Three Stocks to Buy in Next Year’s Most Promising Sectors
Posted on December 27, 2012 at 10:40 AM EST
Whatever 2013 brings for the markets, there will be plenty of quality stocks to buy - if you know where to look. Overall, the markets are expected to have another positive year. A survey of 10 top financial strategists by Barron's projects the Standard & Poor's 500 will close at 1,562 in 2013, a 10% gain from current levels. (By the way, last year's picks outpaced the broader index by 6%.) That would follow modest gains in 2012 of 13.5% for the S&P 500 and 8% for the Dow Jones Industrial Average . For next year, Wall Street's top guns predict certain sectors of the market - technology, industrials, and energy - will lead the charge higher. Companies in more defensive sectors like consumer staples, telecoms, and utilities, will be laggards. So let's take a closer look at three stocks to buy from among these favored sectors that should be an excellent place for your money in 2013. Stocks to Buy in 2013: Cheap Tech Tech stocks are hugely profitable and as a group currently carry a forward P/E ratio of about 11. That's cheap versus historical levels. Tech is also a bellwether for when companies start to invest capital. "When we get an upturn in capital expenditures, it will show up in tech first," Barclays' Barry Knapp told Barron's . One stock to buy that has a rock solid balance sheet and a mountain of cash is Cisco Systems Inc . (Nasdaq: CSCO ). Once the world's most valuable company with a market cap of $500 billion, Cisco's shares sank sharply when the tech bubble burst in 2000. And the stock is still dirt cheap, trading around $20 a share, roughly 10 times next year's earnings. Plus, the company is sitting on more than $48 billion in cash, worth about $9 a share. With a dominant market share of 60%, CSCO is the de facto choice in the switching market. To continue reading, please click here...
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