The 10 Best Stocks for 2012

Back in December,  launched a feature in called 10 Best Stocks for 2012,in which experts picked a buy-and-hold investment they thought would deliver market-beating returns over the next 12 months.
After three months, things are looking pretty good. Eight of the picks ended the first quarter in the black, six topped the Dow Jones’ 8% returns and half were able to trump the 12% gains enjoyed by the S&P’s 500 — the index’s best performance since 1998!
Still, while most of the list is coming up roses, one stock that enjoyed modest gains midway through the first quarter has slipped to last place with double-digit losses.
With that in mind, let’s take a look at how these 10 stocks have held up at the quarter-way point. Here’s a recap of  10 Best Stocks for 2012:

The 10 Best Stocks for 2012 - No. 10: Arcos Dorados

Return as of 3/30: -11.9%
Investor
: Josh Brown
Arcos Dorados (NYSE:ARCO) — as its Spanish-translated “Golden Arches” name would suggest — is the largest McDonald’s (NYSE:MCD) franchisee in the world and operates primarily in Latin America.
As Josh Brown wrote in his original ARCO stock recommendation, Arcos Dorados is a play on four key themes:
  1. Expanding consumer spending in Latin America
  2. The ferocity of McDonald’s as a global brand
  3. Growth within a defensive sector
  4. The comeback potential for emerging-market equities in 2012
Arcos Dorados has completely missed the bus on emerging-markets stocks, as seen by the iShares MSCI Emerging Markets Index ETF‘s (NYSE:EEM) 15% year-to-date gains. The company was hurt by a disappointing earnings report in late February. Arcos Dorados’s fourth-quarter earnings of 22 cents per share and full-year earnings of 54 cents per share fell shy of analyst expectations of 26 cents and 58 cents, respectively, though both were improvements year-over-year.
At the March 30 closing of $18.09, ARCO is trading about 15% below its 2011 IPO.

The 10 Best Stocks for 2012 -  No. 9: Hershey

Return as of 3/30: -0.7%
Investor
: Jon Markman
Hershey (NYSE:HSY) managed to climb out of the doghouse but still is slightly down on the year. However, Jon Markman remains confident about the company’s prospects for the rest of the year, especially considering Hershey’s stability.
Ironically, stability was far from the norm for HSY shares during the first quarter, with a great deal of volatility coming in late February and early March.
And Hershey’s perceived stability proved less boon and more blight, as investors actually shunned defensive stocks like utilities and other dividend-payers in search for growth during the quarter.
Still, fourth-quarter earnings were a bright spot, which Markman pointed out early last month:
“The firm went 4-for-4, increasing earnings and revenues, and lifting both the dividend and 2012 guidance. Plus, Hershey’s focus on expanding international sales paid off, as it reported 25% growth in its top targeted markets: Mexico, China, Brazil and India.”
Markman also points out that while Hershey might look like a steady Eddie, it has some growth to brag about: namely, average earnings growth of 26.4% over the past three years!
All in all, Hershey could look plenty attractive to investors should the charging bull market finally lose its legs.

The 10 Best Stocks for 2012 - No. 8: Banco Santander

Return as of 3/30: +2%
Investor:
Jim Jubak
After running the stock up to double-digit gains in the first couple months of 2012, European bank Banco Santander (NYSE:STD) finally slowed down and finished Q1 with just 2% gains.
While the Greek debt debacle reached at least some sort of resolution, and while European stocks have enjoyed a bit of a rally this year, Spanish stocks of late have taken a drubbing amid that country’s own fiscal difficulties.
Banco Santander in particular could have difficulties this year as the bank continues to shore up property assets and sets aside provisional money to meet regulators’ capital ratio requirements. Still, it has proven able to unload some of its bad assets, reporting recently that it had sold about 1.5 billion euros’ worth of bad loans to a number of American investment companies.
Banco Santander at least could see some interest as a bargain play, with its sub-$8 pricing around three-year lows. And while on a shaky precipice, it has a banner dividend yield of about 11%. But again, if trouble continues to shake Spain or the rest of Europe, STD could have more tough goings ahead.

