Goldman's Sacks ( GS ) 10 Best Stock Picks for 2011

(TheStreet) -- Goldman Sachs(GS_) updated its Conviction Buy List, a compilation of the Wall Street bank's favorite U.S. stocks, for 2011. Investors ought to review the following 10 picks, which offer the greatest 2011 upside potential, according to Goldman. Below, the stocks are ordered by return potential, from plenty to most.


Best Stock Ideas - 2011

Credit Suisse's 18 Best Stock Picks for 2011: Part 1Goldman's 10 Best Stock Picks for 2011Jim Cramer's 2011 Dow PicksBarclays' 30 Best Stock Picks for 2011Morningstar's 5-Star Large-Cap Stocks for 2011Morgan Stanley's 8 Best Stock Ideas for 2011Market Activity

Starbucks Corporation
SBUX Hasbro Inc.
HAS Blackstone Group L.P.
BX 10. Digital Realty Trust(DLR_) is a data-center real estate investment trust, or REIT.

Goldman initiated coverage of this sub-industry in December with "favorable outlook" due to cloud-driven demand. It expects data-center REITs to generate the best profit growth among real estate stocks over the next few years. Digital Realty is Goldman's favorite stock in the group due to recent underperformance. Digital Realty missed third-quarter consensus earnings by 0.8% and its stock corrected 4.7%. Still, 65% of Wall Street analysts rate the REIT "buy."





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9. Crown Castle(CCI_) owns, operates and leases wireless communications towers.

Recent lease modifications with carriers, including AT&T(T_), are expected to bolster 2011 revenue. Given the company's history of exceeding rental revenue guidance, Goldman is bullish on the company's growth prospects and is forecasting rental revenue 2% above the top threshold of management's guidance and 77 cents of earnings in 2011. Its $64 target was derived by combining free-cash-flow and discounted-cash-flow analyses, implying 24% upside

8. Chicago Bridge & Iron(CBI_) is an engineering and construction company, focusing on infrastructure projects for oil-and-gas companies.


Goldman views it as a levered oil play. Crude oil is trading above $90 a barrel, currently, and demand is growing amid the global recovery. E&C backlogs are inflecting and Goldman expects investors to start paying higher multiples for stocks in the sector, with Chicago Bridge & Iron offering the most upside. Its stock trades at a forward P/E of 14 and a cash-flow multiple of 15, 34% and 35% peer discounts.





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7. Sapient(SAPE_) is a services company, selling advisory, analytics and consulting services to businesses and government agencies.

It also operates technology outsourcing centers in India. Goldman has a $15.50 price target on the stock, suggesting an impending 12-month return of 27%. The stock returned 47% in 2010 and has delivered annualized gains of 11% since 2007. Sales and net income advanced 16% and 171% a year, on average, over that span. The stock trades at a forward P/E of 24, a 32% industry premium. The company has $187 million of net liquidity (total cash minus debt).

6. Blackstone(BX_) is an alternative-investment company, structured as a publicly-traded partnership, which invests roughly $104 billion, of fee-generating assets, in private equity, real estate and hedge funds.


The firm also has an advisory unit, offering merger and acquisition, restructuring and reorganization assistance. Goldman expects several of Blackstone's funds to surpass so-called high-water marks and to resume charging performance fees in 2011. It thinks funds could attract another $7 billion, to boot. The stock commands a discount forward P/E of 9.8.





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5. Precision Castparts(PCP_) makes metal components and castings, forgings and fasteners for aerospace and industrial companies.

Precision has significant fixed-costs, so incremental volume bolsters profit margins significantly. The company beat Goldman's fiscal second-quarter sales forecast by 3.5%. It expects Precision's stock to advance 28% to $128 within the next 12 months. Precision commands a premium of 93% over its aerospace peers, based on cash flow per share.

Still, 75% of analysts covering Precision rate it "buy" and 15% rank it "hold."

4. Hasbro(HAS_) is a toy maker.


The company's new children-focused television network, The Hub, is demonstrating sequential growth in ratings, with all-day viewership of 34,000. Not only is this venture generating incremental advertising revenue, but offers a venue to market Hasbro's toys and games. Hasbro has grown sales and net income 3.9% and 11%, annually, since 2007. Its stock has risen 23% a year over that span. It trades at a forward P/E of 15, a modest peer discount. Goldman's target, echoed by Sterne, Agee & Leach, suggests a looming 12-month gain of 30% for the stock.





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3. Phillips-Van Heusen(PVH_) makes clothing, including dress shirts, neckwear and shoes, under the Calvin Klein , Izod and Tommy Hilfiger brand names.

An inflationary environment will benefit the company, according to Goldman, which expects $15 million of cost synergies in 2011, resulting from expense leverage on market spending and "sourcing gains from larger scale and category expansion at Macy's(M_)."

