Top Stocks For 2011, Top Stocks For 2011, Best Stock Investments For 2011, Hot Stocks For 2011

 

"Aflac (NYSE: AFL) is best known in the U.S. for its 'duck ads,' but actually earns over 75% of its money from Japan," says Dirk Van Dijk.

 

 In selecting the stock as his top pick for 2011, the strategist for Zacks.com, recalls "Aflac happens to be an old favorite of mine, a stock that I first recommended back in 1991." Here's his current update.

 

"In the U.S., its policies are sold through employers on a payroll deduction, as part of companies 'cafeteria plans'. They are pretty straight forward. If you get sick and can't work, or are in the hospital, it pays out a set mount directly to the insured.

 

"It is thus not at risk for rising health care costs (but is if more people get sick). The U.S. unit was under some pressure as payrolls shrank, but with some positive news on the employment front, that should turn around. 

 

"In Japan, once people get AFL insurance they don’t drop it (which is very important in the life and health insurance industry) with a persistency rate of 95%.

 

"The firm has a superb track record, but came under big pressure during the crash last year due to fears about its investment portfolio. I think those fears are being assuaged over time. 

 

"It has already realized $1.7 billion (pre-tax) in investment losses.  Some of those are not going to come back, like its holdings in Lehman Brothers and WAMU, but other parts of the holdings that were written down just might come back. 

 

"Aflac did however write down $380 million as other than temporary losses in holdings of some Ford debt, and Ford has been doing much better of late, certainly much better that it looked back at the end of the first quarter when GM and Chrysler were going down for the count.

 

"The company has generated an ROE of 33.4% over the last 12 months, and its five year average ROE is 20.84% (it has leveraged up a bit, from having no debt to a still very manageable and conservative 22% debt to capital. As that happens AFL should return to its historic valuations. 

 

"How much upside potential is that? A Lot. Over the last five years (which of course included the big sell o? last year) AFL’s P/E has averaged 15.4x. 

 

"Based on 2010  earnings estimates it is going for 9.5x now, and 8.7X 2011 consensus estimates, and those estimates have been rising. 

 

"AFL also has a habit of beating the estimates. It has done so the last three times out, and in 17 of the last 28 quarters, with only five disappointments. 

 

"AFL currently yields 2.4%, which is nice. It has however, increased that dividend in each of the last 27 years, and over the last 15 years it has done so at a compound annual rate of 20.7%. 

 

"AFL happens to be an old favorite of mine, a stock that I first recommended back in 1991, and was a core holding for most of my tenure at C.H. Dean. I know the management team well from those days, and they are amongst the best I know in the industry."

 

 

"Looking for a way to bet on a continued rebound in technology stocks, a rise in worldwide demand for energy, and China…all in one?" asks small cap growth stock expert Jim Oberweis, Jr.

 

The money manager and editor of The Oberweis Report suggests, "Take a look at American Superconductor Corp. (NASDAQ: AMSC), my choice for the top idea for 2011.

 

"The bulk of their business today comes from the wind power industry, as AMSC designs wind turbines and sells turbine electrical systems that can be customized for each customer.

 

"AMSC is the leading provider of electrical components to the leading Chinese wind turbine manufacturers, with Sinovel being their largest customer and representing roughly 75% of their revenues.

 

"Sinovel is the leading player in the Chinese market and continues to successfully take market share from competing players.  While Sinovel’s growth is AMSC’s gain and their relationship has only strengthened as of late, sales concentration remains a risk.

 

"AMSC continues to mitigate this exposure through deals with several new international wind power customers.  Hyundai represents another important customer and has already announced orders both in the US and Korea.

 

"Customer Doosan in Korea has ambitions of becoming a top ten manufacturer as well.  AMSC has several other attractive growth opportunities that should help to diversify their business.

 

"Within the power grid market, the company sells power systems to utilities to help them control power output from renewable sources. With expected growth in electricity usage over the next few decades utilities are planning now to prevent costly power outages.

 

"AMSC products increase the reliability and capacity of the grid, directly addressing the growing problem of grid voltage instability. The company’s superconductor business represents another exciting growth opportunity.

