Top 3 Trends for 2009… and the Stocks to Profit

The global economic crisis made 2008 a year that many investors would like to erase from their memory. A sharp rise in mortgage defaults caused banks to tighten lending for both consumers and businesses. Consumers stopped spending, businesses stopped producing, and raw material prices dropped sharply. The result was a rough 2008 that may pave the way for a solid recovery in 2009. Here are the top three trends that we see in 2009 and the top three stocks to go along with them…

The first big change in 2009 will be a new president that has promised to bring change. Barack Obama has petitioned Congress to pass an economic stimulus plan that could top $1 trillion. The plan will increase spending on public infrastructure in order to create more than 3 million jobs while improving the quality of life for Americans. The plan will also create opportunity for a few public companies.

Vulcan Materials Company [[VMC]] is a construction company that stands to benefit from these trends. Obama’s infrastructure plan will focus on building roads, bridges, modernizing schools and creating a clean energy infrastructure. Vulcan, a producer of construction aggregates, sees more than half of its sales come from these road and highway construction projects and stands to benefit.

A second big trend in 2009 will be the increase in oil prices as the biggest plunge in crude oil prices on record may be setting us up for a rally later this year. The so-caled forward curve of futures contracts suggest that oil prices will rise 28% to $60.00 per barrel by December. The increasing amount of supply going offline is also setting the stage for a potential shortage when oil demand rebounds.

Teekay Tankers Ltd. [[TNK]] is one indirect beneficiary of higher oil prices that pays out a large portion of its income. The oil tanker owner and operator is structured as a Master Limited Partnership (MLP) and therefore has to pay out the majority of its net income. Currently, the stock is trading so low that the dividend yield on this payout is in excess of 30% despite strong fundamentals.

A third big trend in 2009 is alternative energy – a combination of the two previous forecasts. Obama’s new plan calls for increased spending on alternative energies while higher oil prices will also reignite demand for such products by private industry. Combined, this is good news for the solar industry in particular as it is one of the largest alternative energy segments.

LDK Solar Co., Ltd. [[LDK]] is a premier solar energy play that could benefit from these trends. The firm has a strong contract backlog for 2009, but expects to see some delayed shipments in light of the current global economic crisis and tight credit markets. Meanwhile, the firm continues to show a solid cash position and unused credit facilities totaling more than $380 million and $850 million, respectively.

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