8 Stocks to Own in '08

Kiplinger

Making money by throwing darts at stock tables will be tough in 2008 if market gains are as modest as we predict they'll be. Instead, it will be a year in which the spoils go to the most-astute stock pickers. In that vein, we present our best bets for 2008 (listed in alphabetical order; stock prices are to November 12). See A Winning Crop for 2007 to see how our '07 picks fared.

AT&T (symbol T)

AT&T says it's everywhere, from "Japaridelphia" to "Chilondoscow." It's also in the middle of the hullabaloo surrounding Apple's fast-selling iPhone. AT&T may not reap enormous profits right away from its exclusive deal to be the wireless carrier of choice for the iPhone. But as Apple cuts iPhone prices even more, AT&T is likely to attract millions of additional customers. With 65.7 million mobile-phone subscribers, AT&T has established wireless as its main focus. It won't be long, in fact, before wireless services surpass AT&T's declining land-line phone business.

AT&T's empire now includes Ma Bell, four original Baby Bells, the wireless network and the Yellow Pages. Its next move will be into entertainment and programming. Despite its huge size (market value: $238 billion), this ever-changing company should deliver earnings growth of 8% to 12% a year for some time. The stock, which yields 3.7%, could reach $50 over the next year.

CEMEX (CX)

The world is spending like mad on roads, schools, airports and power plants, and suppliers of basic materials are benefiting. From a humble start in 1906, Mexico-based Cemex has become the world's largest producer of ready-mix concrete. Ready-mix, the stuff that comes in bags, is ideal for small jobs anywhere. Cemex is also a global force in traditional cement, which is used for giant building projects, such as bridges and tunnels, and in aggregates, which are used for road paving.

Cemex has been hurt by the housing recession in the U.S., which accounts for about 25% of its sales and profits, but sales in Eastern Europe and South America are a growing part of its revenue mix. That makes Cemex a way to invest in global economic growth.Cemex's earnings have tripled since 2003, but they were down 10% in the most recent quarter from the year-earlier period. As a result, Cemex's American depositary receipts have slumped 34% since June. But Cemex predicts that 2008 will be better. The stock should rise to $35 in the coming year.

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