Top Stocks

By Jonas Elmerraji, Stockpickr

 

This year is almost behind us, and what a year it has been. While the broad market's double-digit run-up has been nothing to scoff at, it has paled in comparison with the massive rallies that have taken place across specific industries and other asset classes.

 

Defense contractors are up nearly twice as much as the broad market this year. Small caps have rallied even more than that, and precious-metals funds are up more than four times as much as the S&P 500 in 2010.

 

But focused investing in those plays is easy when you have the benefit of hindsight. Instead, today we'll look at investments to focus on for 2011. With a new year just a few trading days away, a handful of industries stand out as attractive investments for 2011.

 

Despite his penchant for Pink Floyd, Andy Louis-Charles is anything but laid back when he finds a good opportunity. Read on for screaming value in the education sector.

 

Rex Moore, Motley Fool Top Stocks editor

 

The market has been singing some Pink Floyd lately -- specifically, "We don't need no education!" It's music to my ears.

 

Everyone and his alma mater hates for-profit universities. An index of the sector is down 46% from its April highs, as investors seem to be bracing for sweeping reforms and draconian regulations, whether from Congress or the Department of Education.

 

Santa was very good for investors this year. A very impressive rally that began after Labor Day plowed forward again last week for a solid gain of .9%. That puts gains for 2010 solidly in double digits.

 

Not bad considering the amount of pessimism surrounding the markets for much of the year. I guess that’s why contrarians have done so well.

 

I’ll continue to play it safe with my ETF trades this week. My favorite pick is the contrarian play against the so-called January effect that can propel small stocks higher.

 

Job postings dropped to depressing levels a year ago as the economy foundered. But that has changed dramatically this month.

Major U.S. companies are advertising thousands of job openings, The Wall Street Journal reports. New data from the Indeed website shows that there were 4.7 million job postings online as of Dec. 1 -- up from 2.7 million a year ago.

The number of job postings isn't a very scientific view of the economic recovery. Many openings don't get posted online at all, and official payroll data haven't signaled a hiring rebound, the Journal reports. 

For some musical artists, 2010 was the year of the empty seat.

Musicians across the spectrum had a tough time selling tickets, as fans decided they had better things to do with their money. Seats that at one time could have sold for $100 or $200 had no takers, and artists like Christina Aguilera, the Eagles, John Mayer and Rihanna had to cancel shows or entire tours.

Not the greatest year for concert promoters like Live Nation (LYV), which merged with Ticketmaster in January and saw its stock price plummet 25% since April. So now the concert business is giving in and dropping ticket prices. 

By Jonathan Blum, TheStreet

 

Failure was a common theme this year, particularly among companies selling next-generation business systems and technology.

Tech heavyweights such as Google (GOOG), imaging companies such as Hewlett-Packard (HPQ) or Lexmark (LXK), and even Facebook's Mark Zuckerberg -- Time magazine's Person of the Year, no less -- all brought truly bad products and services for small businesses to market.

 

We are not taking cheap tech shots here, bashing gadgets that merely failed to dazzle. Oh, no. These are the elite mistakes of the year, strategic blunders that indicate significant company dysfunction.

 

Gold is a controversial topic, and it's certainly not for everyone. If you do want some exposure to it, however, Fool analyst Andrew Sullivan explains an easy way to get it.

 

Rex Moore, Motley Fool Top Stocks editor

 

In my last article, I told you that I'm shifting my Rising Star Portfolio cash hoard into gold to protect my purchasing power because I believe gold still offers a much better risk-reward ratio than cash. Cash loses purchasing power dramatically over time, and with a global currency war and sovereign debt crisis just beginning, this threat is heightened. Thus my reasons for moving into gold, and here's how I'm going to do it.

 

By Don Dion, TheStreet

 

Here are five exchange-traded funds to watch this week:

 

1. PowerShares Golden Dragon Halter USX China Portfolio (PGJ)

 

TheStreet and other financial media outlets have been buzzing recently about the SEC's probe into U.S.-listed Chinese companies. It's unclear how far the investigation will reach, but for now investors should use a sharp eye when venturing into some China-focused ETFs.

