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Best Ideas for 2010, and for 2011

January 06, 2011 | About:

At the beginning of 2010, we had a thread initiated by kfh227 called for the Best Ideas for 2010. A number of users responded with their best ideas. These are the recommendations and the performances of these stocks:

Symbol Dec. 31, 2009 Dec. 31, 2010 Gain (%)
PG 60.8 64.33 6%
JNJ 64.68 61.85 -4%
USG 14.05 16.83 20%
WCG 36.76 29.58 -20%
ABK 0.83 0.11 -87%
SODI 2.2 2.66 21%
WINN 10.04 7.18 -28%
ALGN (Short) 17.82 19.54 -10%
PFE 18.19 17.51 -4%
CSCO 23.94 20.23 -15%
NILE (Short) 63.33 57.06 10%
PM 48.19 58.53 21%
UVV 45.61 40.7 -11%
AOI 4.88 4.24 -13%
GRMN 30.7 30.99 1%
CTLUK.PK 0.2 0.24 20%
RHIEQ 0.3 0.02 -93%
VTRAF.PK 9.48 9.36 -1%
CHL 47.02 49.62 6%
WMT 53.74 53.93 0%
BAX 58.99 50.62 -14%
WMT 53.74 53.93 0%
ABB 19.59 22.45 15%
Average -8%

As pointed out by superguru, the performances of the best ideas are unimpressive. The best performing stocks are Philip Morris International (PM) and Solitron Devices Inc. (SODI). Both gained about 21%. A number of the picks suffered large losses.

In a year that S&P had double digits gains, these picks did not perform as expected. This proves again that how hard it is to beat the market by picking better stocks.

As we reported, GuruFocus value strategies beat the S&P 500 By large margins. Among those, undervalued predictable portfolio was up 20.4%; all 25 positions gained. Therefore, if you had bought any of the top 25 undervalued stocks in our value screen, you gain. 17 out of the 25 stocks gained more than the market. 7 of them gained more than 50%. 3 of them were more than doubled.

Folks, you can do better. Please share your best ideas for 2011 here. We will select two winners for 2011 contest. The No. 1 winner will win $100 toward his/her premium membership, and the No. 2 winner will win $50. Please share your best ideas below. You can list up to 3 stocks. Your performance will be the average of the stocks you pick.

About the author:

Charlie Tian, Ph.D. - Founder of GuruFocus. You can now order his book Invest Like a Guru on Amazon.

Rating: 4.5/5 (13 votes)


Batbeer2 premium member - 6 years ago
Good to keep the tradition going.

Solitron (SODI). Here's why: http://www.gurufocus.com/forum/read.php?2,79017,109943#msg-109943

Corinthian Colleges (COCO). Here's why: http://www.gurufocus.com/forum/read.php?2,105285,page=1

USG (USG). Here's why: http://www.gurufocus.com/forum/read.php?2,70378,73413#msg-73413

Superguru - 6 years ago    Report SPAM
Gurufocus - Great Job on your value strategies.

This year I plan to check Gurufocus value strategies for my ideas shortlist. I did get few ideas last year from them, now I wish I had looked them up more. Is it possible to see if any stocks show up in more than one GuruFocus strategy?
Gurufocus premium member - 6 years ago
Good points, Superguru. But we don't have a tool for that purpose.
Superguru - 6 years ago    Report SPAM
Not a problem, I will focus on low p/b, low p/s and undervalued predictable and guru majority owned strategies and see if I like any stocks there.
DocMoney - 6 years ago    Report SPAM
OK... Let's do this again and do better:)

1. LLL - Cheap, hated and very relevant. The portion of defense spending that flows to it is unlikely to decrease significantly and may in fact increase - when the market realizes that government will stay in defense business, undervaluation should correct. The company has been paying down debt and making some relatively inexpensive acquisitions which should be at least accretive, if not synergistic.

2. JNJ - Dogged by recalls, this cash cow should benefit from Simponi and Xarelto, as well as from growth in emerging markets. When the recall black cloud clears, stock price should increase.

3. MSFT - Dominant company with tens of billions of cash in its warchest, MSFT has recently been hitting on all cylinders. Windows is still hugely dominant, as is Office. Xbox with Kinect have been huge hits. Yet, investors love to hate the company. Low Price/FCF and huge CROIC make MSFT grossly undervalued. Growing dividend should help the stock price.
ASTA83 premium member - 6 years ago
Well my Idea is risky its on one of my stock screens.


AMERICAN ORIENTAL BIOENGINEERING INC. is a pharmaceutical company dedicated to improving health through the development, manufacture and commercialization of a broad range of prescription and over the counter products in China.

I think one of gurufocus.com gurus owned it before. and its gone down 54% senes making it to my stock list.
Waterats premium member - 6 years ago
Konstantin - 6 years ago    Report SPAM
My best ideas for 2011 are:

C (Citigroup)

Dt. Bank (XETRA)

Graemew - 6 years ago    Report SPAM

My best idea is

JMHLY - Jardine Matheson Holdings....

I admit I found this idea thanks to David Winters portfolio....I believe this is his largest holding.

This is an Asian conglomerate.

Jrhubbard - 6 years ago    Report SPAM

Swinging for the fences.
Paulwitt - 6 years ago    Report SPAM

Kfh227 - 6 years ago    Report SPAM
LEE - A FCF positive newspaper trading at 1-2x normalized FCF that is entering an improving economy which should bring more revenues through help wanted ads. Also, remember that their product is articles. Technology is just changing the delivery mechanism. The industry in general is working towards moving towards content delivery via subscription through Kindle and iPod like devices. I know LEE was working on a kindle subscription based application.

