5 Stocks to Buy in 2012

Photo: Fokasbeyond.com

(Motley Fool) By  Anand Chokkavelu, CFA - There's something wrong with each of the five stocks I'm going to present to you today.

But that's a good thing. If there weren't, we'd have to pay full price for these stocks. Instead, we get a cheap crack at five companies that the market is seriously underestimating.

Without further ado, here are five stocks to buy in 2012. In the last section, I'll also tell you exactly when to buy them.

Stock #1: Corning

Corning is in the seemingly unsexy glass industry. However, its bread and butter is supporting the tech industry. It had a roller-coaster ride during the dot-com bubble because of its optical fiber business. Today, it's the go-to screen provider to the LCD TV market. Tomorrow's most promising opportunity is its scratch-resistant Gorilla Glass seen in so many of today's smartphones and tablets (although unofficial, Gorilla Glass is widely reported to be the screen glass in Apple's iPhones and iPads). The big opportunity there is moving up form factors and becoming prevalent in big-screen televisions.

However, a few weeks after it raised its dividend, there was the scary news that a Korean customer pulled out of a contract with its Samsung Corning joint venture. The result was Corning reducing its earnings guidance significantly for the fourth quarter.

More than even demand in end markets, I believe the biggest threat to Corning is its customers refusing to pay premiums for Corning's products. The latest news certainly bears that out. However, at current single-digit price multiples, I think a bet on Corning's ability to monetize its current lineup and innovate into the future is justified.

Stock #2: Ford


It's hard to be unbiased about Ford and General Motors (NYSE: GM  ) . People have very strong, polarizing feelings about the companies themselves and the cars they make.

Here's my best shot at reality.

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