For 25 years, Steven Halpern, editor of TheStockAdvisors.com, has surveyed the leading financial newsletter advisors asking for their favorite stocks for the coming year. This article is one of 100+ ideas in the Best Stocks for 2008 report.

"My favorite picks for 2008 are two monoline bond insurers: MBIA Inc. (NYSE: MBI) and AMBAC (NYSE: ABK)," says Richard Lehmann, editor of The Forbes Lehmann Income Securities Investor.

"These two companies have been heavily shorted by speculators because of their exposure to subprime mortgage defaults. At current pricing, they are selling at half book value and only three times earnings.

"The reason for current concern is that they will lose their AAA credit enhancement ratings and therefore their ability to conduct new business, something I don't think is likely because there are various remedies to forestall such an event.

"For 2008, the demand for their services should grow substantially since the reliance by lenders on credit ratings alone has been seriously eroded. Also, their insurance of CMOs and CDOs only protect the most senior tier of a multi-tiered debt instrument, so their loss exposure is very marginal and years off.

Continue reading Best Stocks for 2008: Forbes expert banks on MBIA (MBI) and AMBAC (ABK)

Best Stocks for 2008: Forbes expert banks on MBIA (MBI) and AMBAC (ABK) originally appeared on BloggingStocks on Wed, 26 Dec 2007 14:15:00 EST. Please see our terms for use of feeds.