50 stocks to buy in December

November went out with a roar after six central banks joined forces to provide cheaper access to U.S. dollars in a robust response to the eurozone crisis that is threatening to capsize the world's economy.

While the immediate reaction was a 4.2% rally in the Dow Jones Industrial Average ($INDU), Wall Street was left wondering whether the pre-emptive response can contain the crisis, or if it is instead a sign that a eurozone meltdown has already begun.

The world will be watching to see what Europe will do, if anything, to address the fundamental issues behind the debt crisis. Action is still needed to support bank funding and to enforce discipline and fiscal rules, analysts say.
For investors seeking reliable clues about what's likely to work in this market, StockScouter's Benchmark Portfolio for December is an ideal place to launch investment research.

The 50-stock portfolio was created using StockScouter, MSN Money's stock-picking tool. Each month, StockScouter generates a list of 50 stocks whose business fundamentals, price behavior, valuation and stock-ownership characteristics appear to predict a rising price in the coming weeks, based on how those factors have influenced stock prices in the past.

Here are StockScouter's best investment ideas for December.

Investment research firm Gradient Analytics uses StockScouter to create daily and monthly stock lists. Writer Jon Markman, at the time a columnist for MSN Money, collaborated with the company to devise strategies for putting the tool to work.

One of Markman's strategies involved investing an equal amount of money in each of the stocks in the computer-generated portfolio, selling them a month later, then beginning the process again. For investors who prefer to handle fewer stocks, Markman recommended using the strategy with just the top 10 stocks on the list.

An investor who followed Markman's 10-stock strategy since it was launched in January 2001 would have realized a gain of 693% through Oct. 31 of this year, according to Gradient Analytics, and had an average annual return of 22.2%.

Over the same period, the Standard & Poor's 500 Index ($INX)was up 3.5%.

An innovative mix

StockScouter depends on advanced mathematics and software, and an innovative mix of measurements and historical testing to forecast the short- and long-term outlook for all U.S. companies that have traded on the major exchanges for at least the past six months.

The analytical tools score stocks on fundamental, valuation, technical and ownership components.

This score is combined with each company's StockScouter rating to come up with the list in the chart above. Only stocks with a final closing price above $3 are eligible for the list.