I was inspired by Dan Dicker's column Thursday on his single best idea for this year to also offer to our paying subscribers my top five ideas of the moment. These are names I own now in my GARP partnership, which are demonstrating earnings momentum, reasonable valuation, great relative strength, and most pay a dividend too!Sandisk (SNDK) is the well-known maker of small flash memory cards. Flash is already ubiquitous in the removable format used in cameras and the like, but it is slowly creeping into greater usage as a substitute for large scale memory. Smartphones and tablets are highly reliant on flash, and that usage will only grow. I like Sandisk both long term and right now, due to the potential for upside (especially going into the holiday consumer electronics season). It trades below a market multiple and pays you 1.5% annually.
I just recently added Marvell (MRVL), which is not a comic book company but the Israeli-based supplier of communications semiconductors. They are highly levered to mobile devices and storage controllers, with good momentum from printers as well. The stock is cheap and sports a pretty good yield.
Facebook (FB) needs no introduction. I had to swallow hard when I bought it a few months ago, because it barely meets my valuation discipline, but so far so good. The earnings are growing into the valuation as they capitalize on mobile. The mobile concentration is wildly critical to the success of just about any website nowadays, but especially to social sites. FB is not without its flaws, and I am not necessarily convinced it will be "the next Google". But right now they are cashing in on the leverage inherent in a business with 1 billion users.
AGCO (AGCO) is the Georgia-based vendor of a variety of agricultural equipment. Unlike competitor Deere (DE), AGCO is putting up the earnings in a strong farm economy. AGCO was a consolidation story awhile back as they bought up various brands. But now they have integrated the various businesses and are seeing real synergies in costs and marketing. The name is inexpensive at 10x, but does not offer a great dividend, only 0.7% yield.
Finally, there is Lear Industries (LEA), which has been on fire this quarter, with the stock up 18%. Lear makes seats for cars, so it is levered to an improving automotive cycle. If you want to own Ford (F) or General Motors (GM), you can own Lear and get equally attractive upside, since it is a smaller company. The stock is cheap, although it is unlikely to ever command a large multiple. But the 1% yield is not too bad.