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Stock Picks for 2012!

January 2nd, 2012 by 
PK

Ahh, New Year, new resolutions, and new stocks for stock-picking competitions.  We are a web site ostensibly about Personal Finance and investing, so I'd be remiss if I didn't enter a few contest this year.  I'm entering a 4-stock contest run by Nelson at Financial Uproar.  As always, just because I picked stocks here doesn't mean I'm telling you to buy them - so do your own due diligence!

Here's what I'm going with in 2012:

Picture of lady picking fruit

Pick a Good One! (Gabriela Camerotti)

  • Vascular Solutions, Inc. VASC - A medical device company based in Minneapolis launches my 2012 picks!  Sure, we could argue the macro effects of the uncertainty in the medical field due to the Patient Protection and Affordable Care Act (careful, it's 4,000 words if you read the whole series...), or we can talk about a well run-company.  A 13.16% Return on Assets and a 37.68% Return on Equity in the face of zero debt and a 8.5 trailing P/E?  Sign me up.
  • PDL BioPharma, Inc. PDLI - What am I, chasing yield?  Even though it does yield 9.7%, chasing yield isn't my style of investing.  Here's a company which is also in the medical field but makes it's money by licensing drug patents to other companies.  Risky?  Sure... but with risk (hopefully) comes reward, and I've got my fingers crossed for a rewarding 2012 for PDLI.
  • Neutral Tandem, Inc. [[TNDM]] - Three small caps in a row, and we're entering the tech field.  I usually steer clear of tech (I usually subscribe to the "avoid investing in your own company" theory.  I like to extend it to industry, even.) but this is a fantasy stock picking contest, so let's throw this IP telephony company into the mix.  44.9% year over year revenue growth, 1.32 Price to Book, and decent RoE/RoA?  It's worth tossing 25% of the fantasy cash towards.
  • AFLAC, Inc.  AFL - I enjoy how the insurance business works, and I present to you the company on this list you've most likely heard of: AFLAC.  Yes, this AFLAC.  11.9% YoY revenue growth (and not from a small number), big profits and a 1.59 price to book.  As with most insurance companies, watch out for natural disasters - they can quickly send profits south as payouts increase.

Your Thoughts?

Now that I've laid bare my investing soul, please rip my picks apart or agree amicably in the comments.  Remember, it's all theoretical until we actually see their performance as the year goes on - and 1 year is a definite time-frame.  Stocks may be attractive overall but might not start moving for a painfully long time.  My preferred holding period is much longer than a year, so it will be interesting to see if my methods break down with only 366 days in 2012!

Full Disclosure

I have AFLAC in my personal portfolio.  I also previously owned PDL BioPharma, but sold it more than 6 months ago.

Editor's Update!

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