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5 Profit Makers for 2011

Call them hot stocks, profit makers, or portfolio boosters... these five stocks offer you the
opportunity to make handsome gains over the next few months. And on top of that, they'll likely
continue on their growth paths regardless of what the markets do.

That's because each of the companies listed are in markets with phenomenal growth potential.
I'm talking about energy companies, a gold miner... even a blue chip technology giant. From
small caps to blue chips... to dividend growth stocks, these investments have the potential to
return triple-digit gains.

So let's not waste any more time. The earlier you add these gains makers to your portfolio, the
higher returns you can expect.

Happy Investing,

Sandy Franks
Executive Publisher, Smart Investing Daily

Profit Maker #1: A High-Dividend Superstar for a Volatile Market

By Sara Nunnally, Editor, Smart Investing Daily

In times when the economy is struggling, and everybody's pulling their belts just a little bit
tighter, wouldn't it be nice to just sit back and collect extra income for doing nothing?

I'm not talking about a scam, or some sort of "fraternal" racket, here. No, collecting these checks
is much more simple — and it's legal. In fact, companies are begging to give you a check...
They're waving free money around, and all you need to do to grab your very own "Golden
Parachute" is step forward.

Have you guessed the game yet? Dividends...

Yep, that dry, old investment technique that's not very sexy and doesn't make you rich in a month
can actually provide investors with a modest amount of income.

And in these troubling times, dividends can also limit the losses of a stock's share price.
 So while they might not provide the exciting, stellar, triple-digit gains that everyone's portfolio
could use right now, dividends have a power that most investors overlook: Predictability. No
other investment vehicle in the market today has that.

Dividends: A Powerful Tool

Here's another quote from Investopedia that's incredibly germane to today's markets: "Unless you
find stocks at the bottom of a bear market, there is probably only a handful of worthy income
stocks to buy at any given time."

Well, folks, we're still pulling out of the worst bear market in decades. That means that good
quality stocks – some with high yielding dividends – remain at rock-bottom prices.

In short, you couldn't find a better time to create your own High-Yield Dividend Portfolio.

Let me tell you about one company that really fits the bill, and will be writing you checks for
many years to come.

A recent Forbes.com article noted 10 companies that have been "consistently profitable over the
last five years and that... [are expected] to post earnings increases next year."

Using their parameters, I found one with even higher yields.

First let me tell you the criteria I used to find this dividend monster... It's the same as Forbes':

 Consistent Profitability Over Past Five Years

 Expected Earnings Increase Next Year
 Debt to Equity Less Than 50%
 Dividend Payout Less Than 50% of Net Profits
 Trailing P/E Ratio Less Than 20

Of course, with the global financial crisis, many companies have been hurting. Profits are down,
and expectations are also down. But that doesn't mean you can't find good companies with great
dividends right now that will rebound quickly.

What I found was one company that looks pretty good. The results are for the first three quarters
of 2010...

Expected Dividend Forward

Profitable over 5 Debt to Trailing
  Earnings Payout Annual
years? Equity P/E Ratio
Increase Ratio Dividend
Novartis AG (NVS) 5/5 Yes 40% 38% 13.54 2.7%

First, it must be said that the global economic crisis has companies wary of disclosing any
forecast. But Novartis is on track for another round of record sales. It has also knocked share
prices back, distorting some ratios, like the debt-to-equity ratio and the dividend payout ratio.
That said, Novartis AG (NVS:NYSE) is still generating strong dividends. This stock has a solid
yield now that prices have rebounded from the whacking shares took in the first quarter of 2009.
This company is, of course, an international company.

It's pretty important in this type of financial environment to consider adding international
companies to your portfolio, especially international pharmaceutical companies.

One word: swine. Think it's an issue that has quietly gone away? Think again. In late 2010,
England revealed it had more than 300 patients sitting in intensive care units across the country.
And that's just one country. Across the globe, swine flu remains a hidden pandemic.

High-Yielding Dividend Monster

NVS is a leading pharmaceutical company that makes drugs I'm sure you've heard of... over-the-
counter medicines such as Excedrin and Theraflu, or pharmaceuticals like Aclasta Reclast for
osteoporosis.

But the swine flu puts NVS right at the top.

In July 2009, the U.S. government announced that five different companies were selected to
supply the U.S. with the H1N1 vaccine. They were GlaxoSmithKline (3%), MedImmune (6%),
CSL (19%), Sanofi-Pasteur (26%), and Novartis... which would produce 46% of the vaccine for
the U.S.

And in early November, the company received approval in Germany for its Celtura vaccine, a
cell culture-based vaccine to combat the swine flu pandemic.

That means it can crank out vaccines faster... And sell more. With the flu season under way, now
is the time to enter a stock like this.

NVS has also maintained its quarterly dividend through this crisis, and the company even
increased its dividend by 5% at the end of 2009.

