(Adds news of Qualcomm's plan to expand product line.)BOSTON ( TheStreet) -- Europe may be on the brink of a recession, and economists say the U.S. may be dragged down by the Old Continent. Addison Capital's Michael Church says investors, as a result, may be too pessimistic. That's reflected in his stock picks. He is founder and chief executive of Addison Capital, which provides wealth-management services to wealthy individuals and institutions. The Yardley, Pa., firm has about $500 million in assets under management in equities and fixed income portfolios. Church said the rapidly evolving economic situation in Europe, and the threat of an economic collapse there "is obviously a risk to the economy since it will cause a slowdown to (U.S.-based) multinationals," but it's not driving his firm's decision-making nor prompted a wave of concerns from his clients. "One of the things that fascinates us is that although the markets are being driven by headlines and the conversation from Europe, if you tune that out and look around here at home, our markets have held up. And if you look at our economic data, it's been pretty decent." Driven by events in Europe, the S&P 500 is up a lackluster 1.9% this year in one of the most volatile performances in a decade. Still, many markets in Europe are down by more than 10%. But Church said there's a disconnect between the average individual's perceptions and the economic reality. "The hard data, retail sales or initial jobless claims, look comparatively good, while the soft data, which comes from (consumer) surveys, doesn't look so hot. "So you have to ask yourself: 'Which one is going to be wrong,' " Church said. "We think it's a situation of: 'Watch what they're doing and not what they're saying,' " when it comes to the perceptions of the general public toward the economy. For example, based on a survey, consumer confidence slumped to a two-year low in October, but that was soon followed by a big jump in retail sales to a new record over the Thanksgiving weekend. "That's not to say this is the greatest (economic) environment here, but it's not as bad as some people are saying," Church said. Goldman Sachs' has a similar view to that of Church in that U.S. stocks with a strong domestic presence have more upside potential than those that rely more on international sales for their revenue. "Policy and economic risks are highest in Europe and we advocate owning U.S. companies with domestic sales exposure," its research note said. Goldman's top picks include Apple ( AAPL), Oracle ( ORCL), EMC ( EMC) and Synchronoss Technologies ( SNCR). In light of that, here are Addison Capital's seven top stock picks for 2012:
Alere ( ALR) develops and markets consumer and professional point-of-care diagnostic devices. The firm's devices target cardiology, oncology, drug abuse and women's health-care sectors. Church says "we think this is where the future of health care is migrating to -- the use of a monitoring device from home. It's keeping people out of hospitals or the doctor's office" through the use of wireless communications on medical monitoring devices. Just as everything else is going mobile, this is mobile health care." Alere's shares have lost 37% this year, but have a three-year average annual return of 12%, resulting in a market value of $2 billion.
FMC Corp. ( FMC) makes a range of chemicals, including phosphates and soda ash, and they can be used as food additives, in agricultural pesticides and pharmaceuticals. Church says the company's manufacture of high-grade lithium is a growing part of its business. The chemical is used in batteries that can be used to power everything from a mobile phone or other communication device to electric cars, which provides "high potential for growth," Church says. FMC's shares are up 6% this year and over 10 years have an average annual return of 19.5%.
Statoil ASA ( STO) is a Norwegian oil company that sells as an American Depositary Receipt (ADR). Norway retains a 67% stake, and most of its oil and gas production is offshore. Operations also include oil refineries, natural gas pipelines and retail fuel outlets. Church says "it owns the largest gas pipeline going into the eurozone. And it pays a big dividend. They're looking great going into next year." Statoil has a market value of $82 billion and its projected dividend yield is 3.64%. Its shares are up 12% this year and over 10 years they have an average annual return of 18%.