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.

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.

Pacific Sunwear of California, Inc. (NASDAQ: PSUN) is the favorite speculation for 2007 from Richard Sparks, editor of Trend Maximizer. He notes, "The firm targets trendy young men and women with name-brand casual apparel (jeans, shorts, T-shirts, swimwear), shoes, and accessories through some 1,100 stores.

"Technically, the stock has performed well during the past few months. From its late-August base near $13, the stock has gained more than 50%, using its 40-day moving average as support, to now stand at a six-month high.

"Moreover, the stock leaped more than 7% in response to recent earnings news as some of the pessimistic sentiment unwound. The stock also benefited from the better-than-expected same-store sales numbers. I believe that the equity should continue to advance as more skeptical observers on the sidelines step in to buy.

"Meanwhile, the speculative options crowd is displaying pessimistic expectations and short interest rose slightly in November to a five-year high. Further, there is ample opportunity for a short-covering rally to push the stock higher.

"I view the pessimism on PSUN bullishly, given the stock's recent technical outperformance and improving fundamental picture. Evidence suggests that sideline money exists, which could step in and create buying power that could push the stock higher."

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