 

PGJ is more worrisome than other large-cap China ETFs, such as the iShares FTSE/Xinhua China 25 Index Fund (FXI). Whereas FXI tracks a basket of companies traded on China and Hong Kong exchanges, PGJ tracks a collection of U.S.-listed Chinese ADRs. These companies, which have a dual listing on U.S. stock exchanges, are more likely to fall under the SEC's scrutiny.

 

What does Apple (AAPL) have in mind for its new 500,000-square-foot data center that opens Jan. 6?

I think it's going to be for Mac applications. It could be huge, and like everything else with Apple, it might usher in a new era in computing.

 

Or maybe it is a place where Apple can offer applications in a cloud-like way. Maybe it will be a place for a developer to get virtual shelf space for new Mac applications. They don't have that today.

 

 

Tests are under way on a pill that may curb binge drinking while still allowing a person one or two cocktails.

The pill, called nalmefene, is made by H. Lundbeck A/S (HLUKY), a drugmaker that pulls in most of its revenue from the anti-anxiety drug Cipralex. Nalmefene blocks brain signals that make drinking and sex feel good, Bloomberg reports.

Some people are interested in this as a treatment for alcoholics, many of whom simply don't want to stop drinking. People can still drink with nalmefene, but they won't feel any pleasure from doing so. 

Does WikiLeaks have enough dirt on Bank of America (BAC) to force chief executive Brian Moynihan out of office?

Intrade, the market prediction site, has now opened up that possibility for betting. You can buy and sell "shares" in the chance that Moynihan will depart by June 11. The contract is here. So far, it doesn't look like anyone has made a trade on this.

The founder of WikiLeaks said last month he has enough insider dirt to take down one or two major banks. He didn't say which ones, but Wall Street gossip quickly focused on Bank of America -- and the bank's shares dropped 3% in one day. 

By Don Dion, TheStreet

 

A large part of Warren Buffett's success as an investor has hinged on his ability to pick out companies he considers to be sure things. To the famous investor, sure-thing investments are typically companies in boring industries, are easy to understand and hold promise for long-term growth.

 

Utilizing these criteria, the famous investor has been able to identify, purchase and profit from companies such as Coca-Cola (KO), Wells Fargo (WFC) and Burlington Northern Santa Fe Railroad. However, it has also caused the Oracle of Omaha to overlook other attractive regions of the market.

 

In the Berkshire Hathaway (BRK.A) portfolio, consumer goods, energy, industrials and the financial industry can all be pointed to as regions of the market Buffett understands and likes.

 

Here's a new indictment of this terrific market: "It looks tired. Exhausted." To which I say: What are we supposed to do? Tell it to take a nap? Give it some Lunesta? Have it lie down in a nice warm bed and give it 40 winks?

 

I mean, come on, give me a break. Tired? You call Jabil Circuits (JBL) tired after it shoots the lights out and then gains the most in the S&P 500 ($INX)? Doesn't seem all that tired to me. Does Carnival (CCL) need a good night's sleep? How about rosy-by-association Royal Caribbean (RCL)? Does that stock seem exhausted, sleep-deprived? To me, Carnival is on Red Bull, and Royal is on that energy drink in that little bottle that says beware of heart palpitation.

 

Or how about Netflix (NFLX) and Google (GOOG)? They need to spend some time in the sack?

 

By Jeff Reeves, Editor, InvestorPlace.com

An article from the Atlanta Journal-Constitution​ this week chronicled the rock-and-a-hard-plac​e challenge of restaurant companies right now. On one hand, weak consumer spending and high unemployment have prompted most casual-dining and fast-food chains to slash prices to keep customers at the table. On the other, inflating agricultural commodity prices mean produce, grains and beef are getting more expensive by the day.

That means the big question for 2011 is not whether restaurants will pass those prices on to consumers but when and how much. And the lowest-priced items on the menu are natural targets, since margins are already razor thin in most cases.