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Varchild2008 (83.79)

2010 Dream Portfolio...Varchild's opinion



December 30, 2008 – Comments (2) | RELATED TICKERS: RHI , MSM , WFC

Given the unpredictable nature of a bear market expected in much of 2009....A new investor putting together a portfolio of stocks (and I would assume some Conservative/Bond mutual funds on the side to hedge them), should take a close examination of my DREAM PORTFOLIO for 2010.

That's right.  Think 2010...not 2009....and your stock picking skills go way up.  Why?  Cause it is about finding companys doing badly in their share prices but expected to do extremely well during an economic recovery expected in 2010.

Here's my DREAM PORTFOLIO for 2010 for all to consider:

1) SNHY:    Sun Hydraulics will benefit greatly from a global recovery in 2010 along with indirect benefits of an Obama Spending Spree.  It's international enough to avoid the high risk of higher taxation if Obama goes that route.

They sell their products not just to the commercial vehicle and boat industry, but also to to support Navy / Army vessels and vehicles.  Their customer base is huge...  Frankly, I would jump for joy every time any war happens like in Israel / Hamas....because anything can trigger a spike in demand for Hydraulic Valves and Cartridges.  Not a sexy sounding product but Sun Hydraulics is a Sexy Company with a great 1st half of the year Share Price Growth potential.

Enjoy the dividend payments!

2) CRNT:    My most recent Stock of the Day stock fell a few cents almost every day I recommended.  But, I stand by Ceragon Networks today as I did back in March 2008.

A) Expansion into India

B) Million Dollar Order in Africa

C) 30$ Million Share Buyback program which was long overdue and welcome since the 2007 share dillution.

D) With 4 solid earnings quarters under their belt they have a very healthy cash flow to cope with any slowdown.  Solid management has lead to earnings victories in 2008 and that means a much better 2009 and 2010 is in store than you think.

CERAGON today...but they will be here Tomorrow!

3) RHI)  Robert Half International already gained over 3$ on their share price when I outperformed in a while back under the consternation of a not to be named CAPS player.

Now Robert Half International has become a DREAM STOCK for 2010.  They carry an 11 cents a share dividend... But more importantly..

They will blossom in 2009 and 2010 as a force to assist so many sectors of the economy.  They provide consulting services as well as payroll hiring management services.  They help out the little guy whose looking to get a better paying job or is in fear of unemployment prospects.

RHI is the market leader in a market that is the new "BOOM" market.  Now.. It may not be what Dave and Tom Gardner thinks is the next BOOM market in their market report.

Some get it right when they outperform companies like PAYX  that does consulting services and maangement services with payroll / paychecks.  But man oh man did Standard and Poor's completely miss the boat on RHI.  RHI trades for $19+ and S&P marked it down in October with a Strong Sell rating to $10.  They cut their target price from $17 to $10!

BAH!  This one's got more upside.  And it's my favorite in the sector that I call the Business Services Sector.

4) MSM)  MSM Industrials Direct.  Regardless who gets infrastructure contracts from Obama-Spending-O'-Rama, MSM Industrials Direct will get a phone call everytime a tool or equipment parts, or supplies run out.  Need more staples for your staple....need more nails for your Nail gun?
Just need some 3M Post it Notes?  Whatever it is you need to build a bridge or a road or fix the Furnace at your local High School.... MSM Industrials Direct has it  (minus the Brick and Motar that (FAST) FASTENAL has to pay for).

Oh my God.. This has to be the Housing Market has bottomed hurray stock of 2010.
20 cents a share dividend is enormously generous and beats all other companys like FASTENAL in their sector.  Forget HD or Lowes...Forget Staples....Buy direct!  The GSA contract helps keep their cash flow / margins alive and well.

5) WFC)  Wells Fargo is a market leader that unfortunately the share price has already recovered almost 90% of what it lost in 2008.  But, should that scare you away from a market leader that wants to give you 34 cents a share quarterly for buying their shares?

It's getting TARP cash isn't the catalyst.  The catalyst are the 3 consecutive earnings beats in the toughest market conditions for banks in the history of America.

And to sit on the sidelines because it went up too much is naieve.  The yield still sits pretty above 4% and last time I checked a share price of a market leader with 4+% yield almost always means BUY.  Due to the run-up.. buy a little and wait this one down or enjoy the ride up. 


HOG)  at $15 most of the downside for 2009 is priced in.  Dividend isn't safe in my opinion so it did not make it.

HMC)  Positive news in China does not offset the fact that they got rid of their dividend and 2009 does not look good in America. 2010 is better but how much is unknown.

GME)  Ignore the "nintendo is direct selling their DS games so Gamestop stinks" garbage and focus on this fact.... By end of 2010:

A) A new Grand Theft Auto will be released.

B) Final Fantasy 13 releases

C) Starcraft II & Diablo III release

How can anyone look at that and say GME isn't a buy?

Why does GME not make my dream portfolio?  Too many stores from Funcoland buy-outs.
They need to dump some of their expenses and reduce their inventory.  Too many used games sitting collecting dust.

2 Comments – Post Your Own

#1) On December 30, 2008 at 11:00 AM, GNUBEE (< 20) wrote:

Second the MSM.

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#2) On December 30, 2008 at 12:12 PM, Varchild2008 (83.79) wrote:

I got 60 shares of MSM which was 40 shares not too long ago.  I basically take my paychecks and divvy them up into whatever is the most underperforming stock in my portfolio.

So.. When MSM was at $31.90... I bought...

MSM drops to $30.90 a few days later.. bought more.

MSM starts trading to $40?  That's too fast and I'll wait for a pullback on earnings report day...IMHO that's next week Mon. Jan 5th!

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