Each year Steven Halpern, editor of TheStockAdvisors.com, surveys the leading financial newsletter advisors asking for their favorite stocks for the coming year. This article is part of his 24th annual Top Stocks Report.

Union Bancal (NYSE: UB), the holding company for Union Bank California, is the favorite speculative play for 2007 from Doug Hughes, editor of the Banknewsletter.com. He notes, "Union was founded in 1864 and operates as a subsidiary of Bank of Tokyo-Mitsubishi UFJ, Ltd., which owns about 65% of the bank shares. This is among the largest banks we have ever covered, with over 315 branches and over $50 billion in assets. But with the stock trading at multi-year lows, we had to take a look.

"The bank continues to buy back stock; hopefully they will get very aggressive at this over the rest of the year. They certainly have the capital to do it. Look for them to buy 5 to 10% of the stock back this year and next. They have paid much higher prices for their stock in the past, so they will continue.

"Almost every analyst has downgraded this stock. We say buy now. They are in some of the best markets, loans are growing at 12%+, and nonperforming assets are very low at 0.09%. Most importantly, they are being very careful in California real estate not to get in trouble like in the past.

"This is a liquid name that trades plenty, and you get any size position you want now. Buy at $57.25 or less; at under $55.25, this is a steal. While it may take several years to pan out, this is simply an undervalued franchise at today's prices. They have a $30+ book value and 140 million shares outstanding; look for $75 a share 2 to 3 years out, with a cash dividend of 3.3% while we wait. This premier franchise cannot be replaced at today's prices. Downside should be limited to around $55 in a big sell off."

To see Doug's favorite conservative banking stock for 2007, click here.