Introduction

Introduction

We asked our experts and editors to lay it on the line and serve up their single best pick for the new year. What stock did they each believe would do well throughout 2011 and would significantly outpace the market?

The results are contained in this report.

Their favorites run the gamut of industries. Communications. Software. Components. Manufacturing. Transportation. Banking. Some names you'll recognize; others you won't. But rest assured all have solid fundamentals, strong growth prospects, and good valuations. And coming from Zacks experts, these stocks also share positive earnings estimate track-records.

As such, these are stocks you can buy and hold. They were selected for longterm performance, not just a quick price pop and fast trade. You can invest with confidence, not fretting over each day's chart movement.

So enjoy and read on to discover the Single Favorite Stock for 2011 from seven of Zacks leading experts.

Table of Contents:

Steve Reitmeister: Cummins, Inc. (CMI) ................................................ 2 Kevin Matras: Broadcom (BRCM) ................................................. 4 Tracy Ryniec: Banco de Chile (BCH) ............................................... 6 Todd Bunton: Oracle (ORCL) ......................................................... 8 Bill Wilton: Cardtronics (CATM) ................................................10 Sheraz Mian: Expeditor International (EXPD) ..............................12

Michael Vodicka: Verifone Systems, Inc. (PAY) ................................. 14

Other Zacks Resources .......................................................................... 16

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"My Single Favorite Stock for 2011" 7 Zacks Experts Each Share Their Most Compelling Pick

Cummins Inc. (CMI)

How do I love thee CMI? Let me count the ways...

1.) Top Down View: When the Great Recession got its grips on the world economy, the purchases of large durable goods came to a screeching halt. Certainly all the large transportation devices that use Cummins engines fit that mold. Given how demand was so low for so long, we now have a reflexive snap back in demand that shows no signs of slowing.

2.) Developing Market Exposure: Their growth story is very much about developing nations. Countries like China, India, Brazil are expanding their economies at a rapid pace. As they expand, they have to move more goods around the country. Their demand for these transportation devices is beyond voracious right now and CMI is right in the sweet spot.

3.) Industrials the Place to Be: The consumer may not be in the best shape. However, industrials and manufacturing are clearly experiencing the most strength. So it makes sense to have ample exposure to the healthiest groups in your portfolio. Specifically the engines makers are seeing robust gains, making it the #4 rated group according to the Zacks Industry Rank out of 267.

4.) Earnings Momentum: Cummins has produced a stellar string of earnings surprises averaging +73% over the past four quarters. The most recent

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"My Single Favorite Stock for 2011" 7 Zacks Experts Each Share Their Most Compelling Pick

Cummins Inc. (CMI) continued...

quarter saw a 40% surprise that pushed up 2011 EPS estimates to $6.45 from $5.40 before the report. The tremendous rise in estimates helped push CMI to a Zacks #1 Rank Strong Buy designation.

5.) Valuation: As for valuation, the average broker firm covering CMI sees the target price at $91. Given their historical valuations, that seems about right given current estimates. Yet since they keep blowing away #s each earnings season, that could prove to be very conservative. That is why some analysts have targets as high as $120. Goldman Sachs is among the biggest fans of CMI as they added them to their coveted Conviction Buy List in mid-September with a target price of $104. Add it all up and I would call this a GARP (Growth At a Reasonable Price) story with plenty of upside if they keep banging out those blockbuster earnings surprises.

6.) Dividend: With a growth story like this, an investor shouldn't need any more incentive to get on board. However, CMI also pays out a 1.3% dividend yield. Hey, that's better than your savings account.

Add it all up and there is a lot to love about Cummins Inc.

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"My Single Favorite Stock for 2011" 7 Zacks Experts Each Share Their Most Compelling Pick

Broadcom (BRCM)

Broadcom Corp. is in the semiconductor/communications industry and they are a leading developer of highly-integrated solutions for the transmission of digital data (voice, video, data, etc.) to home and business. Essentially, they enable broadband and other existing communications structures to deliver high-speed data over wired and wireless systems.

BRCM is a top Zacks Ranked Industry and is an important player in this group. In fact, they make chips and screen controllers for Apple's iPad and iPhone. In addition to Apple, their corporate customer base reads like a who's who of Silicon Valley, which includes Alcatel, Cisco, Dell, Echostar, HP, LG, Motorola, Netgear, Nintendo, Nokia, Pace, Samsung, Thomson CE and others.

Broadcom's product line is even more impressive and their business focuses on many key markets. Their three core businesses are Mobile and Wireless Networking, Broadband Communications, and Enterprise Networking, with a nice distribution of revenue across each segment.

One particularly exciting area getting a lot of attention lately is TV set-top boxes for the new digital, on-demand TV experience. (This fits into the Broadband Communications segment.) As companies race to see who'll control the television set, news that Echostar has chosen Broadcom's technology to power their set-top box has given them an early win.

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"My Single Favorite Stock for 2011" 7 Zacks Experts Each Share Their Most Compelling Pick

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