For the last several years, Sabrient Systems, an investment research firm in Santa Barbara, Calif., has offered a “Baker’s Dozen” list of 13 top-ranked stocks for the year ahead. The selection is based on quantitative screens as well as a qualitative review, including a forensic accounting analysis of a company’s earnings.
The Baker’s Dozen picks for 2012 are up an average 45 percent compared with the 15 percent climb in the Standard & Poor’s 500 index. The biggest winners more than doubled: Ocwen Financial (OCN) is up 144 percent and Western Refining (WNR) is up 131 percent. Just one stock in the group has lost money. Kronos Worldwide (KRO), a maker of titanium chemical products, is down 7 percent.
“Regardless of global political and military turmoil, there are always undervalued companies that will do quite well,” says David Brown, chief market strategist at Sabrient Systems.
Brown shared a sneek peek at his list for 2013 which will come out in early January. Among the Bakers Dozen? The private equity firm KKR & Co. (KKR).
“We believe it’s going to be a year of significant corporate transactions (mergers & acquisitions, etc.) for which a company would hire an investment banker like KKR,” he says. Other key factors: KKR has more than $5 a share in cash and $3.5 billion a year in operating cash flow.Associated Press
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