Goldman values the stock at $85. Roughly 73% of researchers rank it "buy."

2. Apple(AAPL_) sells consumer electronics.


The company's stock returned 53% in 2010, topping the large-cap tech category. Apple is a consensus pick for 2011. Of analysts covering Apple, 48, or 91%, advocate purchasing its shares and five recommend holding. None say to sell. Piper Jaffray has the highest price target, expecting a gain of 36% to $438. Goldman believes, contrary to some analysts, that the gross margin has bottomed and could climb in the near-term. Its $430 target is equivalent to 20-times its 2011 earnings per share estimate of $21.46.




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1. Starbucks(SBUX_) is Goldman's favorite pick within a restaurant industry that it believes has "the best supply/demand dynamics in 25 years."

The number of U.S. restaurants has fallen to 1986 levels, following recession closings. According to Goldman, Starbucks is due to return 36% in 2011 on multiple expansion and steady earnings growth.

The bank thinks the Street is underestimating same-store sales growth for the coffee chain, forecasting a 7% to 8% uptick in 2011. Emerging market expansion will add fuel to the fire.
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Will WORLD FOREX: Euro Gains Vs Dollar; Focus Is On Stress Tests Work ? NYSE- HAS,AAPL,WFC,DAL,GOOG,C,F,CPTC,GE,VALE,V,KO

(Dow Jones)--The euro rose against the dollar Monday as investors anticipated that stress tests of European banks would allay concerns about the region's banking sector.




The euro managed to gain in spite of a downgrade of Ireland's credit rating Monday and the breakdown in funding talks between Hungary and the International Monetary Fund over the weekend. A disappointing U.S. housing-market index also helped the common currency to gain against the dollar.



Initial results from the stress tests, due Friday, are the most important of this week's economic releases, said Jessica Hoversen, fixed-income and foreign-exchange analyst at MF Global in Chicago.



Some fears about euro-zone banks have been mitigated in recent weeks, but "the ability of the stress tests to soothe investor concerns will rely on the robustness of the tests," she said.



Monday shortly before noon, the euro was at $1.2971 from $1.2927 late Friday, according to EBS via CQG. The dollar was at Y86.67 from Y86.61, while the euro was at Y112.43 from Y111.95. The U.K. pound was at $1.5227 from $1.5298. The dollar was at CHF1.0513 from CHF1.0519.



The ICE Dollar index, which tracks the dollar against a trade-weighted basket of currencies, was at 82.452 from 82.535.



The dollar ticked down against the euro and yen after the National Association of Home Builders housing-market index fell to 14 in July, its lowest reading since April 2009, showing that U.S. housing activity continued to decline after the expiry of a home buyers' tax credit. Economists had expected a reading of 16.



Concerns over the U.S. economy have dominated currency markets recently. A string of disappointing U.S. data releases fueled fears that the U.S. recovery is faltering and sent the U.S. currency to a seven-month low against the yen and a two-month low against the euro late last week.



However, anticipation over stress tests is now dominating trading, said Simon Smollet, senior foreign-exchange options strategist at Credit Agricole CIB in London.

Hasbro (NYSE:HAS) second-quarter profit climbed to $43.6 million, or 29 cents a share, from $39.3 million, or 26 cents a share, as declining costs more than offset a 7% slide in revenue to $737.8 million. The toy maker said the fall in revenue came after last year’s initial movie product ship-ins from the Transformers and G.I. Joe movies. The company still expects EPS and revenue to rise in 2010. Analysts had expected earnings of 25 cents a share. –MarketWatch




The dollar fell the most against the euro in 14 months and dropped to the lowest level this year versus the yen as economic reports added to evidence that the U.S. recovery is losing momentum. The greenback touched a level weaker than $1.30 versus the shared currency as minutes of the Federal Reserve meeting last month indicated policy makers trimmed their forecasts for growth. The euro rallied for a third straight week against the dollar before partial results of stress tests on the region’s banking system due on July 23. “It’s really dollar weakness based on some evidence the economy is slowing,” said Vassili Serebriakov, a currency strategist at Wells Fargo (NYSE:WFC) in New York. “The economic indicators are pointing strongly toward slower growth in the second half of the year.” –Bloomberg



Google (NASDAQ:GOOG) will stop selling its Nexus One smartphone after some dismal sales figures. The company announced on July 16 that it received its final order from the phone’s manufacturer HTC, Read Write Web reported. In the time it took Apple (NASDAQ:AAPL) to sell 1,000,000 iPhones, Google racked up a mere 135,000 Nexus One sales. –Daily Finance



