Chasing Value: 10 Stock Picks for 2010


To arrive at this years ten picks I scoured business journals and editorials, online and off. I also ran through a series of stock screens repeatedly over the last few months filtering for five primary value metrics identifying stocks worthy of further consideration.

The 5 data points were price-to-sales (P/S), price-to-book (P/B), price-to-cash flow (P/CF), dividend yield and return-on-equity (ROE). I did look at other things but these were the subject of my initial focus.

Many of my ideas leading to the final stocks selection were reviewed in a recent ten part Chasing Value series. Still other possibilities came up that I did not have a chance to review but did make it to the final list. In each and every case I excluded stocks that I would not invest in myself. Some I already own. Some were recent acquisitions or added to my personal watch-list.

This years picks are less exotic than years past with the exception of #10 -- the stock option. The theme this year is back to basics: energy, water, food, communications, household needs, and the immediate cash to buy them (note: the following links become active as the stories are posted over the end of year week).

In each of the posts I outline my thoughts on the stock pick, the specific relevant data and the closing price on December 28, 2009 which I will use as the starting point for tracking each quarterly review.

Using the closing prices from Monday December 28, 2009 I will also track the Standard & Poors 500 Index (1,127.78 close), the Dow Jones Industrial Average (10,547.08 close), and the NASDAQ (2,291.08 close), using them as the stalking horses.

Happy, Healthy, and Prosperous New Year!

Disclosure: Among the positions discussed in this post I own shares of BRK.B, GBE, EZPW, WMB, GE, RTN and ETFC options.

Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm. He writes the columns Chasing Value and Serious Money.

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