring these sectors and stocks throughout the year.

Pursche through his firm's funds has positions in all the stocks mentioned.

This article was written by an independent contributor, separate from TheStreet's regular news coverage.

The author and/or funds controlled by his firm hold all stocks mentioned.

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