Stocks 2010
What are some great stocks to invest in for good returns in a year or so?
I am with Share Builder and have MSFT, GSI, AIRN,GRZ, AEGR. Are these great stocks? What is a great small cap, etc stock to invest in? Will the market go up in 2010? Etc?
If you can tell me if the stock market will be up or down in a year, I’ll tell you what to invest in. I view “investing” as at least a 3-year horizon.
I can’t find much fault in MSFT. They have loads of cash and a conservative growth strategy. They are and old-school (REALLY old) bank stock.
GRZ seems to be some kind of gold stock – I’m personally quite bearish on the shiny yellow metal. When I fear inflation, I’ll go with the shiny black liquid instead.
GSI is an interesting case. Seems to be a Chinese steel play. China + infrastructure seems like a good long term play to me (if they can increase their middle class). However, one thing bothers me about the stock. If you look at their balance sheet, their total Current Liabilities has been *double* their Current Assets for at least the last four quarters. This doesn’t make any sense. It would be like someone earning $3000/month and paying $6000. They have a half-billion dollars worth of Plants and Equipment, but that is only good for collateral. In the above example, this is similar to someone owning a paid-for house – it still doesn’t explain the odd cash flow..
The only way that they can do that is if they keep rolling over their short-term debt. However, this creates two big risks: 1) short term interest rates rise and/or 2) credit gets tighter. Either could put a big crimp in their operations. The logical thing to do (to me at least) seems to be to lock-in the low interest rates and convert some of their short-term debt into long-term (possibly by taking equity out of their Plants). I personally wouldn’t invest in this company unless I knew why they weren’t doing that. The most logical explanation is that they can’t get long-term financing at a good rate, which tells you a lot about the company (if that were the case).
Trading Analysis – Stocks to watch in 2010