 

"As renewable power stations continue to grow, so does the problem of collecting the energy they produce and e?ciently transporting it to the place it is used. "These stations are often erected in rural areas while the demand for their produced power is a good distance away, in more densely populated areas. "The copper wire that is currently used su?ers from an inability to span long distances e?ciently, thus causing power line losses among other costly issues. "AMSC is the leading manufacturer of proprietary high temperature superconductor (HTS) wire, which can carry roughly 150 times the electrical capacity of standard copper wire and will better handle the growing demand for energy usage worldwide.

 

"The company must win contracts here in order to achieve profitability within this business, but we expect rapid growth both here and abroad.

 

"The proof is in the pudding, of course. Amidst a weak economic backdrop, the company grew revenues by 85% in their latest reported quarter as they announced their third consecutive quarter of profitability.

 

"The future looks bright as well. After booking approximately $165 million of orders in their latest reported quarter, AMSC enjoys a backlog of orders valued at roughly $587 million.

 

"The stock should reward investors in 2011 as AMSC reports continued growth in the final two quarters of their current fiscal year (which ends in March), followed by a near doubling of earnings in the following year."

 

 

"Equinix (NASDAQ: EQIX), the global data center operator, is one of the most tempting growth stock opportunities on the 2011 horizon," says Stephen Quickel.

 

The editor of US Investment Report explains, "Big banks, market data providers, telecoms and other technology-driven clients use the firm's data center platforms to reduce their own capital expenditures and operating costs.

 

"The Silicon Valley-based company, barely ten years from startup, has moved quickly to open 45 data full-service centers serving clients in 18 key regions of the U.S., Europe and Asia-Pacific areas.

 

"These centers provide data management services to global enterprises of all sorts, including content and financial companies and network service providers,. "With demand rising rapidly, Equinix, has been able to lift revenues from $118 million in 2003 to $705 million in 2008, and to an estimated $880 million in recessionary 2010. Analysts project $1.17 billion in 2011—a two-year rise of 67%.

 

"As for earnings, the rapidly expanding company showed deficits for its first eight years, but reduced them in all but one year. Now firmly in the black and established as a sector leader, its gains could be large over the next few years.

 

"Rapid expansion of its IBX centers (short for International Business Exchanges) has required considerable debt. The latest available debt/equity ratio is an elevated 1.27.

 

"But capital spending is leveling o?, and Smith and his managers have kept of tight rein on operating costs.

 

"Earnings have risen 26 quarters in a row. After tax margins are reportedly at a four-year high. Third quarter 2010 earnings jumped 213% year-over-year, beating analyst estimates by 57%.

 

"Zacks reports consensus five-year earnings growth projection of 18.4% a year going forward. First Call shows earnings up 26% in 2011 and more than 40% in 2011.

 

"Those eye-catching numbers have not gone unnoticed. EQIX is not cheap by conventional measures. At 105 in late December (up from 40 in March), it traded at 51 times FC’s 2011 earnings projection and 34 times its 2011 estimate.

 

"But the stock has impressive support. Among 26 brokers—a large following for a young $4-billion market cap stock—15 rated it a Strong Buy in December, 3 a Buy and 8 a Hold, with no Sells.

 

"Goldman Sachs, altogether, owns 12.5% of the outstanding shares, with Wellington Management and Shumway Capital Partners each holding 8%-plus. Wells Fargo, Barclays, Morgan Stanley and Vanguard also have large positions.

 

"Of course, the Big Boys bought in at lower levels and have added shares along the way—and will doubtless continue to do so.

 

"With its high debt and P/E, it’s not the kind of play-it-safe stock that attracted investors in late 2010. But as we head into 2011, few mid-caps have emerged with more fascinating near- and long-term growth possibilities."

 

 

"General Mills (NYSE: GIS) looks especially tasty for total returns in 2011," says Chuck Carlson, a leading expert on dividend reinvestment plans -- a low cost strategy for loong-term investors to accumulate  shares of a particular stock directly from the company.                   

 

On his The DRIP Investor, he explains, "There is a transition taking place in the stock market toward high-quality, dividend-paying stocks. General Mills plays into this trend very nicely.

