Last December, over 100 stocks were featured in our Top Picks for 2007 report. Now, at mid-year, we turn to the 20 advisors whose picks showed the strongest gains to get an update on their previous picks, as well as a new favorite stock for the second half of the year.
Neil Macneale, editor of 2 for 1 (a newsletter focused exclusively on stocks that have announced stock splits), chose two stocks in the Top Picks for 2007 report, and both picks qualified him for our Top 20 Advisors. His previous selections were Chaparrel Steel Co. (NASDAQ: CHAP) and Steel Dynamics Inc. (NASDAQ: STLD).
As of June 1, 2007, Steel Dynamics has risen 49%. while Chapparel had scored a gain of 67%. Here is Neil's original recommendation for these issues.
Updating his outlook on these steel stock, he now says, "This rate of return cannot continue forever, but there is every reason to believe these remain good stocks to own.
"Steel should continue to perform, given the strength of the economy, even without a strong housing market. As the housing market improves, steel should get even stronger. In both cases, fundamentals for these companies remain strong and the stocks still sell at a discount to their peers."
For his new favorite stock, the advisor says, "Here's an idea to consider for the second half of 2007. On balance, the world will be in better shape and commerce will more stable and more profitable. The war in Iraq is going to be winding down, either because the 'surge' is working, or because the Congress is fed up and pulls the plug.
"There are numerous signs that September is the unspoken deadline for Congress, even though this could not be written into the funding legislation just passed. In addition, our leaders are finally getting the message and are beginning to move on environmental issues.
"Cleaning up emissions and freeing ourselves from foreign energy supplies will bring enormous growth to the USA, both in jobs created and in technology we can export. The second half of 2007 will be seen as the just the beginning of the next wave of progress for the world's economies."
Cummins Inc. (NYSE: CMI), Macneale says, "will benefit from more stringent air quality standards. This manufacturer of diesel engines is at the forefront of clean diesel technology, with clean-burning new engines and retrofit kits for older engines.
"Cummins's stock price has jumped significantly since our initial recommendation in April, but it still has great stats and should be a long-term winner."
See all 20 stocks the advisors picked for the second half of 2007.
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