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.

Ryland Group Inc. (NYSE: RYL) is the favorite conservative pick from John Stewart, editor of The Leverage Alert. He notes, "The company, which builds homes and finances mortgages, is seeing its stock start to display positive price action, although many experts are calling for a broader and deeper housing correction.

"Much of the doom and gloom toward the sector seems to have already been priced into these housing stocks as even negative news seems to be shrugged off. RYL's technical picture now looks quite strong as it is trading well above key moving averages, such as its 80-day. Meanwhile, shorter-term moving averages such as its 10-day trendline have provided support for the security during its recent run higher.

"Despite the stock's strength, ample skepticism exists from the Street. Ample pessimism is evident in our quantitative sentiment indicators as well. Options players are quite heavily skewed toward the bearish side of the spectrum.

"A number of traders are betting against the stock by shorting the shares as well. The total number of shares sold short amounts to nearly 20% of the stock's float. As the shares continue their advance, these short sellers may be forced to buy back their pessimistic positions. This could further exacerbate the magnitude of the homebuilder's upside potential as the bears unwind their short positions."

To see John's top speculative pick for 2007, click here.

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.

Homebuilder KB Home (NYSE: KBH) is the top conservative idea for 2007 from Ryan Detrick, editor of Players Performer. He explains, "The stock has been a very strong technical performer since the housing sector bottomed in July.

"At the time, the media was flooded with bearish claims that the housing bubble was about to burst and that the sector as a whole had nowhere to go but down. During the final few months of 2006, housing stocks have been able to advance amid this wealth of skepticism -- a very positive development that could lead to additional gains throughout 2007.

"This strength amid negative data indicates that there is a good deal of sideline cash that could begin to flow into the housing sector should the companies begin to display any signs of leveling out on the fundamental side.

"It's clear that the investing public is betting against KBH. From a contrarian perspective, this skepticism toward an outperforming equity is a bullish indicator. Looking at a quick rundown, we have bearish media sentiment, bearish analysts on Wall Street, and bearish quantified sentiment -- all of this despite positive price action.