Stock Picks Peter Lynch would like for 2008

Pikeman — Mon, 14 Jan 2008 10:14:14 GMT

Today I will talk about a global medical specialty company ACL – Alcon, Inc., that Peter Lynch would like to consider for his portfolio. This company could outperform the S&P 500 index in 2008.

The specialty drug market is a good defensive move in a slowing economy, with generic drugs in particular remaining a solid investment regardless of which party wins presidential election.

ACL - Alcon, Inc. (Alcon)

is a research and development driven, global medical specialty company focused on eye care. The Company develops, manufactures and markets pharmaceuticals, surgical equipment and devices and consumer eye care products to treat diseases and disorders of the eye.

Lynch looks for consistently profitable, out-of-the-limelight, low-debt, reasonably priced stocks meeting his earnings growth requirements. Although in Lynch's view: stocks growing earnings faster than 30% annually are risky bets and high growth rates aren't sustainable, ACL’s Annual EPS Growth Rate is 33,7% and in my opinion ACL under current conditions is still a good candidate for Lynch’s 2008 portfolio.

ACL’s fundamentals:

Annual EPS Growth Rate – 33,70%

Debt to Equity Ratio – 0,28

Current P/E Ratio – 28,9

% Institutional Ownership – 19,10%

Pre-Tax Margin: 5-Year Avg. – 28.00%

Earnings Growth Estimates 2008 - +16,40%

ACL’s technical analysis opinion:

Short Term Indicators:

7 Day Average Directional Indicator - BUY

20 - 50 Day MACD Oscillator - BUY

Long Term Indicators:

100 Day Moving Average vs Price - BUY

50 - 100 Day MACD Oscillator - BUY

I have no idea how Peter Lynch would react to this stock pick that I think he would like. But one thing's for sure: he would not buy this stock without doing extensive due diligence and becoming thoroughly familiar with it. And neither should you. So have fun, and get your stuff done.

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Stock Picks Peter Lynch would like for 2008