The Best Stocks for 2009

Christmas and New Year's are fast approaching, and we all know what that means: gift-giving and parties!

OK, those, too. But I was thinking more along the lines of your investments, now that 2008 is finally drawing to a close. It's no mystery that this has been a tough year for stocks and investors, with the economy dragging on just about every industry under the sun. In that light, it's also no surprise that of the companies we highlighted last year in our "Best of 2008," only a handful are in the black:

  • Gilead Sciences (Nasdaq: GILD  )
  • Marvel (NYSE: MVL  )
  • Buffalo Wild Wings (Nasdaq: BWLD  )
  • McDonald's (NYSE: MCD  )

Three others -- Archer-Daniels-Midland (NYSE: ADM  ) , Johnson & Johnson, and Yum! Brands (NYSE: YUM  ) -- fell less than the S&P 500 did year to date. Even Apple (Nasdaq: AAPL  ) , the CAPS community's choice for last year's Best Stock, has fallen more than 50% this year.

But step back a moment and look at these stocks again. While Apple's share price was yo-yo-ing up and down, the company grew revenue, increased both its gross and net margins, and increased the cash on its balance sheet by $9 billion over the course of its fiscal year. Is that the behavior of a terrible company?

And what about J&J? The share price was mostly flat for the year, until October brought on volatility and a steep plunge. However, over the trailing-12-month period, J&J increased return on equity by 360 basis points. It's also recently made two acquisitions that should increase revenue and earnings going forward. Still sound so bad?

That's why Fools like to look at what companies do in the long term, rather than what the stock price does in the short term. It's also why we think this year's selections will do well as companies, and hopefully as stocks, in 2009 and beyond.

Take a few minutes to peruse this year's offerings. Then head on over to CAPS, the Fool's investor intelligence database, and rate them as either an outperform or underperform going forward. Once we've got your votes, we'll come back to tell you which one readers like you believe will be the best way to boost your portfolio. Until then, have some egg nog, get as close to or far from the mistletoe as you like, and celebrate the end of a long and challenging year.

The Best Stocks for 2009:

As always, when we mention companies in an article, we have to disclose what our various subscription services think about them. Here goes: Somanetics is a choice of Motley Fool Hidden Gems Pay Dirt. Buffalo Wild Wings is a Hidden Gems selection. Netflix, Marvel, Costco, Amazon, Apple, and Starbucks were picked for Stock Advisor. Pfizer, Costco, and Starbucks are recommendations at Inside Value. J&J and Pfizer were chosen for Income Investor. And Google is a Rule Breakers pick. Furthermore, the Fool owns shares of Starbucks, Buffalo Wild Wings, and Pfizer in its own right. Whew!

Fool editor Jim Mueller is glad this year is almost over; he's been buying beaten-down stocks recently. His holdings include J&J, Buffalo Wild Wings, Pfizer, Starbucks, Netflix, Yum! Brands, Marvel, and he's a beneficial owner of GE. The Motley Fool is all about investors writing for investors.


Read/Post Comments (25) | Recommend This Article (168)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On December 18, 2008, at 5:25 PM, FinancialFellow wrote:

    I feel like listing "Best Stocks for 2009" shouldn't be too difficult as just about any stock you pick will do well if the market bounces back next year. Then again, if you compare the performance of the stock to the S&P 500 I suppose that changes things.

    If Motley Fool picks stocks for the long term, as stated above, then it kind of takes some of the fun of picking the best stocks for 2009. If your "Best Stocks for 2009" list consists of stocks that you measure over the long term (many years) doesn't that contradict the term "Best Stocks for 2009" a little bit?

    If anything is for sure in 2009 I think that it is that cash will continue to provide dismal returns. Which brings me to the question: Does anyone even carry cash anymore? http://financialfellow.com/2008/12/17/poll-do-you-still-carr...

  • Report this Comment On December 18, 2008, at 5:56 PM, peter39 wrote:

    Isn't ACG "great"" enough toi make your list?

    Can they keep on with their 9.1 yield

  • Report this Comment On December 18, 2008, at 6:03 PM, Buffetisbest wrote:

    Why is Starbucks on this list even though they were the subject of the Scariest Stock article?? That doesn't make sense..

  • Report this Comment On December 18, 2008, at 6:44 PM, trgeorge wrote:

    I agree with what buffetisbest said about Starbucks.

    The only pick on this 2009 list I like is J&J.

  • Report this Comment On December 18, 2008, at 7:16 PM, wolfhounds wrote:

    I'm curious why stocks like SNHY, VTIV, PM, which I think meet the qualifications for beaten down price with businesses which should handily beat the S&P going forward.

    I also agree with the comment about SBUX. I'd sooner buy BBY which at least has lost a major competitor. SBUX may have talk consumers a permanent lesson about the value of over priced coffee.

  • Report this Comment On December 18, 2008, at 9:04 PM, mberan wrote:

    Starbucks, Starbucks, Starbucks. Are all of you becoming shills for this company? Over roasted and still over priced. I'm going to the siri next to see what shill is touting this one. I've about had it. I thought the Fools were long term investing, not touting stocks.

  • Report this Comment On December 18, 2008, at 9:07 PM, Lola049 wrote:

    Now that the govt owns a piece of the rock, what about AIG? Ford or GM?