 

"Profits for the leading food company should show nice gains in 2011, which should provide support to the stock price. Also, the stock o?ers certain defensive characteristics should the market become more tumultuous.

 

"Its stable of strong brand names, focus on costs, and overseas growth opportunities should drive profits higher in the near and long term. I like the stock for all seasons.

 

"General Mills owns some of the strongest brands on your grocer’s shelves, including Green Giant vegetables, Old El Paso Mexican food, Haagen-Dazs ice cream, Yoplait yogurt, and Cheerios and Wheaties cereals.

 

"Finally, General Mills has pricing power that could be very useful should inflationary fears increase among investors. The stock's yield of 2.7% is an added bonus. I look for the stock to outperform the overall market in 2011.

 

"I think the stock will continue to put up decent gains should the market rally continue. And I would expect the 'defensive' qualities of the stock to fuel above- average price resiliency should the overall market turn down.

 

"Investors should note that General Mills o?ers a direct-purchase plan whereby any investor may buy the first share and every share directly from the company. The minimum initial investment is $250. For information on the direct-purchase plan call (800) 670-4763."

 

 

 

"Whenever inflation heats up, there's no better place to park your cash than in tangible commodities," says Nathan Slaughter.

 

his The ETF Authority, he noes "Our favorite play on this sector is Market Vectors Hard Asset Producers (NYSE: HAP), an ETF whose 300-stock portfolio provides one-stop shopping for six distinct commodity sub- sectors.

 

"History has shown conclusively that there is one asset class that thrives above all others under these hostile conditions: commodities. A depreciating dollar is a sure-fire recipe for rising commodity prices. And when inflation is on the rampage, investors always like the reassurance of owning hard assets.

 

" Instead of watching prices for things like steel and gasoline rise all around you, why not convert your dollars into these commodities directly and enjoy the ride?

 

"Even if the Fed does manage to keep inflation in check, we believe that good old supply-and-demand fundamentals favor rising prices anyway.

 

"With the global economy getting back on track and emerging powers like China swallowing mountains of raw materials, the short-circuited commodities rally will have juice once again.

 

"Investors have a dizzying array of options here, but our favorite is Market Vectors Hard Assets. The fund is invested in six commodity sub-sectors.with top billing going to the energy sector, where integrated oil & gas giants, o?shore drillers and equipment/service providers soak up about 40% of the fund's assets.

 

"Elsewhere, shareholders will have a large stake in agricultural firms, ample exposure to gold and silver producers, along with aluminum, nickel, iron ore and other critical industrial metals. Rounding out the portfolio are holdings linked to coal, steel, uranium and even forest products.

 

"Whether it's to protect purchasing power against the ominous threat of currency debasement or a simple bet on stronger economic expansion, both point to a continued run-up in commodity prices -- and the shares of producers that bring us these goods."

 

 

For his top pick for 2011, Dennis Slothower turns to the "big screen" and highlights a company that could benefit from the recently release film, Avatar.

 

The editor of Stealth Stocks says, "IMAX Corporation (NASDAQ: IMAX) is one of the world’s leading entertainment technology companies, specializing in motion picture technologies and large-format film presentations." Here's the reasoning behind his buy recommendation.

 

"The company’s principal business consists of large-format digital and film-based theater systems. The sale or lease of such systems to, or contribution of such systems under, revenue-sharing arrangements with its customers and the conversion of two-dimensional (2-D) and three-dimensional (3-D) Hollywood feature films for exhibition on such systems around the world. 

 

"IMAX’s theater systems are based on proprietary and patented technology. Its customers that purchase, lease or otherwise acquire their theater systems are theater exhibitors that operate commercial theaters, museums, science centers or destination entertainment sites.

 

"The company generally does not own IMAX theaters but instead licenses the use of its trademarks along with the sale, lease or contribution of its equipment.

 

"In 2002, IMAX introduced a technology that can digitally convert live-action 35mm films to its large format at a modest incremental cost while meeting the company's high standards of image and sound quality. 

