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The Best Stocks for 2009

By Jim Mueller, CFA - Updated Apr 5, 2017 at 7:57PM

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Which of these stocks might best help your portfolio's recovery next year?

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.

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Stocks Mentioned

McDonald's Corporation Stock Quote
McDonald's Corporation
$266.67 (0.14%) $0.38
Apple Inc. Stock Quote
Apple Inc.
$173.33 (0.17%) $0.30
Yum! Brands, Inc. Stock Quote
Yum! Brands, Inc.
$118.96 (-0.07%) $0.08
Archer-Daniels-Midland Company Stock Quote
Archer-Daniels-Midland Company
$85.83 (-0.87%) $0.75
Buffalo Wild Wings, Inc. Stock Quote
Buffalo Wild Wings, Inc.
Gilead Sciences, Inc. Stock Quote
Gilead Sciences, Inc.
$66.48 (0.23%) $0.15
Marvel Entertainment, LLC Stock Quote
Marvel Entertainment, LLC

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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