In a useful piece on January 9 from Mother Morgan (MS), it listed its favorite longs, shorts, and pairs:

Top 10 Long Ideas

• Aetna (AET) 55.97
• Altria (MO) 74.90 
• AT&T (T) 40.89 
• Coca Cola (KO) 61.85 
• Colgate Palmolive (CL) 78.78
• Emerson Electric (EMR) 53.85
• General Dynamics (GD) 86.00 
• Microsoft (MSFT) 34.38  
• Newmont (NEM) 52.42
• Nike (NKE) 61.74

Top 10 Short Ideas

• Abercrombie & Fitch (ANF) 74.65
• American Express (AXP) 49.14
• Best Buy (BBY) 47.61
• Caterpillar (CAT) 68.53
• CSX Corp (CSX) 40.73
• Cummins (CMI) 59.18
• Freeport-McMoRan (FCX) 99.71
• Research in Motion (RIMM) 103.35 
• Target (TGT) 48.08
• Wachovia (WB) 35.46 E

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Top 5 Pair Trade Ideas, Long / Short

• ConocoPhillips (COP) / NRG
• WalMart (WMT) / Target
• Emerson Electric / Cummins
• Microsoft / Research in Motion
• Newmont / Freeport-McMoRan

Here are a few of my comments:

Long Ideas:

• With the presidential election coming, I’d be reluctant to get too heavily involved in the Aetnas (AET) of the world. I am not suggesting that the change in administration will be bad – it may well be good – for this group, but that’s the ultimate invisible catalyst. 
  
  
• I also have never understood why anyone would want to own slow growers like KO and CL trading at 2+ PEG’s, and multiples higher than the market. Don’t get me wrong: if we are in a recession / bear market, the latter names will likely work, but only as a function of money flows leaving other stocks for these “safe-havens,” but I’ve never been interested in buying on that thesis. 
  
  
• I went through the basic valuation levels of all the other long suggestions and I don’t have much to quibble with.

Short Ideas and Pair Ideas:

• Shorting BBY with Circuit City (CC) heading for the dust bin seems a tad aggressive to me; and never underestimate the resources of obsessed gadget lovers. 
  
  
• Similarly, with RIMM heading for China sooner rather than later and the stock trading below its growth rate, I’d be very leery of shorting at these levels. 
  
  
• My sense is that it is too late to short WB: if there is a total financial wipe-out shorting the whole group via an ETF would seem a much more prudent approach. 
  
  
• I really like the long WMT / short TGT pair, but I am not sure I’d short TGT outright. 
  
  
• I like MSFT but if I wanted to pair it off, it would not be with RIMM.
  
  
• The NEM / FCX make a ton of sense to me; I think relative to its price copper is as dangerous a long as I can find and I’d be very surprised if it outperforms gold.

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