Poised for a Smash-Bang 2015

The market's role as a forward-looking mechanism is a concept taught at just about any entry-level college finance course, and it's a staple mechanism employed by myriad market commentators on a weekly basis. Unfortunately, based on their actions, a lot of investors must occasionally fail to buy into this theorem. I think this is because, to a large degree, it flies against human nature. A great deal of individuals mainly base their immediate-future forecasts on the events of the recent past. This is a key reason that, even though more than five years have passed since the stock market has bottomed, the retail investor is still underweight equities compared with recent historical norms. Even as the markets have staged a massive rally, investors remain paralyzed by the financial crisis of 2008 and 2009. This phenomenon is also why, in the year following the Sept. 11, 2001 attacks, car-accident deaths ratcheted higher -- totaling more than half the numer of people who perished in the attacks -- due to an increased fear of flying. This same behavior also applies to individual stocks. Two of the best-performing equities in my portfolio this year, Micron Technologies (MU) and Gilead Sciences (GILD), look very expensive based on their 2013 earnings levels. Micron broke even last year, while Gilead posted a profit of just over $2 a share. But investors who had been looking ahead near the end of 2013, and who scooped up these stocks based on what they were likely to do in 2014, have been richly rewarded. Micron stock has soared so far this year, and the company is tracking to a profit of more than $3 a share for all of 2014 after its breakeven performance last year. Gilead, for its part, is on its way to quadrupling earnings to some $8 a share this year based on likely first-year sales of to its hepatitis C blockbuster Sovaldi, which enjoyed the most impressive drug launch in history. So, as we get ready to enter the last four months of 2014, it is time to look forward to next year. Here are a few attractive equities that are poised to have a big 2015. Investors should consider picking them up before 2015 arrives. Emerald Oil (EOX), a small Bakken producer, has been a favorite of mine throughout 2014. The company has moved from posting losses in 2013 to tracking toward a profit of $0.15 to $0.20 a share amid more-than-doubled production for 2014. This profit growth is projected to accelerate next year, as well: The current consensus estimate has Emerald earning $0.60 to $0.65 a share on an additional production surge of some 75%. Emerald shares have rallied by one-third over the past couple of months amid investor anticipation of further growth ahead in 2015. I still believe the stock has additional upside potential from current levels, as Emerald has some of the cheapest acreage where it operates, in addition to enjoying those huge production increases. TRI Pointe Homes (TPH), meanwhile, has had a nice 2014 as it has absorbed Weyerhaeuser's (WY) huge homebuilding unit -- an integration that has vaulted TRI into status as a top-10 homebuilder in the U.S. by volume. Also as a result of this, TRI Pointe is tracking to a 30% earnings gain vs. the prior year. The future should be even brighter: The company is expected to double earnings in 2015. This could be a conservative projection, moreover, if the housing market strengthens or if the company continues to easily beat quarterly expectations, as it has done over the past few quarters. These are just two of many equities that look set to have a big 2015. But keep your eyes open. There are certainly other opportunities for investors that are ready to look forward to the new year and put 2014 in the rear view mirror.

Poised for a Smash-Bang 2015

I'd advise picking up these two stocks before year-end.

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