Mayor’s Picks - November 2007

The market has been blasted the past few weeks on bad news from banks and the housing market. Investors don’t know how this will affect future earnings and are assuming a pinch in spending this holiday season will result in slower growth moving into 2008. While all of these things may be true a decline in the market means great opportunities for savvy investors. Maybe you’ve been watching a stock for a while waiting for the right moment. Or it’s been too expensive to hop in. Now is a great time.

A number of the stocks I have been recommending for months have dropped and present great buying opportunities. Las Vegas Sands (LVS) has great future growth in their pipeline but a disappointing earnings along with the market decline has pushed the stock down 17% in the last month. Quality Systems (QSII) seems to be either saying the wrong things to investors or is on someone’s shit list because they’ve dropped 26% this month even though they’ve continued steady growth. So with that prelude I’ll move on to this month’s picks.

Shown below you can see the return of the previous year’s picks. Last November’s picks are up 31.55% vs. market returns of 2.82%.

1 Month Return -8.47%, S&P -6.52%

2 Month Return +10.20%

3 Month Return +16.14%

4 Month Return +8.45%

5 Month Return +13.17%

6 Month Return +32.56%

7 Month Return +37.21%

8 Month Return +44.81%

9 Month Return +24.14%

10 Month Return +28.72%

11 Month Return +21.92%

12 Month Return +31.55%, S&P +2.82%

STOCK SYMBOL (Current Price, Monthly % Change) - Rating - Comments

AAPL (171.54, -0.70%) - Buy - Apple is going to continue to surprise on the high side of Street estimates into the future. The iPhone is more profitable than most people know and new products will be announced in January at MacWorld. I expect continued performance with their existing products and new products to be announced around the AppleTV. No one likes this product and no one talks about it but this has huge potential if Apple can get it right.

PCU (104.20, -21.71%) - Buy - Metals have fallen out of favor with investors since uncertainty in economic growth has hit the market. But copper is a metal that will be used for an increased number of products in the future because of it’s electrical properties. This along with high dividends and an expanding mining empire are all reasons to own Southern Copper.

WFC (30.84, -10.01%) - Buy - Wells Fargo is the most conservative of all the large banks. When mortgage troubles hit the other banks Wells Fargo is sure to be hit a little softer. P/E down to 11.5 and a 4% dividend yield are a good value for Wells Fargo. This will be a safe stock in troubled banking times.

MMM (82.75, -12.21%) - Buy - 3M has shown that their growth strategy is starting to take traction. Y/Y growth in existing businesses was very strong and margins continue to be high. But their CEO keeps talking about irrelevant things during the conference calls. Take this as an opportunity to buy on the cheap and hope the CEO takes a note from Steve Jobs and stays away from the conference calls.

LVS (111.30, -17.26%) - Buy - You might call the startup of The Venetian Macau a hichup like the analysts did or you could recognize that opening the biggest casino in the world will mean bumpy earnings for a few quarters. The quarter doesn’t change their growth story and I was happy to see the famous Jim Cramer tell everyone to sell this stock. That means I’m buying more.

QSII (28.72, -26.42%) - Buy - I might have been a quarter early in my first recommendation on Quality Systems. The stock has tanked after a somewhat disappointing earnings. But growth is still consistently around 20% and the management team seems to have it’s head on straight not giving in to the Wall Streeters. I would buy this now while it’s still cheap.