That’s the question posed to 10 money managers, market experts and financial journalists. And their lineup of stocks might surprise you. There are industrial giants, consumer names -- even a European bank!
A lot can change in a year, but here are some of the best picks from some of the best minds on Wall Street:
1. Caterpillar
Investor and CBS MoneyWatch columnist Dan Burrows picked industrial giant Caterpillar (NYSE:CAT) as his best stock for 2012. His reasons? Dan says CAT stock was oversold during the summer volatility, has good fundamentals (including retail sales that grew 31% in October) and a bargain valuation with a forward price-to-earnings ratio of about 10. (Read Dan’s complete recommendation on Caterpillar.)
2. FedEx
CNNMoney’s Paul R. La Monica said settled on FedEx (NYSE:FDX). Don’t think this is just a play on a broad-based recovery, though. A discounted P/E ratio vs. rival UPS (NYSE:UPS), a strong dividend history, recent rate increases and the lack of competition from a U.S. Postal Service in disarray are all reasons to be bullish on FedEx. (Read Paul’s complete recommendation on FedEx.)
3. Hershey
Top trader, journalist and money manager Jon Markman has a sweet play for you in 2012: confectioner Hershey (NYSE:HSY). Why this consumer stock? Well, because in the short term, Jon is decidedly bearish on just about all corners of the market. The euro zone debt crisis will continue to rock Europe and subsequently affect nations that export goods there or rely on plush government subsidies from the continent. Jon says chocolate is a consumer staple that is going strong -- and if you disagree, “try explaining to my daughter that chocolate isn’t a household staple.” (Read Jon’s complete recommendation on Hershey.)
4. Capital One
Banks aren’t exactly super popular right now, so it might surprise you to see senior analyst Philip van Doorn of TheStreet picking Capital One Financial (NYSE:COF) as his best stock for 2012. But a closer look at Capital One shows a lot to be bullish about, even as the rest of the financial sector melts down. Namely, strong fundamentals and a historically low valuation and book value. (Read Philip’s complete recommendation on Capital One.)
5. Mako Surgical
David Gardner knows a thing or two about picking stocks. As co-founder of The Motley Fool, he is the brains behind the innovative Motley Fool CAPS rating system. And from his own research and what other investors are saying, David thinks he has a quite a pick for 2012 in Mako Surgical (Nasdaq:MAKO). What makes Mako special? It’s an innovative medical device company that has revolutionized joint replacement. It’s not profitable yet, but the potential is huge, and stories of treatments and recovery are quite dramatic. (Read Dave’s complete recommendation on Mako.)
6. Microsoft
Blogger, author and founder of Stockpickr James Altucher joined a similar InvestorPlace.com feature in the beginning of 2011, picking one stock to buy and hold all year. Back then, he picked Microsoft (Nasdaq:MSFT) -- and his choice is the same a year later. The highlights of this year’s recommendation include a P/E that is eight times earnings, huge stock buybacks and the fact that “Skype replaces all smartphones within next five years.” (Read James’ complete recommendation on Microsoft.)
7. Arcos Dorados
Josh Brown, adviser at Fusion Analytics and the author of The Reformed Broker blog, picked freshly minted Arcos Dorados (NYSE:ARCO) as his top pick for 2012. ARCO is the largest McDonald’s (NYSE:MCD) franchisee in the world with more than 1,750 locations, largely in Latin America. Expanding consumer spending in Latin America, the ferocity of McDonald’s as a global brand, growth within a defensive sector and the comeback potential for emerging-market equities in 2012 make ARCO a great buy. (Read Josh’s complete recommendation on ARCO.)
8. Turkcell
Money manager and stock picker Charles Sizemore, CFA, picked Visa (NYSE:V) as the single-best stock to buy and hold for all of 2011 -- and thanks to market-trouncing returns of 40% year-to-date, his Visa pick was the winner among 10 picks in our similar contest last year. This year, Charles gets a purer play on emerging markets with telecom stock Turkcell Iletisim Hizmetleri AS (NYSE:TKC), a mobile phone operator more commonly known just as “Turkcell.” (Read Charles’ complete recommendation on Turkcell.)
9. Alcoa
As with previous picks Caterpillar and FedEx, InvestorPlace.com editor Jeff Reeves has leaned in favor of broad economic recovery with his recommendation of aluminum giant Alcoa (NYSE:AA). Jeff says, “Alcoa hasn’t seen the $9 level since spring 2009. Are the macroeconomic fears really worse now than in 2009?” In addition to valuation, Jeff likes Alcoa’s improving earnings, dividend potential, streamlined operations and hope for better margins in 2012. (Read Jeff’s complete recommendation on Alcoa.)
10. Banco Santander
According to longtime stock picker, financial columnist and money manager Jim Jubak, your best bet for 2012 is a European bank. Really! It’s an aggressive play, but Jim’s faith in Banco Santander (NYSE:STD) comes from a lot of number crunching -- and the idea that as bad as things are over in the euro zone, they aren’t as bad as you think. “The worry about European banks right now is that they can’t raise capital in the financial markets,” Jim writes. “During the past two quarters, Banco Santander has very clearly demonstrated that this bank doesn’t fit that profile of worries.” (Read Jim’s complete recommendation on Banco Santander.)
Tom Taulli runs the InvestorPlace blog IPOPlaybook, a site dedicated to the hottest news and rumors about initial public offerings. He also is the author of “All About Short Selling” and “All About Commodities.” Follow him on Twitter at @ttaulli. As of this writing, he did not own a position in any of the aforementioned stocks.