 

"In 2003, the company introduced IMAX MPX, a theater system designed specifically for use by commercial multiplex operators.

 

"The IMAX MPX system, which is highly automated, was designed to reduce the capital and operating costs required to run an IMAX theater, all without sacrificing image and sound quality.

 

"Avatar, a movie made in 3-D, was just released this Christrmas. Critics are saying that it could be the nextThe Lord of the Rings, only it uses a new kind of 3-D technology that is expected to revolutionize the movie industry, much as did sound and color did in the last century.

 

"High expectations are pushing theater chains around the world to invest in this new digital 3-D system. IfAvatar is, in fact, a big hit, we’re sure to see many more 3-D action films and many more 3-D theaters, which should increase IMAX’s earnings sustainably.

 

"According to my numbers, IMAX should be selling in the low teens over the next three to five years. It is currently trading around $10, so IMAX has large upside potential. Place a sell stop at 25% below your entry price. As the stock rises, continue to raise your stop so that you are trailing the Friday close by 25%."

 

 

 "Gold will be the primary beneficiary of the massive bailout and stimulus plans enacted by not only the United States, but every industrialized nation across the globe," forecasts Brien Lundin.

 

The mining stock specialist and editor of The Gold Newsletter looks to a small gold exploration and development company as his top pick for 2011:  Keegan Resources (ASE: KGN).

 

"Because of the deflationary influences of higher productivity, moribund economic growth and cheap labor in developing nations, we won’t see the kind of price inflation that characterized the 1970s. 

 

"But we will see galloping monetary inflation — or much more currency in circulation — and the result will be higher prices for assets such as commodities and equities.

 

"So if gold is going to lead the pack, what’s the best gold investment? In my opinion, smaller gold exploration and development companies will o?er valuable leverage to gold, and one of the best is Keegan Resources.

 

"Keegan controls the Esaase gold project, a major mine-in-the-making located in the investor-friendly nation of Ghana, in west Africa. 

 

"The company has made quick work of the project, going from field exploration to drilling to resource definition and pre-feasibility studies in a span of just three years. 

 

"Now, Keegan finds itself sitting on top of a near-surface, open-pittable deposit that contains 3.47 million ounces of gold according to the most recent resource estimate.

 

"As impressive as that total is, it has the potential to grow significantly larger. The outlined resource remains open both along trend and at depth, and it lies within a country that hosts some of the world’s largest gold deposits.

 

"Whether Keegan can unearth a resource of similar size at Esaase remains to be seen, but most analysts feel the next resource estimate will show the total gold holdings to have increased to at least five million ounces. 

 

"And with the company tying up new ground along trend, there’s literally no telling how large this find could grow.

 

"Frankly, I don’t expect Keegan to develop Esaase into a mine — that job will likely devolve to the major mining company that buys Esaase, or Keegan itself. 

 

"The company’s management team knows this as well, and they are guaranteeing the best price by advancing steadily toward production.

 

"Keegan was among the highest of the high flyers during gold’s fall rally. Although the share price has therefore come back fairly hard during the subsequent correction, the closing of a recent financing essentially opened a door to potential take-out o?ers for the company. 

 

"While I know of no indications that any o?ers are forthcoming, there is the possibility that a bid, or a bidding war, could emerge at any time. In light of this, and considering the dip in its share price, Keegan is one of my top gold stock recommendations."

 

 

For her top pick for 2011, income specialist Amy Calistri looks to Kinder Morgan Energy Partners L.P. (NYSE: KMP).

 

The editor of The Daily Paycheck explains, "I always look for the gift that keeps on giving; that's how I view this master limited partnership, which produces a steady stream of income each and every quarter.

 

"Kinder Morgan Energy Partners is one of the largest owners and operators of energy- product pipelines and storage facilities in the United States. 

 

"Formed in 1992, KMP is structured as a publicly-traded master limited partnership (MLP). MLPs are an important asset class for income investors because they are legally required to distribute most of their taxable income and cash flow to shareholders (known as 'unitholders'). 

 

"KMP's extensive pipeline systems carry products such as gasoline and heating oil from the Gulf Coast to the East and West Coasts.