  • Report this Comment On December 19, 2008, at 10:40 AM, palaceplace wrote:

    u have left out the truly defensive play, the ultra shorts. DXD,TWM SDS QID,etc.the best bet of all will be 1) DZZ,for the collapse of gold and 2) SRS for the destruction of what's left of real estate.

    stop following the herd.just because mkts. lost 40% in 08 does not mean that they can't lost 40% in09.

  • Report this Comment On December 19, 2008, at 6:56 PM, darylhicks wrote:

    buy john deere how can you lose.

  • Report this Comment On December 20, 2008, at 3:40 PM, chantillydude wrote:

    I am afraid that I'm beginning to conclude that rwandamassacre is right. Timing markets and moving away from small cap stocks is a real change of what appeared to have been the MF philosophy. Do we really need to pay a small cap service to "guide us" to Altria, Pfizer, Starbucks, and General Electric?

    The other change is the notion that macroeconomic conditions are key to understanding how well companies will do that have disruptive busness models and products. I thought the MF philosophy was that disruptive modeles and technologies outperform the ups and downs of market cycles, guess not eh?

  • Report this Comment On December 22, 2008, at 9:09 PM, golfmom2001 wrote:

    I might as well buy a large cap growth fund.

  • Report this Comment On December 26, 2008, at 2:20 PM, hrhofmann wrote:

    I'd like to see them repost their list of 2008 best stocks, and compare them to , let's say, the S+P 500.

  • Report this Comment On December 26, 2008, at 3:46 PM, k6fv wrote:

    Stock in wheelbarrow manufacturers to go up?

    As US public will need them to carry enough devalued bills to buy groceries.

  • Report this Comment On December 26, 2008, at 3:59 PM, 53doorman wrote:

    Seriously. How can you slam Starbucks as scary in one article and recommend it in another simultaneously?

    Check the integrity of your picks, guys.

  • Report this Comment On December 26, 2008, at 6:23 PM, norminsd wrote:

    What a list of current losers. Thanks, I'll stick with my carefully tracked and screened small caps in any sector. This market will punish anyone who doesn't have the time or energy to keep a daily and weekly watch on his holdings.

    Ultrashorts have been best all year until Nov. 20th; not the way to go now, with the market bouncing up and down every other day.

    Watch for more ping-ponging until Jan. 20, then be ready to make money in infrastucture and (maybe) auto and related stocks. Health care will continue to pay off--everyone gets sick.

  • Report this Comment On December 27, 2008, at 5:11 PM, corkbouy wrote:

    Starbucks? How about Green Mountain Coffee Co. you touted today? The economy is in a tailspin and you think there will be an increase in people paying $5 for a bitter coffee you have to drench in milk and whipped cream? Do you think the enormous amount of people who lost their jobs last month will wait in line at SBUX?

    I believe you said it was a buy in the low $20's, when everyone smart was selling or shorting.

    Corkbouy

  • Report this Comment On December 27, 2008, at 5:14 PM, corkbouy wrote:

    What are the symbols for:

    Agnico-Eagle Mines, Core Laboratories, and Somanetics?

    MSN has no clue.

    Thank you,

    Corkbouy

  • Report this Comment On December 28, 2008, at 12:21 PM, getwet2 wrote:

    Corkbuoy ,Yahoo finance had no trouble with those symbols AEM , CLB , SMTS

  • Report this Comment On December 28, 2008, at 10:07 PM, lucidguru wrote:

    This portfolio and many others for 2009 are being tracked at:

    http://www.gainerstoday.com/UserSearch.aspx?PageNumber=1&...

  • Report this Comment On December 28, 2008, at 11:41 PM, jojo291966 wrote:

    Research! Research! Research! Don't be a FOOL! Conduct your own research on all of these stocks. There is too much opinion and innuendo and not enough empirical data supporting these ("best stocks of 2009, stocks that will burn you", etc) suggestions. HELLO!!!!

  • Report this Comment On December 29, 2008, at 1:25 PM, MasterRoshi wrote:

    c'mon, are you guys kidding?! of course all these stocks are 'losers' now, and prob for another 2-3Q. Apple fell to 2/5ths its alltime high, and I happily buried myself in it in Nov, along with other 'losers'. It's only a matter of time before they all recoup at least 2/5ths of that loss. While folks i know are hiding cash in 'safer', lo-yeild investments, most of us investors are willing to wait 6-9 months to clean up. Starbucks? i wouldn't have given a plugged nickel for prior, but crisis can be a crucible to refine business models, and SBUX will be one to watch.

  • Report this Comment On December 30, 2008, at 10:41 PM, HiroSanchez wrote:

    I wonder, how many of you have actually gone into Starbucks and ordered just a coffee? It's actually not that expensive, under $2 for a large coffee. If you order one of the fancier coffee-based drinks, yes, you pay quite a bit, but a lot of you are forgetting that many people just go to Starbucks for a coffee with no more than sugar and cream. $2 is not much to pay for relatively good coffee and a relaxing atmosphere. It certainly is not going to break the bank of the middle class.

  • Report this Comment On January 01, 2009, at 11:48 AM, Incredulous1 wrote:

    How about clueing to some "hidden" gems, W/O having to pay the scripton on that. Maybe just one or two. WHat about something you think is gonna "POP" within the next 3 mo.?

  • Report this Comment On January 02, 2009, at 10:37 AM, briboe wrote:

    My prediction for 2009 that will be 100% accurate: my subscription to the Motley Fool won't get renewed.

  • Report this Comment On March 20, 2009, at 2:43 AM, FX123 wrote:

    I am switching to Forex Trading with www.fxdd.com in 2009.....Currency Trading is the life for me!

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