5 Home Run Stocks for 2012

by on July 9th, 2010
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We are all taught back in little league to make solid contact at the plate and try for singles. But if you are the swing-for-the-fences type, infield groundballs just won’t do.

Here is my list of 5 stocks that I think are poised to double over the next 12-18 months. All 5 are coming off brutal years and are in sectors that underperformed the market in 2011. But at this point, I believe the worst of the bleeding should be over and improving economic conditions should do wonders for these companies.

I think the best play for these potential home runs would be to buy a basket of these stocks in a non-retirement trading account to balance out the risk of potential winners and losers. Like all investments, make sure to do your homework before plopping your hard earned down. Now to the picks:

Alcoa (Ticker Symbol AA)

After shares hit the high teens in first half of 2011, this aluminum juggernaut closed the year on a big losing streak and finished the year under 9 dollars a share. A worldwide rebound in aluminum demand; coupled with a strong balance sheet and solid fundamentals, all point to a change in direction for Alcoa share prices.

Bank of America (Ticker Symbol BAC)

Aside from possibly Citigroup, no major financial institution has taken a hit as hard as Bank of America. Poor earnings and numerous PR gaffs in 2011 pushed shares of the Charlotte based bank deep into the red. However as housing prices begin to stable and the number of non-performing loans begins to decline; brighter days are in sight for Bank of America.

General Motors (Ticker Symbol GM)

Perhaps the most important and most hyped IPO of the last 5 years, shares of General Motors gradually have drifted lower and lower in 2011, before finishing the year at more than a 40% drop in value. Despite the performance, there is reason for optimism. Auto sales reached a 3 year high in 2011 as many Americans look to upgrade to newer models. In addition, several key GM brands continue to post impressive gains internationally, including in China, where Buick has become a status symbol of choice for many in the growing Chinese upper-middle class.

Hudson City Bancorp (Ticker Symbol HCBK)

Like Bank of America, shares of the New Jersey based Hudson City Bancorp faced significant headwinds in 2011. But what makes HCBK perhaps the most appealing of the 5 stocks on the list is that it pays you to wait. With a dividend yield hovering near 5%; Hudson City provides opportunities from both income and share price appreciation perspectives.

US Steel (Ticker Symbol X)

2011 was not kind to this century old steel giant. After being left for dead in 2003, shares of X exploded from the high single digits to over $180 per share in a mere 5 years before falling back to earth when the great recession hit. With a current share price in the mid 20s, many experts think a similar run up is possible as emerging economies hunger for steel products continues to grow.


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