 

"KMP also owns and operates a network of carbon-dioxide (CO2) pipelines, which are used in a process known as enhanced oil recovery. These pipes carry CO2 to old oil fields where it is injected into the fields to increase productivity. These enhanced recovery techniques become more popular as oil prices rise.

 

"And KMP is continuing to grow its pipeline revenues through expansion. This past November , the Rockies Express Pipeline became fully operational.

 

"KMP owns a 50% stake in the 1,679-mile project, which carries natural gas from the Rocky Mountains to the Pennsylvania/Ohio border.

 

"Although KMP is an energy-related company, its revenues are relatively insensitive to energy prices. The partnership earns fees based on the amount -- not the price -- of gas, oil or refined products it processes and transports.

 

"Many of its interstate pipelines charge rates that are regulated by the Federal Energy Regulatory Commission. These regulated rates are set to allow Kinder Morgan a steady, reliable return on invested capital.

 

"Further, the partnership has already locked in guaranteed capacity from a few shippers on its pipes. KMP appears to be on track to not only deliver, but also continue to grow, its distributions.

 

"And when it comes to distributions, KMP has a stellar track record, having made quarterly payments like clockwork since October 1992.

 

"KMP also has a very consistent record of dividend growth, boosting distributions nearly every year since its inception. The partnership has increased its distributions at an annualized rate of +7.5% in the last five years alone.

 

"KMP currently pays a quarterly dividend of $1.05 per unit, equivalent to $4.20 per year for a yield of approximately 7% at current prices. It should be noted that MLPs are best held in taxable accounts as most of their distributions are classified as 'return of capital'."

 

 

 

Mark Leibovit uses a proprietary technical trading system known as volume reversal analyst; over time his buy and sell signals for the market has led to one of the top rankings among market timers -- including being ranked timer of the year in 2006 by Timer Digest.

 

He also uses this system to highlight trades among individual stocks -- such as his top pick for 2011: Legend International Holdings (Other OTC: LGDI). Here's the latest from his VRTrader.

 

"Legend International Holdings, Inc. engages in the exploration and development of mineral properties. It principally focuses on the development of its phosphate deposits located in the Mt. Isa district, along the margin of the Georgina Basin of Queensland, Australia. 

 

"The company also owns interests in diamond and base metal projects located in Northern Territory. Its exploration licenses cover 40,525 acres in Queensland and 4.7 million acres in the Northern Territory, Australia. 

 

"Legend International Holdings has a strategic alliance agreement with Wengfu Group Co. Ltd. The company was formerly known as Sundew International, Inc. and changed its name to Legend International Holdings, Inc. in March 2003. Legend International Holdings was founded in 2001 and is based in Melbourne, Australia.  "Our technical target for the shares is a move to $2.25-$2.50."

 

 

"Our bias has again shifted temporarily to the bearish side, which makes me cautious about picking stocks in early 2011," says Gene Inger. With that caveat in mind, the editor of The Inger Letter looks to the Level 3 Communications(NASDAQ: LVLT), s speculative, low-priced issue.

 

 "We owned this stock years ago and when Level 3 bought Broadwing we got stock and cash; thus solid profits years ago or zero-cost basis on Level 3 shares.  "After pundits hyped it (at triple current prices)  the stock has dropped to an area of attractiveness. One caution: from sub-$1 levels during our forecast market panic a year ago, the shares have doubled; thus it's not impossible that 'capital gains taking' could suppress the stock somewhat early-on in the new year.

 

"Thus our buy-zone will be particularly wide; such as between 90 cents and $1.30 or so. One may elect to pay more and scale-in; though we’d prefer to buy in on pullbacks.

 

"Meanwhile, we note that their ability to service their debt should not be an issue presently; so we are interested to see what they do over the next year or two; not past 2012. 

 

"Our original interest in Broadwing -- now absorbed by Level 3 -- was the all-digital-optical as well as transcontinental (now to Europe as well) fiber system.

 

"This system has no latency as still is common with satellite and many other systems (including most fiber networks). 

