My 5 Best Buy Ideas of 2012

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Mar 07, 2012
In this article, I will be highlighting five of my best buy ideas. I chose these stocks because they show a lot of potential for growth and returns as they are undervalued, chosen as top picks by insiders, and have strong fourth-quarter earnings. They will be extremely helpful in crafting a diversified portfolio and minimizing risk. The five stocks which I find to be most attractive are:


Dominion Resources (D, Financial): This stock is currently trading at a price just above $50 per share. A majority of the industry experts believe that the price will fall soon but some suggest that it will remain unchanged. The 52-week trading range for the stock is between $43 and $54 per share approximately. Market capitalization at current price is nearly $29 billion and the average trading volume is close to 3 million. Earnings per share (EPS) are almost $3 and the price-to-earnings (P/E) ratio is above 20.The stock has a dividend yield of more than 4%, and the dividend payout rate is above 2. The last paid out dividend amounted to 53 cents per share. Beta for this stock is calculated to be 0.47, which signifies that this is a safer investment. Debt-to-equity is 1.62 and the profit margins are almost 11%.


This stock is among the top insider buys for this week. This is primarily due to low risk and better returns that it offers to its investors. In my opinion, this would be a good investment option for investors who want to build a diversified portfolio and at the same time want to minimize their risk. For this reason, I would categorize it as one of the best buys in the market right now.


Equity One (EQY, Financial): The current trading price for this stock is nearly $20 per share. There are some experts in the market who believe that the price will remain constant while others are of the opinion that it might fall. The 52-week trading range for this stock is between $15 and $21 per share approximately. Market capitalization at current price is above $42 billion. Earnings per share are close to $1, and the price-to-earnings (P/E) ratio is almost 39. The last dividend paid out by the company amounted to 22 cents per share and the dividend yield is calculated to be 4.5%. The beta for this particular stock is 1.21, which indicates that there might be a bit of risk involved with this investment, but it does have the potential to offer higher returns as well. Debt-to-equity is 1 which suggests that the company is stable. With a profit of up to 15%, this company has been showing positive trends in terms of sales growth. The stock has been given a rating of 10 by analysts.

An evaluation and analysis of the financial highlights of the fourth quarter of 2011 reveals that the company might be able to increase its profits by 10% in this quarter. Earnings for investors are therefore, projected to increase as well. This will have a positive impact on the share prices too. I believe that this stock is one of the best options to buy right now. It offers higher returns and the risk factor is not very high either.


Goodrich Petroleum (GDP, Financial): This stock is currently trading at close to $18 per share. The price had fallen during the last few weeks by almost 4%, but experts predict that it will now remain constant for a while with chances of increasing as well. The 52-week trading range for this stock is between $10 and $24 per share approximately. Market capitalization at current price is close to $633 million. Earnings per share are in negative territory at the moment due to a recent loss to the company. However, sales have been growing at a rate of 34% and the debt-to-equity ratio is approximately 3. Beta for the stock is just above 1 and this indicates that the stock is still a much safer investment than many others. It is being reported that the company is now working on regaining stability and recover from the losses.


It is also being reported that this is one of the six popular stocks which were invested in by hedge funds and insiders during the previous quarter. In more recent news, it has been noticed that the share price of Goodrich petroleum has increased this week by almost 1%. They are now trading at almost $18 per share. This presents a positive picture for investors because there are opportunities of growth and returns available. In my opinion, this stock is showing a lot of potential and would be a viable option to invest in.


Honeywell International (HON, Financial): This particular stock is trading at a price of approximately $60 per share. Some experts in the market believe that the price will fall, but others have suggested that there are higher chances of it remaining stable. The 52-week trading range is between $41 and $57 per share. Market capitalization at current price is more than $46 billion. Earnings per share are just above $2 and the price-to-earnings (P/E) are more than 25. Dividend yield for this stock is almost 2.5% and the last paid out dividend amounted to 37c per share. The dividend rate is close to 1.5. The debt to equity is 0.70 and the beta is calculated to be 1.39. This indicates that there might be a bit of risk involved but the company is relatively stable and can offer better returns than the market average.


Despite being a market leader in its business category and being financially solid, Honeywell International is an undervalued stockaccording to some experts. I believe that this stock has a lot to offer in terms of returns and profits to investors. It is stable and not very risky. Therefore, it would be a good investment option for long-term growth.


Hyperdynamics (HDY, Financial): The current trading price for this stock is just above $1 per share. The price for this stock has been fluctuating for the past few weeks. It was seen to rise by almost 4.5% but then fell by approximately 1.5%. It is now being predicted that it could remain constant or even fall. The 52-week trading range for this stock is between $1 and $8 per share. Market capitalization at current price is above $335 million. The recent loss suffered by the company had led to the fall in share prices and had also negatively affected the earnings per share and the price-to-earnings (P/E). Beta for this stock is calculated at 2.37 and the debt to equity is said to be 0. This signifies that there is higher risk associated with this investment but the company is still stable.


The stock is still considered to be a strong buy because there is potential of upside in near future. It is highly responsive to the market and because the market is improving, it will offer higher returns. My analysis of the company's market position suggests that it will be a good option for investors who want higher returns but can manage the relatively higher risk factor.