Top picks 2013: CVS, Yahoo
The drugstore operator is a safe bet, while speculators should consider Yahoo.
My top conservative pick for 2013 is drugstore operator CVS Caremark (CVS). The stock is reasonably priced relative to its growth potential and represents a solid play for capital gains, income, and especially dividend growth.
For more aggressive investors, my top pick for the coming year is Yahoo (YHOO). I look for these shares to continue their upside momentum in 2013 and would feel comfortable buying at current prices.
In many ways, CVS Caremark is in a nice sweet spot. The drugstore and pharmacy benefits manager is not dependent on overseas business and thus is shielded by problems in Europe.
Also, the company should benefit from more people being brought into the health care system as a result of Obamacare. Profit and revenue growth in 2013 should outpace that of most corporations. And I look for excellent dividend growth in 2013 and beyond.
CVS offers a direct-purchase plan whereby any investor may buy the first share and every share of stock directly from the company. Minimum initial investment is just $100.
Yahoo is certainly an aggressive pick. But there's a lot to like here:
- New management (a top executive from Google is now leading the charge)
- A cash-heavy balance sheet (the equivalent of around $8 per share)
- Operating momentum (the firm has beaten earnings estimates in the last 3 quarters)
- Solid stock price action
- A kicker in its equity stake in Alibaba
Learn more about this financial newsletter at Chuck Carlson's DRIP Investor.
More from TheStockAdvisors.com
They could do a lot better than that.Yahoo is kicking themselves for not being bought
out at $30 a couple of years ago.
CVS - oversold. Look at the earnings per share. It's so simple even a cave man can calculate it.
MORE ON MSN MONEY
Copyright © 2013 Microsoft. All rights reserved.
Quotes are real-time for NASDAQ, NYSE and AMEX. See delay times for other exchanges.
Fundamental company data and historical chart data provided by Thomson Reuters (click for restrictions). Real-time quotes provided by BATS Exchange. Real-time index quotes and delayed quotes supplied by Interactive Data Real-Time Services. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by SIX Financial Information.
Here's a list of ways to profit from the potential move from defensive to cyclical stocks.
VIDEO ON MSN MONEY
Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.
Contributors include professional investors and journalists affiliated with MSN Money.
Follow us on Twitter @topstocksmsn.