The 10 Best Stocks for 2012 - No. 7: Turkcell

Return as of 3/30: +7%
Investor
: Charles Sizemore
Charles Sizemore, editor of the Sizemore Investment Letter, has watched his investment slip to No. 6 since the mid-quarter update, though his Best Stock for 2012 — Turkish telecom company Turkcell (NYSE:TKC) — still is up a respectable 7%.
Sizemore continues to tout Turkcell’s strong positioning to profit from the growth of emerging markets, as well as TKC’s reasonable valuation.
Turkcell had a mixed bag in its most recent earnings report:
“Revenues grew 4% in what was a very difficult year for Turkey and emerging markets in general, and Turkcell’s subscriber base grew by 1.1 million to 34.5 million. The company expects 2012 revenues to grow by more than double 2011’s rate, driven by the increased popularity of data and mobile Internet plans.
Earnings took a hit, however, falling 33% due to a currency crisis in Belarus, where Turkcell has significant assets.”
Another interesting piece of potential for Turkcell is a return to a dividend. The company is embroiled in a power struggle, and through the ordeal, never made its expected payout. However, a settling of this dispute likely would result in the dividend going back to normal — which could feed a renewed gush of investor interest.

The 10 Best Stocks for 2012 - No. 5: FedEx

Return as of 3/30: +10%
Investor
: Paul R. La Monica
Paul R. La Monica, who writes CNNMoney’s daily “The Buzz” column, isn’t letting go of the patient tack he took in picking shipping giant FedEx (NYSE:FDX).
The title of his latest article, “FedEx: Slow and Steady Will Win the Race” says it all. The company’s 10%-plus returns year-to-date have been better than La Monica expected — and that’s despite a quick decline following poor earnings guidance.
His reasons to select FedEx (NYSE:FDX) for our little contest: A low-risk investment with the ability to profit from organic growth if and when a recovery takes shape in 2012. And while things so far have looked good for the economy, La Monica is being a realist.
“… anyone holding onto the naïve hope that we are in for one of those V-shaped, hockey-stick or whatever other kind of shape recovery that involves GDP growing at — to quote Dark Helmet in Spaceballs — ‘ludicrous speed’ is deluding themselves.”
He still holds that the company is a bargain, and that the UPS‘s (NYSE:UPS) acquisition of European carrier TNT Express might actually be good for FedEx by helping boost the industry’s pricing power.

The 10 Best Stocks for 2012 - No. 5: Alcoa

Return as of 3/30: +15.8%
Investor:
Jeff Reeves
InvestorPlace Editor Jeff Reeves’ pick for the Best Stocks for 2012 contest is Alcoa (NYSE:AA), and it hasn’t disappointed during the first quarter, outpacing the S&P 500 with 18% returns year-to-date.
His original argument for Alcoa was a good valuation — the company already had flopped dramatically from pre-recession levels and streamlined its way back to profitability — and that because aluminum has a certain baseline demand built in, there was no room to go but up.
And up it went. Alcoa’s quarterly earnings report was a bit of a mixed bag, but revenues of $5.99 billion were up from the year-ago period and beat analyst expectations. However, since its breakneck gains in January, Alcoa stock has mostly listed while the markets continued climbing higher.
Fears of a Chinese economic slowdown have at least had some investors slow to fully embrace an Alcoa comeback. Still, Alcoa projects 7% growth in aluminum demand, thanks to cutbacks in production, which should help prices — and ultimately, AA stock.

The 10 Best Stocks for 2012 - No. 4: Caterpillar

Return as of 3/30+17.6%
Investor
: Dan Burrows
If you’re looking for a broad-based recovery play, it’s hard to get better than Caterpillar (NYSE:CAT). The world’s largest maker of construction and mining equipment has its fingers in a lot of pies, and will benefit nicely from any sustained economic growth.
Caterpillar’s earnings earlier in the quarter were favorable, with increased global demand bolstering profit up 60% on record sales. The 2011 increases in both sales and revenues were the largest percentage increase in any year since 1947.
The good news continued. In March, Caterpillar said its order backlog hit record levels during the quarter, which bodes well for future performance. It also affirmed its fiscal 2012 outlook for earnings of about $9.25 a share on revenue of $68 billion to $72 billion.
Burrows also sees promise in a note by Zacks Equity Research, which looks for continued expansion of Caterpillar’s mining acquisitions.