Speaking of dividends, of course, let's get to the meat and potatoes: NVS offers a regular annual
cash dividend that has never been cut. The current dividend stands at $1.65 per share, equating to
an annual bonus just shy of 3.0% per share.

With a healthy, safe dividend yield, NVS is showing its strength and commitment to its
shareholders. Now that's a nice "Thank you."

Action to take: Consider Novartis AG (NVS:NYSE) for your portfolio.

Profit Maker #2: The Biggest and Best Company That Everybody Needs... But
Nobody Knows About
By Kent Lucas, Editor, Taipan's Safe Haven Investor

Before Starbucks, there were coffee cans. My dad had a few lying around the house under the
bed, in the cabinets... or in the garage, storing nails, nuts, bolts, etc. There were even coffee cans
buried in the backyard.

But as safety-seeking investors, we know the best reason for coffee cans is for stocks.

"Coffee can" investing refers to buying a stock and putting it away for a long, long time.
Literally, you could buy stock certificates, stuff them in a coffee can, and hide the can for years
to come. Many legendary investors talk about "coffee can" or (very) long-term investing, but it is
very hard to practice, as it requires incredible patience and discipline.

I've uncovered a perfect "coffee can" stock no one is talking about that is chock-full of long-term
growth potential and pays a nice dividend to boot. Let me tell you about this company...

The Ultimate Long-Term Gift

Many investors are scratching their heads about the future direction of the market and what to
stocks to buy. Well, this company should help relieve your headache. Here's a great gift in an
unpredictable market — a solid stock that will continue to outperform for many years — in an up
or down market.

Rest assured you will be able to sleep at night, focus on long-term out performance, and let this
quality company create wealth for you. Among other things, this stock is cheap, has an
outstanding dividend and earnings history, and is underappreciated by Wall Street.

A Solid Company for an Uncertain Future

It's understandable to be unsure of the future as even the best analysts, investors and economists
alike have little idea and consensus about both the global economy and markets in 2011. Despite
clearer evidence of a slow recovery, some still call for a double dip in the economy — or a major
correction in the market. Others believe there will be limited market upside, while a few think
that high inflation and interest rates will overrun the equity markets. This company and its share
price will do well in most scenarios that I can come up with for 2011 and beyond.

Imagine a company in essentially the same line of business for the entire 150 years of its
existence. Started by Judson Moss Bemis, the business made machine-sewn cotton and burlap
bags for millers along the Mississippi River. Bemis had to guarantee his bags' quality compared
to hand-sewn bags, and once proven, his business flourished. The Bemis brothers grew the
company based on quality and integrity, manufacturing bags used for storing all types of
commodities and food goods. The Bemis Bros. Bag Company issued its first stock in 1885 and
by the end of the 19th century it had cotton mills and manufacturing facilities across the U.S. Its
focus on quality, new products and the customer fostered the company's major growth.

In the 1950s the company got into the hot technology of plastics, as well as the pressure-sensitive
business. As a well-respected industrial business, now simply called Bemis, it continues to be the
leader in (flexible) packaging with tremendous global growth opportunities waiting.

It's a Wrap

Bemis Company, Inc. (BMS:NYSE) is a leading global manufacturer of flexible packaging and
pressure-sensitive materials. Bemis is headquartered in Neenah, Wis., on Lake Winnebago, and
has over 20,000 employees in 84 manufacturing sites worldwide.

As consumers, we use Bemis' products daily but don't realize it. Bemis provides the packaging
and labeling for major food categories, such as meats, vegetables, candies, etc. The food
packaging segment is its largest business, soon to represent 70% of sales.

Bemis' manufactures re-sealable packaging (such as ziplocks) for products like deli meat, chips
and cheeses. In terms of flexible packaging, think of liquids, loose-leaf vegetables (lettuce and
spinach packs) and snack food pouches, to name a few.

Non-food packaging and pressure-sensitive materials are the other two business segments that
have great long-term growth prospects. For example, in non-food packaging, Bemis is targeting
the medical device and pharmaceutical sectors for above-average growth. Other areas include
agribusiness, display packaging, labels and graphic signing.

Bemis maintains a leadership position through its strong technology and new product
development in polymer chemistry, film extrusion, coating and laminating, printing and
converting, and pressure sensitive adhesive technology.

Revenue and Acquisitions

In early March of 2010 the company completed a major acquisition of Alcan Packaging Food
Americas, which had sales of $1.5 billion. Thanks to the acquisition, combined sales for all of
2010 are expected to be over $5.3 billion.

