The dog days of summer are drawing to a close, and despite some of the rocky market conditions in recent weeks, there is a lot to be optimistic about. Volume is picking up, second-quarter earnings were very strong across Wall Street, midterm elections hold the promise of change and eurozone troubles appear to at last be behind us.
So where do investors go from here? Well, that depends on your strategy. For those looking to hunker down and stay on the defensive, there are a number of great high-yield dividend stocks and bedrock investments out there. For the aggressive traders looking to get a piece of the coming surge, there are biotech stocks and emerging market picks that are just at the beginning of their growth curve.
Whatever your investment strategy, here are seven top stock picks from our InvestorPlace experts.
Stock Pick #1 - AmerisourceBergen
Recommended by: Louis Navellier, editor of
Blue Chip Growth
Strategy: Buy-and-hold investing with a focus on fundamentals
Health care provider
is one of my favorite growth stocks right now. And the numbers show why. ABC recently reported financial results for its fiscal third quarter, showing a sizable surge in both sales and earnings. The company said that its net income was $163.2 million, or $0.57 per share, representing a 37% year-over-year increase. Excluding a one-time benefit, AmerisourceBergen said it earned $0.52 per share, which beat analysts' earnings per share expectations with a nice +6% surprise. Additionally, sales for the company increased 7% to $19.6 billion from $18.39 billion a year earlier.
As a result, AmerisourceBergen raised its earnings and sales forecasts for the full year. ABC now expects a year-end profit of $2.16 to $2.20 per share and said its sales will increase between 8% and 9%. This is growth you can bank on. After a dip in shares this August, now is a great buying opportunity for ABC stock.
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Stock Pick #2 - Jiangbo Pharmaceuticals
Recommended by: Robert Hsu, editor of
Strategy: Active trading to profit from Asia's economic boom
Founded in 2003,
is a leader in drug development and manufacturing in China. The acquisition of competitor Hongrui in January 2009 increased Jiangbo's product portfolio from six to 28, and the company has recently received the final approval for production of its new Felodipine Sustained Release Tablets. The launch of this medication is expected to add 10% to 12% in forward sales. In addition, Jiangbo has three new products in the pipeline awaiting final SFDA approval, giving JGBO a bright future.
As for the company's financials, Jiangbo has a very healthy balance sheet. As of March 31, the company has almost $108 million cash, $186 million total assets and only $62.6 million total debt. That's stunning for a biotech firm. Compared to its current market cap of $116 million, the company is trading below its book value. The company grew revenue from $55 million in 2007 to $89.5 million in 2009. Considering the company's favorable numbers and great product development cycle, Jiangbo Pharmaceuticals is a great buy at current pricing.
Stock Pick #3 - United Technologies
Recommended by: Richard Young, editor of
Strategy: Bedrock investments for the long term
A globally diversified conglomerate with interest in aerospace and building systems,
is one of my favorite low-risk investments right now. The F135 engine is the newest reason to hang your hat on UTX stock, and will power the
F-35 Lightning II fighter. That's a great future revenue stream -- but the long-term trends of United Technologies are what really matters to buy-and-hold investors. My relative-strength calculations show that United Technologies has performed 45% better than the
over the past five years -- with an average annualized return of +10% across that period.
Since United Technologies builds jet engines, elevators and HVAC systems, it has a stable core business and isn't going anywhere. Top it off with a hefty dividend history of payouts since 1936 -- with a current yield of 2.6% -- and you have a long-term investment you can believe in.
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Stock Pick #4 - Education Realty Trust
Recommended by: Nancy Zambell, editor of
Buried Treasures Under $10
Strategy: Low-priced stocks that are great value plays
Education Realty Trust
, created as a REIT in 2004, is one of the largest owners and operators of collegiate student housing in the United States. This makes it a stable but potentially lucrative investment, with 65 properties in 21 states. First, due to SEC regulations for real estate investment trusts, EDR returns a hefty portion of its profits via dividends -- a 2.9% yield as of this writing. Secondly, the numbers show a big upside for shares.
According to the U.S. Labor Department, college enrollment hit an all-time high last year, with more than 70% of high school graduates opting for college rather than trying their luck in a recession-heavy economy. But the big upside of Education Realty Trust is that the profits don't rely on student loans like shady for-profit education stocks that have been in the news in recent months. The majority of the company's revenues (86.9%) are derived from its student housing leasing. EDR's preleasing is 3.1% ahead of last year at this time, and net rental rates are 1.9% ahead of last year. Those numbers point to future growth and make this stock a good buy for September as school starts.
Stock Pick #5 - ExxonMobil
Recommended by: Richard Band, editor of
Strategy: Long-term investing that safely outperforms the market
is one of the stocks I always seem to be talking about, but that's because I believe it's one of the highest-potential blue-chips out there. The world's largest oil company came in with blowout Q2 profits of $7.6 billion, almost +10% ahead of analyst estimates. Some pundits worry about XOM's hefty exposure to natural gas. (The XTO acquisition, now complete, vaulted Exxon into first place among U.S. gas producers.) However, the domestic gas glut may be ebbing, and underground storage is running about 6% below last year's levels.
Looking forward, high-cost producers are shutting down wells, leaving the field to more-efficient operators like XOM as crude oil prices stay relatively low. Trading at less than 10X estimated year-ahead earnings and holding $13.2 billion of cash (up $2.4 billion just since the close of 2009), Exxon is a financial fortress with a penny-stock price tag. Sweetening the pot is a current dividend yield of 3%, with increases 28 years in a row.
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Stock Pick #6 - American Capital Agency
Recommended by: Bryan Perry, editor of
Strategy: Income-oriented investing with mammoth dividends
There's an ugly rumor going around about how a big dividend must mean there is a tremendous amount of risk attached to a stock. If, by design, a security is structured to pay out most of its profits to shareholders and it can produce 20% profits, then I have no issues with giving management the benefit of the doubt. That's why I like
American Capital Agency
as an aggressive buy for September.
I certainly love the 20% dividend yield, but I also believe there is room for the stock to trade higher. American Capital Agency operates as a real estate investment trust that invests in agency pass-through securities and collateralized mortgages. Assuming the new revised rate of growth for the U.S. GDP is 1%-2% instead of 2%-3%, there is little risk of short-term rates spiking higher and closing the spread in the bond market that makes owning AGNC so attractive. If AGNC can pay out 20% in the current market, then they should be able to maintain it if long-term yields don't fall much further. Try to pick up this stock at or under $28, and bring some whale-sized yield to your aggressive high-yield holdings.
Stock Pick #7 - Jazz Pharmaceuticals
Recommended by: Hilary Kramer, editor of
Strategy: Innovative picks that are redefining their sector of the market
Neurology and psychiatry have remained two relatively underserved markets in the health sector, and
is stepping into that void. The first innovative treatment Jazz has on the market is Xyrem, a narcolepsy treatment. In the last quarter, sales of Xyrem were very impressive. Revenues were $28.7 million, up 62% from $17.7 million in the first quarter of 2009. Its other drug is called Luvox and treats obsessive-compulsive disorder. Luvox's sales grew nearly as much as Xyrem's in the first quarter. Revenues were $5.5 million, a 54% increase from $3.6 million the year before.
In general, the company's first quarter was their "turnaround" quarter, which means Jazz crossed the threshold into profitability. Net income for the quarter was $1.5 million, or $0.04 per diluted share, compared to a net loss of $13.0 million, or $0.45 per diluted share, for the year-earlier quarter. This tells me this innovative company is really hitting its stride in 2010. A few more breakout drugs, and Jazz could really take off.