2013 Stock Picks: 5 Must-Have Stocks for Your Portfolio
Each New Year brings with it resolutions, hopes, and dreams. We all promise ourselves to do more, be better, and change the world. Unfortunately, most of these resolutions, hopes, and dreams die by the first month, if not the first week. However, if you are in the minority and your ambition endures through January, here are some stocks that may help you turn things around in 2013, at least financially speaking.
1) Phillips 66 Company (PSX)
Engaged primarily in producing natural gas liquids and petrochemicals, Phillips 66 is a holding company. To start, Phillips 66 has a solid price-to-earnings ratio, 6.02, and generates decent “interest” with a 1.94% dividend yield. In its first full year being publicly traded, PSX nearly doubled.
Regarding its 2013 outlook, Phillips 66 recently signed a substantial long-term contract with Global Partners, which has an estimated EBITDA (earnings before interest, tax, deducations, and amortization) guide of $175 to $190 million. Paralleling that, Phillips 66 plans on increasing its 2013 capital, in part through the IPO of a newly-created master limited partnership (MLP).
2) Intel Corporation (INTC)
With technology being a top-rated sector for 2013, INTC has enticing potential. It is a leading semiconductor company that largely focuses on manufacturing microprocessors. Admittedly, INTC experienced a rough 2012, but has been on the rise the last 2 months. Intel currently is making a mobile technology push, specifically in the development of their new atom chips.
Intel’s numbers are solid as well. In addition to its 4.27% dividend, Trefis values the stock at $33 per share. With a solid balance sheet and over $10 billion in cash and short-term investments, it has sufficient capital to fund R&D, facilitate growth, and more in 2013.
3) Northern Tier Energy LP (NTI)
Also in the energy sector, Northern Tier Energy has refining, retail, and pipeline operations. NTI is a young stock, only going public this past summer, with a lot of potential. For starters, they offer investors an astronomical “interest rate” with a 35.13% dividend yield. Although displaying a little volatility, it is not nearly what one would expect for such a high dividend.
The recent resignation of their CEO and their overall youth (Northern Tier Energy was founded in December 2010) scare off some investors; however, I believe it is unwarranted. Thomson Reuters rates the stock highly, giving it a composite score of 10 out of 10. After more than doubling since its summer 2012 IPO, I believe NTI is poised for a profitable 2013.
4) Illumina Inc. (ILMN)
Illumina Inc. develops and manufactures tools/systems that deal with the analysis of genetic variation and function. It made headlines many times throughout 2012, being the focus of attempted takeovers. After rejecting Roche Holding AG (ROG.VX) offer for the company, Illumina went in another direction. Illumina bought out BlueGnome back in September, as part of an effort to become the leading company in their field. More recently, they acquired Verinata Health Inc., directly preceding the announcement of a new Sequencing Technology. These moves leave many investors enticed with Illumina’s long-term prospects. Despite taking a hit last week, ILMN steadily rose over the last 6 months.
With rumors that Roche still is interested in buying the company (despite denial from Roche Chairman, Franz Humer) and its recent acquisitions and moves, Illumina could prove to be a profitable long-term buy in 2013; however, the moves also create some short-term risk, while investors wait to see how Illumina’s investments pan out.
5) HollyFrontier Corporation (HFC)
HollyFrontier refines petroleum, which then produces products such as gasoline, diesel fuel, jet fuel, special lubricants, and more. HollyFrontier had a gangbuster 2012, nearly doubling its stock price, and is expected to replicate its success in 2013. Goldman Sachs listed it as a Conviction Buy and set its 12-month price target at $69, and many others assess it similarly.
HollyFrontier also plans on expanding its operation with new pipelines in 2013. Its outlook is complemented nicely by a 5.69 price to earnings ratio and an ancillary 1.84% dividend yield.