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Four Value Stocks for 2013


Growth has been the hot sector for more than a year now, but the growth boom is a bit long in the tooth, while this quartet of value plays have a lot of headroom this year and beyond.

Which stocks will perform well in 2013? I follow value stocks closely. For the past several decades, value stocks have outperformed growth stocks consistently, but during the past 15 months, growth stocks have outperformed value stocks.

During the past three months, though, value stocks have begun to outshine growth stocks. I believe 2013 will be an exceptional year for value stocks. Top-notch companies in leading industries are clearly undervalued and look very attractive.

I scanned my database to find four stocks with the right credentials to perform very well in 2013. My four picks are the stocks of US companies with exceptional prospects for 2013. All of my stock choices pay dividends, and all are selling at bargain prices. The Gold ETF does not pay a dividend but is selling at a bargain price.

My first recommendation is BlackRock (NYSE:BLK). BLK is the largest publicly traded investment management company in the world, with assets under management totaling $3.7 trillion.

The company offers a variety of investment and advisory products and services to institutional and individual investors. The 2009 acquisition of Barclays Global Investors, manager of all iShares ETFs, doubled BlackRock's revenues and added significant profits.

BlackRock is best known for its expertise in fixed-income asset management. The company has benefited from the globalization of capital markets and the growing demand for more sophisticated risk management tools and solutions. The firm has been gaining market share, aided by its size and untarnished reputation in the marketplace.

Sales and earnings growth slowed during the past 12 months, but a rebound is underway. Sales will likely rise 9% and EPS will increase 11% in 2013. New business from banks and governments seeking help to manage asset risk and to help unload troubled assets could push sales and earnings higher than expected.

BLK is Low Risk, share price volatility is below average, and the dividend yield is attractive at 2.9%. Buy now.

Founded in 1883 in Cincinnati, Kroger (NYSE:KR) is one of the largest US grocers, with 2,422 supermarkets in 31 states. The company also operates 790 convenience stores, 344 jewelry stores, and 1,141 supermarket fuel centers.

Kroger's typical format includes food and drug stores containing bakeries, delis, seafood, meat and floral shops, pet centers, and high-quality fresh items such as organic produce.

Management recently introduced an ambitious program to boost the number of new stores. Kroger will also expand its business by launching discount stores and restaurants. Management is committed to improve sales and earnings growth considerably during the next couple of years and beyond.
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No positions in stocks mentioned.
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