Delta Air Lines (NYSE:DAL) swung to a second-quarter profit, topping analysts’ expectations, on a strong rebound for a key revenue gauge. The industry expects to see profits return for the latest quarter as monthly performance numbers have taken off, though fuel costs have been climbing. Business travelers and consumers are returning to the skies amid an improved economy, following a recession that weighed heavily on airlines’ results. Delta’s report is the first from the major U.S. carriers. For the period, Delta reported earnings of $467 million, or 55 cents a share, compared with a year-earlier loss of $257 million, or 31 cents a share. The latest quarter included 10 cents in charges from items such as merger costs and aircraft retirements. Revenue rose 17% to $8.17 billion. Analysts polled by Thomson Reuters most recently expected earnings of 63 cents a share on $8.25 billion in revenue. –The Wall Street Journal




The Committee of European Banking Supervisors is testing 91 banks to see whether the banks can withstand a three-percentage-point decline in gross domestic production from European Commission forecasts for 2010 and 2011. The committee will also test for resilience to sovereign risk at a level beyond the market conditions experienced in early May.



"I think people are still optimistic," said Smollet. "Banks will need extra capital, but hopefully the capital will be a reasonable amount that the market can provide."



That optimism helped the common currency to gain, even though Moody's Investors Service downgraded Ireland's credit rating, citing a rising debt burden, the high cost of rebuilding the country's banking system and sluggish growth as factors in the decision. The agency cut the rating from Aa2 from Aa1, with a stable outlook, indicating it isn't likely to consider a further downgrade soon.



"It registered with everyone as being a reasonable rating" and was probably already priced into the euro, said Smollet.



The other big news out of Europe was the dissolution of talks between the IMF and Hungary over that country's access to the remainder of its existing EUR20 billion standby credit line.



The euro shot almost 3% higher against the forint at the start of European trading hours to reach just over HUF290, taking the forint back down to its lowest levels in more than a year after negotiators for the IMF and European Union walked away from talks because Hungary hadn't delivered on required austerity measures.



The breakdown in talks between Hungary and the multilateral bodies has implications beyond Eastern Europe, as it offers a clear sign that international aid is tied to strict conditions.



-By F. McInni

Hot stocks to buy in April

Corporate spending on information technology already has begun to rebound, suggesting to some analysts that the tech sector is poised to outpace the rest of the economy this year. Wal-Mart (WMT, news, msgs) recently awarded multi-year application-development contracts to Infosys Technologies (INFY, news, msgs) and Cognizant Technology Solutions (CTSH, news, msgs).

And recent growth forecasts from companies such as Autodesk (ADSK, news, msgs) indicate that software demand is picking up as businesses make purchases that were deferred during the downturn. Overall, tech spending is projected to rise 8% in 2010, according to Forrester Research, after a 1% decline last year.

One of Markman's strategies involves investing an equal amount of money in each of the stocks in the computer-generated portfolio at the start of the month, selling them at the end of the month, then beginning the process again the next month. For investors who prefer to handle fewer stocks, Markman recommends using the strategy with the top 10 stocks on the list.

An investor who followed Markman's 10-stock strategy since it was launched would have realized a gain of 454% through Dec. 31, according to Gradient Analytics, and had an annual average return of 22.4%. Over the same period, the Standard & Poor's 500 Index ($INX) was down 7.9%.
This score is combined with each company's StockScouter rating to come up with the list in the above chart. Only stocks with a final closing price above $3 are eligible for the list
The chart below represents the benchmark StockScouter portfolio for April
Apple (AAPL, news, msgs)
Digital media, computers
$235.00
10

Balchem (BCPC, news, msgs)
Specialty ingredients
$24.65
10

Donaldson (DCI, news, msgs)
Industrial equipment
$45.12
10

Citrix Systems (CTXS, news, msgs)
Information technology
$47.47
10

Cognizant Technology (CTSH, news, msgs)
IT consulting and services
$50.98
10

Family Dollar Stores (FDO, news, msgs)
Discount stores
$36.61
10

Lubrizol (LZ, news, msgs)
Engine oil additives
$91.72
10

Qualcomm (QCOM, news, msgs)
Wireless communications
$41.96
9

Healthcare Realty Trust (HR, news, msgs)
Outpatient health care
$23.29
10

Rayonier (RYN, news, msgs)
Forest products
$45.43
10

New York Community Bancorp (NYB, news, msgs)
Savings and loan
$16.54
10

Home BancShares (HOMB, news, msgs)
Banking
$26.44
10

Strayer Education (STRA, news, msgs)
Online education
$243.52
10

Valeant Pharmaceuticals International (VRX, news, msgs)
Pharmaceuticals
$42.91
10

