Mayor’s Picks - June 2008

OK, OK, it’s not June anymore but I’ve finally gotten around to my picks. The last couple of days have been terrible on the market. It seems everything is down except Apple. The market has been beaten down on inflation concerns and a continued weak housing market, not to mention oil. But this is a great time to buy stocks on the cheap. A lot of fundamentals still are not all that weak like manufacturing data. Plus if the economy contracts 1% this year and you can get a stock at an 80% discount isn’t that still a good deal?

My picks from last month really struggled. The two biggest losers were Las Vegas Sands and Sandisk. Sands is down on concerns about Las Vegas slowing down. But gaming was only down about 1% last month so even if room rates fall slightly the company will still rebound. Sandisk is another good long term story. They’ll come back and with a P/E at 18 and forward P/E at 10 this is a great deal. This was also the first time in Main Street Stocks history that the SP beat me over one year. And it was by a measley 1%. So on with the picks.

1 Month Return -20.10%, SP -9.85%

2 Month Return -13.52%

3 Month Return -1.36%

4 Month Return -15.21%

5 Month Return -18.41%

6 Month Return -26.68%

7 Month Return -14.87%

8 Month Return -19.73%

9 Month Return -19.49%

10 Month Return -11.93%

11 Month Return -19.88%

12 Month Return -17.19%, SP -16.08%

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

HMC (34.02, +2.50%) - Buy - Honda is the auto company in the best position to capitalize on high gas prices. They are in such demand that they can’t keep up right now, which keeps their margins high. Add to that the new fuel cell car they are introducing in limited production and a fuel efficient airplane and you’ve got a great long term story.

WFC (24.12, -16.68%) - Buy - Wells Fargo is the only bank I would touch right now. They’re the most conservative and if all else fails maybe Warren Buffet will buy the company. I would expect more write downs but not nearly as much as banks like Citi and BOA.

CMG (81.65, -14.43%) - Buy - Chipotle makes it’s triumphant return to my picks. After falling nearly 50% this company is a buy again. They may have price pressures but a growth rate near 50% more than justifies their 30 P/E ratio. It’s good value for the growth.

UA (25.75, -29.45%) - Buy - Under Armor is one of the best names in athletics and has not only quality products but a very strong brand. The stock has been beaten down on worries of consumer spending cutbacks but I think it’s a great time to buy. Sales growth is still strong and profits will follow next year.

MMM (69.78, -11.29%) - Buy - Diversified blue chip company trading under a 14 P/E ratio. They’ve increased capital spend and RD spend which bodes well for the future. An attractive dividend doesn’t hurt.

LVS (44.87, -41.03%) - Buy - Long term picture is still strong. Once the Singapore casino opens up the growth rate will really accelerate. The stock may stay low for a while but expect it to bounce back once the economy or consumer spending ramps up again.

SNDK (17.62, -45.68%) - Buy - Memory maker that’s been hurt by anticipated consumer spending slowdown. They’ve got an 18 P/E with a forward P/E at 10. Even if they come close to that number this is a great buy.

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