Sunday, January 2, 2011

Starting Lineup for 2011

At the start of the calendar year, there is a tradition of offering stock picks for the year. Our list totals nineteen names. There is no attempt to diversify across industry groups or to focus on market capitalization. The companies represent a narrow grouping of technology, retail, consumer and a smattering of industrial companies. Five of the companies are in the retail sector. They range in size (on the basis of market cap) from $271 million to $294,998 million.

The thread that binds all these companies is one of consistency. Each of these companies has been profitable in each of the past seven years; each has been free cash flow positive each year. They all have strong balance sheets and demonstrate the ability to grow sales, earnings from continuing operations, and free cash flow. Each company is expected to grow earnings going forward. 

We believe each of the listed companies will show strong results in 2011. That being said, it is not a static list. Circumstances change as does our opinion. Readers should do their own due diligence and make up their own minds about each name. 

Advance Auto Parts, Inc. (Advance) is a specialty retailer of automotive aftermarket parts, accessories, batteries and maintenance items primarily operating within the United States.
Apple Inc. (Apple) designs, manufactures and markets a range of personal computers, mobile communication and media devices, and portable digital music players, and sells a range of related software, services, peripherals, networking solutions, and third-party digital content and applications.
Balchem Corporation (Balchem) is engaged in the development, manufacture and marketing of specialty performance ingredients and products for the food, nutritional, feed, pharmaceutical and medical sterilization industries. It has three reportable segments: Specialty Products; Food, Pharma & Nutrition; and Animal Nutrition & Health.
Bed Bath & Beyond Inc., along with its subsidiaries, is a chain of retail stores, operating under the names Bed Bath & Beyond (BBB), Christmas Tree Shops (CTS), Harmon and Harmon Face Values (Harmon) and buybuy BABY
C.H. Robinson Worldwide, Inc. (C.H. Robinson) is a third party logistics company. It provides freight transportation services and logistics solutions to companies of all sizes, in a variety of industries.
Dollar Tree, Inc. (Dollar Tree) is an operator of discount variety stores offering merchandise at the fixed price of one dollar.
FactSet Research Systems Inc. (FactSet) is a provider of global financial and economic information, including fundamental financial data on tens of thousands of companies worldwide.
Family Dollar Stores, Inc. (Family Dollar) operates a chain of more than 6,800 general merchandise retail discount stores in 44 states, providing primarily consumers with a selection of priced merchandise in neighborhood stores.
Hansen Natural Corporation (Hansen) is a holding company. The Company, through its subsidiaries develops, markets, sells and distributes alternative beverage category natural sodas, fruit juices, juice blends, juice drinks, energy drinks and energy sports drinks, fruit juice smoothies and functional drinks, non-carbonated ready-to-drink iced teas, children’s multi-vitamin juice drinks,
Joy Global Inc. is a manufacturer and servicer of mining equipment for the extraction of coal and other minerals, and ores.
NetApp, Inc. (NetApp) is a provider of storage and data management solutions. The Company offers solutions for storing, managing, protecting and archiving business data.
Novo Nordisk A/S is a Denmark-based health care company. It also focuses within areas, such as haemostasis management, growth hormone therapy and hormone replacement therapy. The Company operates in two business segments: diabetes care and biopharmaceuticals.
NVE Corporation (NVE) develops and sells devices that use spintronics, a nanotechnology. The Company manufactures spintronic products, including sensors and couplers that are used to acquire and transmit data.
Oracle Corporation is an enterprise software company. The Company develops, manufactures, markets, distributes and services database and middleware software, applications software and hardware systems, consisting primarily of computer server and storage products.
PetSmart, Inc. (PetSmart) is a specialty provider of products, services and solutions for the lifetime needs of pets. The Company offers a line of products for all the life stages of pets, and offers various pet services, including professional grooming, training, boarding and day camp.
$399.55 Incorporated ( is an online travel company, which offers a range of travel services, including hotel rooms, car rentals, airline tickets, vacation packages, cruises and destination services.
Starbucks Corporation (Starbucks) is the roaster and retailer of specialty coffee in the world, operating in more than 50 countries. Starbucks purchases and roasts whole bean coffees and sells them, along with handcrafted coffee and tea beverages and a variety of fresh food items, through Company-operated retail stores.
USANA Health Sciences, Inc. (USANA) develops and manufactures high-quality, science-based nutritional and personal care products, with a commitment to continuous product innovation and sound scientific research.
Varian Medical Systems, Inc. is engaged in he design, manufacture, sale and service of equipment and software products for treating cancer with radiotherapy, stereotactic radiosurgery and brachytherapy.

Someone may argue that I missed the boat on this list and they may be right. The average 52 week gain for these stocks is 52%. Gains ranged from a low of 27% for BBBY to 83% for PCLN. These market beating gains are not the result of short-term fads. All of these companies are proven to be consistent winners. 

Disclosure: Author has long positions in AAP, BCPC, FDS and NVEC.
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