John Buckingham
John Buckingham
Al Frank

Pick: Waste Management (WM)

As editor of the top-rated Prudent Speculator newsletter, John Buckingham provides stock ideas to thousands. His 8.9% annualized returns since 1998 as manager of the $96 million Al Frank Fund (VALUX) easily bests the 3.9% for the S&P -- and it proves he delivers results in the real world. With uncertainty abounding, Buckingham sees Waste Management as a value opportunity. The shares have slumped 11% in the past year as investors punished the trash hauler for failing to increase its earnings as quickly as it had forecast. But Buckingham thinks the earnings miss was a temporary effect of the weak economy. Indeed, analysts expect 10% annual profit increases for the next five years, and the stock's trailing price/earnings ratio of 15 is below the sector's average of 19. He thinks shares of the "unloved" company, which boast a 4.4% dividend yield, could jump 40% in the next three to five years. As Buckingham puts it, "No matter what happens, you are going to want your trash picked up."

--R.D.


By Katie Benner, Ryan Derousseau, Amy Feldman, and Mina Kimes @FortuneMagazine - Last updated June 20 2012: 10:46 AM ET
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