By Jeff Reeves
(MarketWatch) — If December was any indication, Wall Street is on track for a great year in 2011.
While there are indeed glimmers of a recovery, many areas of the economy are still hurting. Housing continues to bounce along the bottom and risks slumping further under the weight of continued foreclosures and rising interest rates. And though health care is allegedly recession-proof, that hasn’t stopped big pharma from lagging the market considerably — with major drugmakers Eli Lilly & Co. (NYSELY) , Merck & Co. (NYSE:MRK) , Pfizer Inc. (NYSEFE) , and GlaxoSmithKline PLC (NYSE:GSK) all in the red as of this writing.
So if you had just one pick for 2011, one single stock to buy now and sell 365 days later, what would you pick? That’s exactly the question I put to 10 of Wall Street’s sharpest minds — well, nine and then my own — and I wasn’t surprised to find a common theme. Namely, that the biggest potential lies in tech and financials.
Want specifics? Then here they are: The 10 top stock picks for 2011 according to 10 different Wall Street experts.
Our 10 favorite stocks for 2011
Which stocks might reward investors most in 2011? Barron's identifies 10 big-caps worth buying now.
Bank of America Corp. (NYSE:BAC) : This pick is mine, and my motivation is two simple points: I believe 2011 will be better than 2010, even if it’s not I think it’s hard things could get worse for Bank of America. I expect less government meddling as financials stand on their own again, more frequent lending to better qualified applicants and a lift from overall economic recovery. For what it’s worth, the analyst community agrees with me. According to Thomson/First Call, the low target on BAC is $13 (about where the stock is now) and the high is $26, with an average of $18. (Disclosure: I put my money where my mouth is and bought BAC $13.30 a share on Dec. 30.) Read Reeves’s complete recommendation of Bank of America on InvestorPlace.com.
CNOOC Ltd. (NYSE:CEO) : As a Chinese national, Asia expert Robert Hsu knows a thing or two about the demographics of this emerging market. And in his mind, the prospect of booming energy demand in the region coupled with commodity inflation makes CNOOC the best stock to buy in 2011. Crude oil has already shown signs of a steady upward climb in recent weeks, up about 12% from its November lows, and this trend could really pay off for energy stocks like CEO if it continues in 2011. Read Hsu’s complete recommendation of CNOOC on InvestorPlace.com.
Cognizant Technology Solutions (NASDAQ:CTSH) : Regular MarketWatch columnist and investment expert Jon Markman is focusing on tech in 2011, with his top pick being an IT powerhouse. According to Markman, as competitors in every sector set aggressive growth plans or cost cutting measures to keep an earnings edge, one resource all corporations will need is an efficient data and networking system. That’s Cognizant’s specialty. Revenue at this IT services giant is up 20% in the past 10 years, and the prospect of a recovery could mean even bigger growth for CTSH in 2011. Read Markman’s complete recommendation of Cognizant on InvestorPlace.com.
Evercore Partners Inc. (NYSE:EVR) : Hilary Kramer has dedicated an entire newsletter to what she calls “game changer” stocks, picks that redefine an industry or ride a fundamental shift in the economy to big profits. That’s Evercore in spades, according to Kramer. After a 2010 that saw cash-rich companies test the waters again in the M&A arena, Hilary is predicting a big year of buyouts that reshape Wall Street — and subsequently, huge commissions for capital markets powerhouse and merger advisor Evercore. Read Kramer’s complete recommendation of Evercore on InvestorPlace.com.
Microsoft Corp. (NASDAQ:MSFT) : James Altucher, a renowned financial journalist and author of “Trade Like Warren Buffett,” is banking on this tech giant in 2011. Why? There are a host of reasons — Microsoft is flush with cash, buying back stock and has a P/E of about 8 when you back out the cash. To top it all off, MSFT is seeing booming sales from the Kinect and has a lot of potential when it comes to Windows sales in emerging markets. Read Altucher’s complete recommendation of Microsoft on InvestorPlace.com.
Mindspeed Technologies Inc. (NASDAQ:MSPD) : Bargain stock picker Nancy Zambell is another big believer in technology stocks in 2011. That’s why she’s picking this fabless semiconductor stock — since it profits from chips used in a variety of consumer and corporate electronics. According to Zambell, North American semiconductor sales were up 148% year-over-year in the third quarter of 2010, and up 22% from this year’s second quarter. That sets the stage for a great 2011 for Mindspeed. Read Zambell’s complete recommendation of Mindspeed on InvestorPlace.com.
Otelco Inc. (NASDAQ:OTT) : Never heard of this regional telecom? That’s one of the reasons economist and income investor Neil George likes OTT stock in 2011. This quiet Alabama company has consistently growing revenue, fiscal discipline and a 9% dividend yield — focusing on getting the job done. Like most well-run local phone and internet providers, Otelco isn’t flashy — what sets its apart is the company’s high efficiency and profitablity. Read George’s complete recommendation of Otelco on InvestorPlace.com.
Visa Inc. (NYSE:V) : Financial analyst Charles Sizemore is big on Visa in the new year — but unlike other financial-related picks on this list, the stock’s strength comes from its rather mundane business of data processing. You see, this Visa is an ATM and debit card behemoth — not a lender or credit card loan servicer. It gets paid for each swipe of a card bearing a Visa logo. As emerging markets continue to move away from hard currency and the U.S. and Europe go virtually cashless, there will be even more swipes (and profits) in 2011. Read Sizemore’s complete recommendation of Visa on InvestorPlace.com.
Zalicus Inc. (NASDAQ:ZLCS) : Michael Murphy has made a career out of bold biotech picks that explode — and out of all the publicly traded stocks, at under $2 shares of Zalicus are at the top of Murphy’s list. He warns that you may have to wait for the second half of the year for most of the gains, but contends Zalicus is what some call an oxymoron: A low-risk development-stage biotech. At least, that’s what he’s is hoping for. If the company’s flagship medication Exalgo never pans out, there could be some serious downside. On the other hand, if ZLCS performs as expected or sees a buyout, than this could be just the latest in Murphy’s long line of successful biotech picks. Read Murphy’s complete recommendation of Zalicus at InvestorPlace.com.
Zions Bancorp (NASDAQ:ZION) : If you believe the Buffett-ism about buying when everyone else is selling, you’ll find no better stock to test this theory than ZION. Anthony Mirhaydari, editor of The Edge investment newsletter, has his sights set on this regional financial that is at the epicenter of the housing collapse in Nevada, Arizona and California. Even a modest recovery on the foreclosure front could send this financial pick soaring. Read Mirhaydari’s complete recommendation of Zions at InvestorPlace.com.
Just to be clear, this is not meant to be a balanced portfolio. Each pick was given as the single best investment if each of these advisors could make only one purchase for all of the next year.
But even if some of these individual picks flop, the collective message is clear: The biggest area of opportunity in 2011 lies in tech and finance.
At least, according to the “experts.”
Jeff Reeves is editor of InvestorPlace.com. As previously noted, Jeff has a personal position in BAC. You can get regular updates across the 2011 for all 10 of the picks named in this article via InvestorPlace.com’s Best Stocks for 2011 buy list page.
LY) , Merck & Co. (NYSE:MRK) , Pfizer Inc. (NYSE
FE) , and GlaxoSmithKline PLC (NYSE:GSK) all in the red as of this writing.