Wednesday, December 26, 2007

Stock Outlook 2008

As another year comes to close, we can't just sit back and rest on our gains from the year that was 2007. Sure, Evergreen Solar (eslr), Ormat Technologies (ora), Yum Brands (yum) and the almighty Google (goog) were all great plays for this past year, but you have to ask yourself, what is next? What will be the best bull markets of 2008?

I believe 2008 will be the another year of the green! Alternative energy and any pollution reduction company will reign supreme as the governments around the world, (maybe even ours here in the states) begin to make these pressing issues a priority. It seems like you can't turn around these days and not hear something about climate change, pollution and expensive dirty energy. Stocks like Zoltec (zolt), which is one of the leaders in producing carbon fibers used in Wind Turbines, and Evergreen Solar (eslr) are going to continue their run in 2008 as more and more investors realize the explosive growth these industries can provide. With oil prices continuing to climb, manufacturing cost dropping due to government subsidies and a general increase in demand, the whole sector should do well. Solar, Geothermal, and wind power are the future, and now is your chance to make some green off of these clean renewable energy companies.

The next year will also be another year to watch China continue to expand at a insane pace. While I am not too fond of Chinese stocks, I think that Yum Brands is a way to get great Chinese exposure without investing in Communism. Kentucky Fried Chicken is opening up a store a day in China, and will only benefit even more with the buzz and increased traffic from the coming Olympics. There is a lot of opportunity in the Chinese market, but I just have something against a country that censors it's own news and internet. Enter at your own risk...

Two picks that have turned a bit soar since I recommended them, Boeing(ba) and Royal Bank Of Canada(ry), I still believe will do well in 2008. Sure, these are two of the less exciting stock picks out there , but that doesn't mean there not worth owning over the long term. Boeing has orders lined up for years to come with countries around the world, and Royal Bank Of Canada was brought down somewhat unfairly by the downfall in US banks. They both pay a dividend, BA at 1.78% and RY at 3.98% yields. Not only that, but both companies just raised their dividend in their last quarter, which shows the confidence the management has in their future income.

My last two are Vacso Data Securities (Vdsi) and Google, no real surprise there, I have been behind these two for literally years now, and I think they will continue to vastly outperform the market. Vasco is still looking cheap here after it's big fall, and Google will dominate in 08 with it's mobile business, the ever-growing monster that is Internet and those other 100 projects they are working on.

So, am I still worried about subprime, a weak dollar, a possible recession and falling home prices? Well of course, but these stocks are all long term investments, and can be bought over time and many different prices just like any other stock out there. Just remember, never buy all at once, and always do the proper research before you ever buy a stock. It also helps if you really are interested in what the company itself that you are putting your hard earned money into, this can make the research much less tedious.

Happy investing in 2008 from all of us at Stock Picky!

For more information on any of the companies above just click the company's name in the above article.


  1. Interesting blog. And your portfolio seems very strong. I especially like Vasco. It seems you found this company early. How did you do it?

    Also, I'm wondering why you chose CECE? I agree that this sector should see great returns over the next decade. But why this particular company?


  2. Well first of all in both cases I liked the industries first... Online banking seemed like it was the next big thing. I liked Vasco because they had a small float, got a lot of their money from Europe and Asia, not the United States (yet)!

    They also had unbelievable revenue growth even back then... Just go back and look at their numbers, it is really quite impressive.

    As for CECE they also have a small float which can lead to big returns. What I really liked about them is the fact that they had just paid of all of their long term debt which leaves them in a position of strength to spend more on R & D or acquistions, or whatever else they would need money for. Also they have a few big customers and it seems that they are poised to get a few more.... with a smaller company like this a few more is a big deal!

    You can read my article on CECE here...

    Or my VDSI article here...

    There is of course a few other reasons too, but I hope this answers your questions in part... If you have any other questions feel free to ask.

  3. Thanks for the reply. I had already read your analysis of CECE. In fact, I read your entire site, as I think it's very informative. Hope you continue to post regularly, as I will bookmark your site and try to add my own comments to your posts if I believe I can add some value.

    By the way, do you believe Vasco can keep growing at such a strong pace? The CEO seems very capable, obviously. And I like their partner selling model, which can greatly increase sales with little additional costs. However, this is the typical software sales model in Europe (partner driven), where they are already successful and growing. It's not, typically, the model in the US. I work for a software company. We do 90% sales through partners in Europe, but only about 40% with partners in the US.

    Regards, and all the best in 2008!

  4. I do believe that Vasco can continue to grow. Everyday, phishing and security for online banking becomes even more important as more and more transactions are completed on the net.

    They signed up with Royal Bank Of Canada (another of my favorites) not too long ago which should help them further penetrate the North American market. They also opened up a office in Tokyo and Brazil which should also help expand their presents...

    Don't forget they also signed a deal with Azlan Data Tech which gives them exposure in the middle east as well. I would say thing will continue to look rosey at Vasco for quite so time.

    Hope this helps a bit...