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
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Fool contributor Christopher Barker's favorite band will likely remain the Beatles. He can be found blogging actively and acting Foolishly in the CAPS community under the user name TMFSinchiruna. He owns shares of Agnico-Eagle Mines and Harvest Energy Trust. The Motley Fool likes to sing "Hey Jude" to its disclosure policy.