SD - Oil prices are going up. Eventually, long haul trucking will move to natural gas. The improving economy alone should drive up oil prices and in turn natural gas prices but the trucking industry is a catalyst. Join Prem Watsa who owns a 12% stake. T Boone Pickens also owns some stock.

A third stock is tough. I think USG is more undervalued that JNJ but unlike USG, I am fairly confident that JNJ will in fact be up this year. So:

JNJ - not as much upside potential as LEE and SD but still upside potential. It's a no-brainer that it is worth over $70. I honestly view it as being worth $95-$100.

So, there you have it. My picks.

PS: This is a good time for this discussion. Bargains are harder to find these days. The ideas are appreciated.


Could you expand your thoughts on JMHLY (Jardine Matheson Holdings). I'm curious about quality, valaution, catalysts, etc. What is your thesis?
Toddius - 6 years ago    Report SPAM
BAC - financials are out of favor but dividends are on their way back. Nice contrarian play, difficult to value. Financials come back as the economy does. Hopefully risk taking is reigned in a bit with regard to derivatives.
Kfh227 - 6 years ago    Report SPAM

Toddius, I agree with financials but BAC is not well run at all.

This time next year, we should revisit the 2010 picks just to see what happened and do this for many years to come since value ivnesting is always about corrections over the long term.
Nealster - 6 years ago    Report SPAM

MA (once regulatory cloud abates, MA should move based on great growth in emerging markets, europe; aggressive new CEO; global move away from cash and to plastic forms of payment)

ABT (historically cheap; nice dividend; great prospects internationally; diversified businesses with good growth potential; huge cash cow; fortune's most admired pharma company)

MSFT (same reasons as doc money above, msft is way undervalued as I believe windows are office are stickier products than many believe)

Paulwitt - 6 years ago    Report SPAM
You can list up to 3 stocks. Your performance will be the average of the stocks you pick. I took the liberty of copying and pasting the contest rules.....:)

Petitmartinique - 6 years ago    Report SPAM
My best ideas VIP VimpelCom Ltd. , LUKOY Lukoil, CHK Chesapeake Energy.

Good luck to all of you in 2011.
Cm1750 - 6 years ago    Report SPAM
Top 2011 pick is PEP (currently $66.26).

Superguru - 6 years ago    Report SPAM
For the sake of having some fun, here we go, My picks

SD (current price - 7.81) , STD (current price - 9.92) and NBG (current price : 1.57)

IMO, SD and NBG are very speculative.
Paulwitt - 6 years ago    Report SPAM
American International Group, Inc. AIG announced today that its Board of Directors has conditionally declared a dividend of approximately 75 million warrants to purchase shares of AIG common stock at $45 per share (the Warrants) to be distributed on January 19, 2011, to AIG’s common shareholders of record as of January 13, 2011. I copied and pasted the above from the moneycentral.com website. AIG is currently at $61.18

K8627jtm - 6 years ago    Report SPAM
Gurulands premium member - 6 years ago

1. DYP - Duoyuan Printing Inc

2.XIN - Xinyuan Real Estate Co. Ltd.

Gangstarr - 6 years ago    Report SPAM
MBI - Buying into Berkowitz's thesis on MBIA. Market doesn't like the uncertainty surrounding the lawsuits and future underwriting ability. Downside Protection: Trading at or below tangible book value. Adjusted book value is approx. $36 per share even if MBIA never writes another piece of business. Catalyst-lawsuit (Aurelius Capital Master, Inc., et al v. MBIA, No. 09 Civ. 2242) may be resolved in MBIA's favor in 2011 regarding the Transformation. MBIA could be successful in settling its liability and exposure for less than estimated and/or winning put-back suits, fraudulent inducement/fraudulent misrepresentation suits.
Mikebulcock - 6 years ago    Report SPAM
My pick is TSCM - TheStreet.com @$2.65

- Market cap 83.9m

- Cash & investments 79.7m (nice downside protection)

- Dividend Yield 3.7%

- [i]CBS bought CNET for roughly 4.5x sales and Dow Jones (NWS) bought MarketWatch Inc. for 5.5x revenues.
[/i][i]If TSCM is worth 3x sales TSCM is worth at least $6.

- Cramer has signed new 3 year contract.

- Retail investors likely to be back in market and buying newsletter subscriptions in 2011.

- New CEO & CFO concentrating on reducing costs and increasing sales.

- Advertising and subscription revenues are highly cyclical. We are now in the upcycle.

- cashflow positive since 2004.

- Sold loss-making promotions.com.

- Cramer to semi-retire in 3 years, likely to want to cash out and hence sell TheStreet.com in this upcycle.
Kfh227 - 6 years ago    Report SPAM

Good to keep the tradition going.

Solitron (SODI). Here's why: [

Corinthian Colleges (COCO). Here's why: [

USG (USG). Here's why: [

I had to revisit USG. I am in agreement about what you said in hte thread. I'd be willing to go 100% in USG. People are to short term oriented and do not see the value presented by USG.

I'm in 30% cash right now and am praying for a dip soon. hoping a lowering tide will allow me to buy some SD, USG and LEE
David Pinsen
David Pinsen - 6 years ago    Report SPAM
I'm go for AYSI again (AYSI.PK) as my best pick for 2011.

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