Union Pacific (UNP, news, msgs)
Railroads
$73.30
10

Infosys Technologies (INFY, news, msgs)
Technology services
$58.81
10

Credicorp (BAP, news, msgs)
Financial services
$88.18
10

Hasbro (HAS, news, msgs)
Toys and games
$38.28
10

Electronic Arts (ERTS, news, msgs)
Video games
$18.66
10

Compuware (CPWR, news, msgs)
Computer software
$8.40
10

City Holding (CHCO, news, msgs)
Banking
$34.29
10

Cardinal Health (CAH, news, msgs)
Medical products
$36.03
10

Accelrys (ACCL, news, msgs)
Business software
$6.16
9

Alliance Resource Partners (ARLP, news, msgs)
Coal
$41.91
10

Novellus Systems (NVLS, news, msgs)
Semiconductor equipment
$24.99
10

Old Republic International (ORI, news, msgs)
Insurance
$12.68
10

EV Energy Partners (EVEP, news, msgs)
Oil and natural gas
$31.92
10

Investors Bancorp (ISBC, news, msgs)
Banking
$13.20
10

Scripps Networks Interactive (SNI, news, msgs)
Cable television
$44.35
10

TICC Capital (TICC, news, msgs)
Investments
$6.59
10

Encore Energy Partners (ENP, news, msgs)
Oil and natural gas
$19.95
10

Rent-A-Center (RCII, news, msgs)
Rentals
$23.65
10

Radware (RDWR, news, msgs)
Networking devices
$22.08
NA

Jack in the Box (JACK, news, msgs)
Fast food
$23.55
NA

Banco Santander (SAN, news, msgs)
Financial services
$68.22
10

Lancaster Colony (LANC, news, msgs)
Specialty foods
$58.96
10

Benchmark Electronics (BHE, news, msgs)
Printed circuit boards
$20.74
9

Greenlight Capital Re (GLRE, news, msgs)
Reinsurance
$26.68
10

IntercontinentalExchange (ICE, news, msgs)
Online marketplace
$112.18
10

Pactiv (PTV, news, msgs)
Packaging
$25.18
10

F5 Networks (FFIV, news, msgs)
Networking services
$61.63
10

Autodesk (ADSK, news, msgs)
Computer-aided design
$29.38
10

Albemarle (ALB, news, msgs)
Specialty chemicals
$42.63
10

Big Lots (BIG, news, msgs)
Discount retail
$36.22
10

Nationwide Health Properties (NHP, news, msgs)
Health care facilities
$35.15
10

VeriSign (VRSN, news, msgs)
Internet infrastructure
$26.02
9

Teledyne Technologies (TDY, news, msgs)
Electronic instruments
$41.27
10

Waste Services (WSII, news, msgs)
Solid waste
$9.89
10

Lam Research (LRCX, news, msgs)
Semiconductor equipment
$37.32
10

Eaton Vance (EV, news, msgs)
Asset management
$33.54
10

Best Top Long Or Short Term Stock Pick For Day Traders & Investors

(Has) 23.80 a share as of 2/14 Target Price 40.00 a share

Hasbro, Inc. is engaged in providing children’s and family leisure time and entertainment products and services, including the design, manufacture and marketing of games and toys. The Company’s offerings include a variety of games, including traditional board, card, handheld electronic, trading card, role playing, plug and play, and digital versatile disc games, as well as electronic learning aids and puzzles. Toy offerings include boys’ action figures, vehicles and play sets, girls’ toys, electronic toys, plush products, pre-school toys and infant products, children’s consumer electronics, electronic interactive products, creative play and toy-related specialty products. The Company’s core brands include PLAYSKOOL, TRANSFORMERS,G.I. Joe, MY LITTLE PONY, LITTLEST PET SHOP, TONKA, SUPER SOAKER, MILTON BRADLEY, PARKER BROTHERS, TIGER and WIZARDS OF THE COAST.

EA has announced that development is underway to bring Hasbro's legendary G.I. JOE brand to Wii and DS in summer 2009 to coincide with the theatrical release of the G.I. JOE: THE RISE OF COBRA live-action movie from Paramount Pictures and Spyglass Entertainment, in association with Hasbro, which opens in US cinemas on 7th August, 2009. EA will unveil a "first look" of the G.I. JOE video game at Hasbro's Showroom at Toy Fair on February 15-17, 2009 in New York City.They have the right mix of popular names right now. Marvel and Transformers.Hasbro has enough classic board game titles to continue to do well. What better way to pass time during a recession that gathered around the dinning room table playing a family board game?Many of the games and toys Hasbro manufactures and markets are far beyond recognizable brands, they're iconic. Games like Battleship, Candy Land, Risk, and Twister? I think kids will continue to play these games simply because their parents did. Their parents can "get" all of these because they had them when they were kids. Hasbro will continue to develop new and exciting toys, but I think these old classics will always form a core for their business. A good long play.Very well positioned in terms of rights to characters and franchises. Walk down the isles of Target or Wal-Mart and most of the toys are made by this firm. With the glut of superhero movies driving demand in youth for their products, and lot of them, I see HAS in a good position.Good financials and great business model.So buy up some shares and mak some mad money !