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 Picks Report.

AT&T, Inc. (NYSE: T) is the favorite conservative investment for 2007 from technical analyst Richard Sparks. The editor of Trend Maximizer observes, "The matronly telecom icon that was broken apart in 1984 -- and then merged with SBC Communications -- is making noise once again.

"AT&T has agreed to acquire southern Baby Bell BellSouth Corp. (NYSE: BLS) in a deal valued at $67 billion. The new T now boasts more than 49 million access lines in service. Cingular Wireless, the company's wireless joint venture with BLS, is the leading U.S. wireless carrier with more than 54 million subscribers in the fold.

"The firm reported better-than-expected third-quarter earnings of 63 cents per share on October 23. These results beat the consensus analyst estimate by five cents. Revenue rose 13.5% on a year-over-year basis to $21.36 billion, versus a consensus estimate of $21.33 billion. This news was met by at least one brokerage firm making positive comments and raising its price target for the stock.

"Additionally, with its current annual dividend of $1.33 per share per year, T stock yields approximately a 3.7% dividend. Meanwhile, the stock has been a stellar performer, outpacing the broad market and its peers in the North American telecom index. The stock has trekked steadily higher since October 2005 and is now trading at a 4 1/2-year high.

"Despite its strong performance, the equity is surrounded by pessimism. As contrarians, when we see significant pessimism on a fundamental and technical outperformer, we view it bullishly. We believe that this pessimism suggests the stock could move even higher."

To see Richard's top speculation for 2007, click here.