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."


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