 

"On top of that mobile carriers are increasingly looking to 'backhaul alternatives' to meet their increasing bandwidth needs, which should increasingly result in o?oading to fiber backhaul systems.

 

"The low latency is a reason why most sports and news networks are using Level 3 (two-way conversation reveals latency, whereas one-way conventional transmission doesn’t) for their HDTV broadcasts, and we believe that will increase in importance as 3D arrives eventually.

 

"Additional pluses in the fullness of time include bandwidth requirements in the Cloud Computing area; digitized medical record keeping; military uses (they have certain key Federal accounts) and certainly the growth of telecommunications in-lieu of physical travel.

 

"In the sense that reduced physical, and increased optical transport, is e?cient; that's actually a bit of a green' story as well."

 

 

"Longtop Financial Technologies (NYSE: LFT), our top pick for for 2011, was the first Chinese software company to list on the NYSE when its ADRs began trading in October 2007, and we're impressed by the progress made since then," says Timothly Lutts.

 

The editor of Cabot Stock of the Month Report explains, "Financial services industries are booming in China, and Longtop is a great way to benefit. We've long maintained that watching China’s growth in recent decades has been like watching a video of American history … but played at fast- forward speed.

 

"The transition from farming to industrial production was accomplished in one generation (in part by following the U.S. roadmap) and now the country is entering into the software era.

 

"Longtop Financial Technologies was founded in 1996 as a financial systems integration company, but made the transition to software and solutions in 2001.

 

"Today it’s the #1 developer of banking software in China and the #2 developer of software for the insurance industry. And now it's breaking into the securities industry; Longtop announced its first contract there in November.

 

"Longtop's main customers are banks; they accounted for 82% of revenue in the latest quarter.  And its biggest bank customers (no surprise) are the 'Big Four' banks of China. These are the Industrial and Commercial Bank of China, the Bank of China, the China Construction Bank, and the Agricultural Bank of China.

 

"These four banks together hold more than 65% of domestic market share. For Longtop, three of them (it's working to get business from the fourth) accounted for 48% of revenues in the latest quarter.

 

"In China, of course, the banks are healthy -- none have gone bankrupt, or been bailed out by the government. And none are expected to. Yes, business has slowed a little, but the future is still expected to bring great growth. And as the banks grow, Longtop will, too.

 

"In addition to banks, Longtop serves the insurance industry and the financial departments of major non-financial companies, and there’s no reason those won't grow, as well. But banks are the company’s bread and butter and will be for the foreseeable future.

 

 

"Furthermore, Longtop, which spends 5.8% of revenue on R&D, has new projects starting frequently. Recent announcements include projects on anti-money laundering, e-banking, financial testing solutions, financial risk management and data warehousing.

 

"And then there are acquisitions. Longtop completed the acquisition of Sysnet in second quarter, and it’s currently working on an acquisition that would be its biggest yet.

 

"Technically, Longtop’s stock chart is encouraging. After coming public in October 2007 at 18, it peaked at 35 and then drifted slowly down over the next year (with the market), bottoming at 10 1/2 in November 2008. By late February, it had recovered to 15, and that’s when the big move of 2010 began that took the stock to a high of 38.

 

"Currently, it’s digesting that advance; it may pull back as far as 32, where we now find the 50-day moving average. And if it does I recommend that you treat the pullback as a buying opportunity.

 

"While the American banking industry struggles, the Chinese banking and financial services industries are booming, and Longtop is a great way to benefit from that boom."

 

 

Energy sector expert Elliott Gue turns to Weatherford International (NYSE: WFT) as his top pick for the coming year. In his The Energy Strategist, he explains, "As with most oil services firms, Weatherford's North American business has been hit hard and the stock  now trades at a deeply discounted valuation.

 

"Weatherford is perhaps best known as an expert provider of services related to mature oilfields. Traditionally, Weatherford has had a strong presence in North America, which has been a proving ground for all sorts of technologies that squeeze oil from older fields. 

 

"An example is underbalanced drilling, a technique that prevents damage to mature fields. Weatherford's genius in recent years has been to take homegrown North American technologies and sell them internationally. 

 

"The firm has gradually lessened its exposure to North America and forged into international markets where profit margins are higher and profitability cycles less severe.