The 10 Best Stocks for 2012 - No. 3: Microsoft

Return as of 3/30: +24.3%
Investor
: James Altucher
Two times might the charm for James Altucher’s pick of Microsoft (NASDAQ:MSFT), which he picked for our 2011 contest, then felt just as confident in 52 weeks later.
If the first quarter is any indication, he’ll have plenty more to celebrate than 2011′s 7% losses for MFST. Microsoft, up 25%, was the third-best-performing Dow Jones stock this year, behind JPMorgan Chase (NYSE:JPM) and Bank of America (NYSE:BAC).
One of James’ original reasons for liking Microsoft — its valuation — is a bit plumper, thanks to the run-up. But the company’s stock buybacks remain in play, and MSFT still is sitting on a big pile of cash.
Meanwhile, Microsoft is seeing continued success with its Xbox 360 console and the expanding possibilities of its Kinect motion sensor. The company also has plenty of potential in the video conferencing and VoIP company Skype — and it’s now testing Skype Beta on smartphones using the Windows 7.5 operating system, also known as “Mango.”
Microsoft might have difficulties should it and the rest of the tech sector cool off after its red-hot first quarter, but the long-term attractiveness of its 2.5% dividend yield should help keep at least a few investors interested.

The 10 Best Stocks for 2012 - No. 2: Capital One

Current Return: +32%
Investor
: Philip van Doorn
In his initial article, “Capital One: Top Bank Stock Pick for 2012,” TheStreet.com contributor Philip van Doorn makes the case that financials in general aren’t as bad as you think — and certain smaller banks like Capital One (NYSE:COF) are, in fact, ready to soar.
As we all know, financials did in fact soar. Indeed, they represented the top-performing sector in Q1 2012, up more than 20% — partially helped along by the results of the Fed’s financial “stress tests,” which led a host of banks and other firms to boost their dividends. As mentioned before, JPMorgan and Bank of America led the Dow Jones with 38% and 72% gains. Capital One was no slouch, either, notching 32% gains in the quarter!
Also in past months, Capital One finished its acquisition of ING Groep‘s (NYSE:ING) ING Direct business in the U.S., and it also announced it would make a public offering of $1.25 billion in common stock to help fund its purchase of HSBC’s American credit card business.
The risks to financials remain the same — the sector is beginning to look somewhat overbought, and the crises in Europe and foreclosure issues at home are far from solved. But so far, COF has provided plenty of padding.

The 10 Best Stocks for 2012 - No. 1: MAKO Surgical

Current Return: +46%
Investor
: David Gardner
Little-known MAKO Surgical (NASDAQ:MAKO) continues to be the darling for our Best Stocks for 2012 buy list. The last time we checked in, in mid-February, MAKO had gained 46%. A few weeks later, and those returns have jumped to an astounding 67.2% — in just three months!
MAKO — a niche medical company banking on a narrow product line — is unlike most of the other stocks in the buy list, which are broad-based plays on an economic recovery. Still, Motley Fool co-founder David Gardner is looking the genius, with his belief in the company’s MAKOplasty procedure which resurfaces joints using custom implants and a surgical robot called the RIO.
Yes, a small-cap medical device company usually makes for a highly speculative play. But MAKO could have a game-changing product in its arsenal — and best of all, it’s playing into the growing group of baby boomers needing increased medical care as they age.
With the stock on pace to more than double, MAKO looks like the right place to be.

2 Best Stocks to Invest for This Week in 2012

Volatility continued in the markets this week, with economic reports decidedly mixed.
While retail sales went through the roof, the housing market stats showed a slowdown in housing starts but a pickup in building permits and mortgage applications. Unemployment claims remained steady, and so did the leading indicators.
Earnings season continues to surprise on the positive side, yet Europe’s problems also impact our markets almost daily.
We are on the right side of the trend, so investors should remain optimistic but always cautious in their selections. This week, most of the companies that look interesting to me are a dividend payer and a technology player.
Here are my two favorites:

2 Best Stocks to Invest for This Week in 2012 - Silicon Motion Technology (NASDAQ:SIMO)

SIMO makes multimedia data processing, storage and transfer products, including flash memory, embedded graphics processors, mobile television tuners and LTE modem solutions.
Price: $22.09
Market cap: $685.94 million
Target: $$30
Why I Like It: While chip prices are down, improving economic conditions should strengthen technology, including the semiconductor market, in terms of volume. However, caution remains during this earnings period of volatility. There could be a short-term pullback in the shares, but expect long-term appreciation.

