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Published: January 14, 2010
It's become an annual tradition among the
research staff of
Market Advisor -- StreetAuthority's longest-running
publication.
Every December, through phone calls, emails, and meetings --
heck, everything short of smoke signals -- the office is abuzz
with chatter.
You see, December is when we hammer out our "Top Ten Stocks" for
the coming year. This is our chance to put our collective heads
together to pinpoint the ten stocks -- no more, no less -- that
we believe will be the best investments for the coming year.
 When you put your neck on the line with only a handful of picks
-- which our
Market Advisor subscribers can track throughout the year
-- you better be right. If you're not, your performance is there
for everyone to see.
Fortunately, our picks haven't disappointed. And you couldn't be
happier if you're a subscriber.
Last
year we were able to outperform one of the strongest
bull markets of the past decade. While the S&P 500
returned +26.5%, our "Top Ten Stocks" cleared that
hurdle, delivering +36.7% for subscribers.
Our picks included Mexican airport operator Grupo
Aeroportuario del Pacifico (NYSE: PAC), which
returned +45.8%... gold
ETF Market Vectors Gold Miners (NYSE: GDX),
which saw +36.7% returns... and Brazilian electric
utility CPFL Energia (NYSE: CPL), which returned
+72.1%.
But this wasn't some flash in the pan thanks to the bull
market. Since we've started publishing our annual "Top
Ten Stocks" report in 2003, our picks have given readers
a compounded return of +96.6% through 2009. That
compares to just +41.3% for the S&P 500. |
With this performance in mind, I wanted to
share a little tidbit with you -- a "sneak preview" if you will.
I've selected one my favorite picks from the
2010 edition of "Top-Ten Stocks" to share with you.
The Silver Stock Set to Soar
You've probably heard a lot of talk about gold lately -- and for
good reason. Gold is an indisputably reliable
hedge against economic uncertainty. And given the unsteady
dollar and ripe conditions for runaway inflation, it's no
surprise that spot prices have ascended.
But you may be surprised to know that silver has actually
climbed almost twice the rate of its yellow sibling. Yet, silver
can still be had for just 1/60th the price of gold, a ratio well
beyond historical norms.
My staff and I are confident that silver prices could easily
rally another +50%. Aside from shielding investors from
inflation, silver is also prized for its electrical and thermal
conductivity and other unique properties. With commercial
applications ranging from photography to medicine, industrial
usage eats up approximately 60% of the world's supply each year.
Until recently, the industrial pool of demand has been playing
tug-of-war with the inflation/falling dollar crowd. With
economic growth back on track, these buyers will now work
together to pull prices higher. Current estimates suggest there
are only about one billion ounces of silver above ground.
Sovereign wealth funds from wealthy Gulf States like Dubai are
buying up much of that.
None of this has gone unnoticed by retail investors.
According to the U.S. Mint, the public scooped up 16.1 million
American Eagle one-ounce silver coins in the first half of 2009,
a sharp increase of +75% over the previous year. But you can do
much better than bullion...
As the world's largest silver streaming company, Silver
Wheaton (NYSE: SLW) buys future silver production from gold
miners for relatively fixed prices, often below $4 an ounce.
These deals are a win-win for both parties: The mine owners get
upfront cash for what they consider to be a byproduct, while
Silver Wheaton gets mounds of silver without having to shell out
a penny for mine exploration or maintenance.
Management recently locked up an agreement that will hand over
25% of whatever silver is dug up from Goldcorp's (NYSE: GG)
Penasquito mine in Mexico. That deal alone is expected to yield
7.2 million ounces of silver annually for the next 22 years. The
firm has 16 other agreements in place that will generate 17
million ounces of silver this year and as much as 40 million by
2013.
That increased production could send sales soaring +135% within
the next four years without any increase in silver prices. Keep
in mind, the company has minimal future capital expenditures, so
any incremental sales growth will be converted into earnings.
Last quarter, sales of just 4.3 million ounces resulted in a
record-shattering cash flow of $45 million, a +70%
year-over-year increase. The combination of new deals and
buoyant silver could send that total soaring over the next
couple years. And I expect the share price to follow suit.
Good Investing!
-- Nathan Slaughter
Editor
StreetAuthority Market Advisor
The ETF Authority
Half-Priced Stocks
P.S. -- A little-known company that benefits with every iPhone
sold... a stock poised to gain on the back of Washington's
landmark healthcare legislation...a fund ready to rise if
inflation heats up or the dollar keeps falling...
The picks and more make up the rest of Market Advisor's
"Top Ten Stocks for 2010."
Visit this link to read more about these picks and see just
why we're so bullish on their prospects for 2010. |