 

"It also wins points for expanding its business in Russia, a key market for both oil and natural gas production. Specifically, Weatherford purchased the oil services business of TNK-BP, BP's joint venture in Russia. 

 

"Weatherford’s stock has significantly underperformed the rest of the oil services industry since October, primarily due to concerns about Weatherford's Chicontepec contract in Mexico. 

 

"Chicontepec is a heavy oilfield that is the centerpiece of Petroleos Mexicanos’ (PEMEX) strategy to stabilize and grow oil production.

 

"The problem PEMEX faces is that production from its largest field, the o?shore Cantarell oilfield, has fallen o? rapidly in recent years to the point that Mexico's oil exports have tumbled. 

 

"Accordingly, PEMEX has decided to reexamine its development plans for Chicontepec and has cut investment in the field 22%. Because Weatherford is a big player in Chicontepec, its stock has fallen.

 

"Although PEMEX’s recent announcements caught the market by surprise and are bad news for companies with significant exposure to Mexico, the sello? that’s hit Weatherford's shares is overdone.

 

"Mexican oil production is falling fast; the country will have no choice but to bump up spending on Chicontepec. 

 

"Finally, Weatherford is trading at less than 17 times 2011 earnings estimates. This compares favorably to Schlumberger’s stock, which trades at 22.5 times 2011 earnings estimates. Shares of Halliburton and Baker Hughes (NYSE: BHI) trade at 21 times 2011 earnings. 

 

"Weatherford's deeply discounted valuation more than prices in all the bad news surrounding Mexico and Chicontepec. Take advantage of the recent decline to buy Weatherford International under 26."

 

 

 "Virginia Mines (Toronto: VGQ) remains my favorite gold exploration company," says resource expert Adrian Day.

 

 In choosing the stock as his top pick for 2011, the editor of The Global Analyst explains, "The company has a successful track record, top management and a super-strong balance.

 

"Virginia Mines has a successful track record, having discovered and subsequently sold to Goldcorp, the rich Eleonore deposit in northern Quebec. This discovery saw the stock go from the $2 range to the mid-teens.  Following the sale (which saw a spin out to shareholders), the stock is in the low $5s, ready to try again.

 

"Exploration by its nature is very high risk, with very long odds of discovery. Most companies finance their exploration by continual equity o?erings, which mean dilution for shareholders even if they are successful. 

 

"Virginia has a di?erent way: it is a prospect generating, looking for prospects, often by staking the ground, doing some exploration, and then looking for a joint venture partner. 

 

"The partner spends the high-risk exploration dollars in return for a majority ownership in the property. This results in a low-risk business model.

 

"Even though the company gives up most of the property, it holds on to its balance sheet and by doing this over and over, can build a portfolio of properties in which it owns minority interests with someone else spending the money.

 

"As Virginia has grown and built a strong bank account (it has has $44 million on its balance sheet), it is now in a position to do a little more exploration than in the past. This enables it to sift through its projects, and by advancing them more, obtain better deal terms.

 

"Virginia has build a broad portfolio of projects, all in mining-friendly Quebec, in a range of metals and minerals, but emphasizing gold.

 

"Right now, it has six properties ready to drill over the winter season, all in the prospective but under-explored James Bay area. Some of these are very close to the Eleonore discovery, on ground not included in the sale to Goldcorp.

 

"Virginia is spending the money on four of these properties, with two being funded by partners.  Some have brand new targets being drilled, others following up on previous drilling.

 

"While exploration remains long odds, Virginia has as good a shot as any, and at minimum, we expect the next six months or so to generate a lot of news on these properties that should see the stock buoyant.

 

"Any positive exploration results will see it move much higher. In the meantime, you can buy a fine company at less than NAV. Just the value of the royalty it retained on Eleonore and its cash in the bank are worth more than the entire market cap. All the exploration comes free.

 

"So you can buy a great company at below NAV. Despite the move up in the stock price in recent months, this is an excellent time to buy, ahead of this aggressive drilling campaign.  We expect 2011 to be very good for Virginia and its shareholders."