2 Best Stocks to Invest for This Week in 2012 - Huntington Bancshares (NASDAQ:HBAN)

HBAN is a regional bank in the Midwest, headquartered in Ohio.
Price: $6.45
Market cap: $5.7 billion
Dividend yield: 2.5%
Target: $9.50
Why I Like It: A well-run financial institution, Huntington should benefit from the resurgence of the banking industry. While banks are not traditionally barn-burners in terms of appreciation, HBAN looks interesting and pays a decent dividend while you await appreciation.

Top 6 Stocks to Buy for May in 2012

Although we are in a long-term secular bull market, it is approaching important resistance at the March highs. This level also coincides with a significant resistance zone that eventually resulted in the market highs in 2007.
Stocks have advanced for several weeks, and the S&P 500 has gained almost 12% this year. Most of the big-name stocks have reported Q1 earnings, and 65% of the S&P 500 stocks have exceeded earnings estimates — a creditable but not spectacular performance in that many of the earnings estimates had been lowered.
The euro-contagion mess is still with us, along with concerns over China’s economic outlook. But these concerns are of a short to intermediate time frame. Thus, good quality stocks should be bought on pullbacks, and stocks that have just begun what appear to be major moves should be bought in stages starting now.
Here are your top stocks to buy for May:

Top 6 Stocks to Buy for May in 2012 #1 – AT&T (T)

AT&T (NYSE:T), one of the most recognized brand names in the world, is expected to see gains in consumer wireless and broadband services. Its strong balance sheet, long-term customer relationships, and expanding profit margins should result in an increase in the stock’s P/E multiple, along with an increase in earnings. Analysts estimate that AT&T will earn $2.41 in 2012. The stock has a dividend yield of over 5%.
Technically the stock reversed from its 50-day moving average early in April, flashed a buy signal from our internal Collins-Bollinger Reversal (CBR) indicator, and then broke through a quadruple-top at $32. The target for AT&T is $38.

Top 6 Stocks to Buy for May in 2012  #2 –EssexProperty Trust (ESS)

Essex Property Trust (NYSE:ESS) is a Real Estate Investment Trust (REIT) that owns and operates multi-family properties in California and the Pacific Northwest. Forecasts are for an average occupancy level of 96% in 2012, and rents this year are expected to rise by 6%. This REIT is a proven performer in redeveloping older properties, which supply a predictable stream of income.
ESS has a dividend yield of almost 3% and is expected to raise its dividend by 3%-5% this year.
Technically the breakout at $148 is very significant in that it breaks from a resistance line that extends back to February 2007. The target for ESS is $175.

Top 6 Stocks to Buy for May in 2012 #3 – Kohl’s Corp. (KSS)

Kohl’s Corp. (NYSE:KSS) owns a chain of family-operated department stores that also provide online shopping. And it owns the Rock & Republic brand, which offers apparel and accessories.
The company’s earnings have steadily grown over the past five years. Earnings predictions are $4.30 in 2012 versus $3.65 in 2011, and $4.85 in 2013. Kohl’s has a dividend yield of 2.5%.
In addition to the long-term goals for the stock, it also appears to be a candidate for a quick trade — note the strong buy from the stochastic. The trading target is $56 and the longer-term target is $68.

Top 6 Stocks to Buy for May in 2012 #4 – Pioneer Natural Resources (PXD)

Pioneer Natural Resources (NYSE:PXD) is an independent oil and gas exploration and production company with operations mostly in the United States and South Africa. However, the South African holdings are expected to be sold this year.
Earnings for the company are on a tear due to its unique position in thePermianBasinand its focus on oil production and cost cutting. S&P says that a higher liquid mix could boost earnings to $6.15 in 2012 and $8.85 in 2013, up from $3.95 in 2011.
The breakout from the triangle late in 2011 was a long-term bullish signal, but the follow-through after holding at its bullish support line is more significant. By breaking over $115, the target of $150 appears attainable within six months. Buy PDX now.

