If you had to pick just one stock to invest in for 2009, what would it be, and why?
I posed that question to the Motley Fool CAPS community on my CAPS blog, and the responses I received were phenomenal. The insight and cooperative spirit of the CAPS community continues to reflect what it means to be a Fool. Let's explore some pet stocks to see whether they generate some fresh ideas for your portfolio.
The good egg
Fools are considering strong plays for a recession. CAPS member catoismymotor made a case for egg producer Cal-Maine Foods
Times are hard for small mom and pop operations. Many of them are looking to sell. This creates opportunities for companies like Cal-Maine. They just picked up a smaller egg producer in Florida, making it possible to expand their territory and increase their sales. This is a great small cap that is simple, dull and profitable. Who is going to stop eating eggs in a recession?
That introduced me to Cal-Maine Foods, and I wanted to take a closer look. According to quarterly results released this week, although retail demand for eggs held up well, a notable decline in demand from the food service industry has cut into the company's profits. Then again, the balance sheet looks reasonably healthy, and the shares are already off 40% from their 52-week high. I like this pick and will put Cal-Maine Foods on my CAPS watch list.
Energized about energy
Because oil and gas prices have fallen off a cliff since last summer, CAPS members are going bargain-hunting. If these prices stay this way, Harvest Energy Trust
Harvest is encouraging for its continued strength and ability to pay out a substantial dividend.... It carries the promise to further shrink its margins and stands to gain a lot if(when) oil creeps up again. Plus it makes a strong hedge against a falling dollar and increasing inflation from the trillions of dollars America is spending on bailouts and buyouts.
Meanwhile, Enigmadude believes the double-digit dividend yields will be safe at Energy Transfer Partners
CAPS All-Star goldminingXpert, whose score is in the top 10, prefers Western Refining
Burgers and baby powder
After watching the Dow Jones Industrial Average lose 34% in 2008 -- the index's worst showing since 1931 -- Fools are scouring the blue chips for some long-term investing opportunities. CAPS All-Star rd80 selected McDonald's
In summary, [McDonald's] is growing revenues and earnings in a tough economy and they're doing it in around the world. The company has beat analysts' earnings estimates each of the last four quarters. The dividend was recently raised to $0.50 per share per quarter, yielding 3.77% based on Friday's close. For reference, that's a higher rate than a 10-year Treasury.
One can hardly argue with the resilience of McDonald's shares, and the franchise's global reach insulates earnings from the potential ravages of a declining U.S. dollar. Fellow Dow component Johnson & Johnson
For the record, my selection for best stock for 2009 was Agnico-Eagle Mines
- Another Fool's vote for Johnson & Johnson
- More top picks for the new year
- The biggest losers of 2008
On Jan. 12, 2009, Fool co-founder David Gardner, Jeff Fischer, and their Motley Fool Pro team will accept new subscribers to their real-money portfolio service. Motley Fool Pro is investing $1 million of the Fool's own money in long and short positions in a range of securities, including common stocks, put and call options, and exchange-traded funds (ETFs). They also incorporate proprietary CAPS "community intelligence" data into their research. To learn more about Motley Fool Pro and to receive a private invitation to join, simply enter your email address in the box below.