Top 6 Stocks to Buy for May in 2012 #5 – PulteGroup (PHM)

PulteGroup (NYSE:PHM) is a U.S. homebuilder with a financial services division that consists principally of mortgage banking and title operations. It appears that first-time buyers are becoming more active, and U.S. households are increasing at a greater rate than homebuilding, so we may have seen a bottom in the building industry.
Pulte is cash rich, with over $1.1 billion in cash that can be used to build or acquire communities. The company has increased its earnings (though still at a loss) for the past four years and is likely to turn profitable this year.
Technically a golden cross followed by a break through the long-term resistance line at $8 are powerful signals. And the April 27 break to $10 on twice the normal volume is a signal that PHM has the potential to run to the high teens.

Top 6 Stocks to Buy for May in 2012 #6 – Velti (VELT)

Velti (NASDAQ:VELT) is a leading global provider of mobile marketing and advertising that enables companies to implement campaigns by communicating through their mobile devices. Recent acquisitions and the creation of the Open Device Identification Number (ODIN) Working Group have brought Velti to the forefront of mobile advertising.
The company’s Q4 2011 earnings were 59 cents, which beat analysts’ estimates of 48cents. Analysts expect 73 cents in FY 2012.
The stock broke from a consolidation rectangle in January and established a trendline with support on its 50-day moving average. A golden cross was flashed in April, as well as a buy from the stochastic. The trading target for VELT is $18.

Top 5 Apparel Stocks to invest in 2012

Clothing, shoes and fashion accessories are hardly “necessities.” However, it’s indisputable that a certain segment of American consumers still has plenty of discretionary income and is looking to big brands more than ever before for comfort and, of course, a symbol of status.
I watch more than 5,000 publicly traded companies with my Portfolio Grader tool, ranking companies by a number of fundamental and quantitative measures. And this week, I’ve uncovered five clothing stocks to buy.
Each one of these stocks gets an “A” or “B” according to my research, meaning it is a “strong buy” or “buy.”
Top 5 Apparel Stocks to invest in 2012 - Coach (NYSE:COH) develops fine accessories including handbags for women. In the last 12 months, Coach stock is up 25%, compared to smaller gains by the broader markets. COH stock gets a “B” grade for sales growth, a “B” grade for earnings growth, a “B” grade for earnings momentum, a “B” grade for the magnitude in which earnings projections have increased over the past months and an “A” grade for return on equity. For more information, view my complete analysis of COH stock.
Top 5 Apparel Stocks to invest in 2012 - Nike (NYSE:NKE) is one of the most famous athletic apparel developers in the world. In the last year, Nike stock is up 33%, compared to a gain of just 4% for the Dow Jones in the same time. NKE stock gets a “B” grade for sales growth and an “A” grade for return on equity. For more information, view my complete analysis of NKE stock.
Top 5 Apparel Stocks to invest in 2012 - Lululemon (NASDAQ:LULU) designs and sells technical athletic apparel and has experienced stock growth of 50% since January 1. Lululemon stock gets an “A” grade for sales growth, a “B” grade for operating margin growth, a “B” grade for earnings growth, a “B” grade for the magnitude in which earnings projections have increased over the past months and an “A” grade for return on equity. For more information, view my complete analysis of LULU stock.
Top 5 Apparel Stocks to invest in 2012 - Ralph Lauren (NYSE:RL) sells men’s, women’s and children’s apparel, accessories, fragrances and home furnishings. Ralph Lauren stock has climbed 24% since this time last April. RL stock gets a “B” grade for sales growth, a “B” grade for earnings momentum, a “B” grade for the magnitude in which earnings projections have increased over the past months and an “A” grade for return on equity. For more information, view my complete analysis of RL stock.
Top 5 Apparel Stocks to invest in 2012 - VF  (NYSE:VFC) is a global apparel company based in the United States. VFC stock has gained 42% in the past 12 months. VFC stock gets an “A” grade for sales growth, a “B” grade for operating margin growth, an “A” grade for earnings growth, an “A” grade for earnings momentum and an “A” grade for return on equity. For more information, view my complete analysis of VFC stock.