In the very fragmented flexible packaging industry ($26 billion in the U.S.), Bemis is the largest
manufacturer in North and South America. Bemis' long-term growth strategy is supported by
acquisitions in a consolidating industry. Since 2000, the company has completed over 10
strategic acquisitions in key geographic areas (such as Brazil) or in the medical device sector.
After an acquisition, the company then pays down debt for the next year or so, integrates the
businesses, and then is on the lookout for the next value-added transaction.

Through acquisitions, the company realizes significant cost synergies, boosting earnings, and
also expands its global presence and gains access to new technologies. For example, this Alcan
Packaging acquisition should generate $60 million in annual cost savings from supply chain,
operating and administration improvements.

Earnings and Growth Leverage

I'm excited about Bemis' outlook for several reasons stemming from company, industry and
global factors. All combined, the Bemis growth story is compelling, both in the short term and
long term.

 The most obvious reason is the recovery of the U.S. (and global) consumer. Right now,
consumers are spending less overall, but with regard to food, they are eating in more, which
means more groceries and fewer restaurants.

 The company's most recent quarterly results showed record net sales driven by revenue
contributions from acquisitions in the past 12 months.

 Customers are shifting to higher margin packaging products (which acted as an offset to lower
2008–09 volumes). Have you noticed the varying types of packaging on food and beverage
items? Pay attention the next few times you go shopping. There is a much more adhesive
packaging for food items like candies, snacks and cold cuts. More easy-open, single-serve
packaging. Also, there are a lot more "ziplocks" being used on all types of items.

 Importantly, Bemis has a lot of room for operating improvement in its business, particularly in
its non-food businesses, which are expected to represent 30% of 2010 sales. Margins here are
meaningfully lower than in the core flexible packaging segment, but over time I expect steady
operating gains.

 Management's focus on health and medical products will also accelerate revenues. A shift
toward convenience and disposable medical packaging for medical devices and products should
allow this segment to grow in the high single-digit range.

 Long-term food demand will steadily rise as developing economies like China and India continue
to move up the income scale and purchase increasingly higher value-added foods. Bemis is an
indirect way to benefit from higher global food demands.

As I mentioned earlier, Bemis has "coffee can" stock qualities. In its long history, it's done
extremely well compared to the 500 index. And this is without reinvesting dividends, which, if
we showed, would further highlight the out performance.

Now, there is always a chance that a company's long-term position and performance could
deviate or diminish over time, so in reality, it is good to always keep an eye on these type of
stocks, but for the most part, I can just sit back and relax. Moreover, taking a "coffee can"
approach is even more valuable when constant, growing dividends are at play, as they are in
Bemis' case.
Pay Me... Again and Again

I know I sound like a broken record, but I have to keep stressing the importance of dividends.
And I'm not alone: Everyone from Bill Gross to Warren Buffett, to legendary trader John
Paulson and even Jim Cramer, is pounding the table on the value of quality dividend stocks,
particularly in this environment with frothy stock prices and ultra-low yields on bonds.

Remember, you can either automatically reinvest the dividend into more shares, or receive a
quarterly dividend check in the mail. Either way, this compounding effect is powerful and your
long-term returns will be even better if you reinvest the dividend payout.

Unloved: That's Good

At current levels it's tough to find attractively priced stocks. And just when I uncover some
names, Wall Street analysts are already onto them. I'm talking about my "Buy Straw Hats in
Winter" thesis.

A lot of the stocks I have on my radar primarily have "buy" or "strong buy" ratings. So the
important lift in a stock price that comes from analyst upgrades is not there. Now, it's not a
requirement, but being contrarian to Wall Street is pretty important to our investment approach.

Well, Bemis is one secret gem that has primarily "hold" or "sell" ratings on the stock. As the
U.S. economy improves, earnings will improve for Bemis, from both a volume and pricing
standpoint. Additionally, analysts will turn more positive once the benefits of the Alcan
Packaging acquisition show up.

Already for the past three quarters, management surprised on the upside, and in this past quarter,
it raised its full-year earnings estimates. I expect more of the same in 2011. And as earnings
estimates go up, Wall Street analysts will have to up their rating to "buy" to avoid missing out on
the stock.

Margin of Safety and Consistency

To be sure, the underlying value of the overall equity market is debatable, as a lot of stocks did
well in 2010 and are overpriced based on future expectations.

Bemis is a solid company. It is attractive on a free cash flow basis and should continue to pay
down debt and grow the dividend, especially in a slowly improving global scenario.

Bemis' consistent and conservative management should continue to hit its long-term goals of
6%–8% average annual sales growth and 10% earnings per share growth. That makes Bemis a
sound investment with a little bit of wealth preservation and wealth creation... an investment that
can help us navigate 2010 and sleep a little better at night.

Action to take: Consider buying Bemis Company, Inc. (BMS:NYSE) up to $37.

Profit Maker #3: Double Your Money On A Blue Chip Technology Giant
By Michael Robinson, Editor, American Wealth Underground

Gordon Moore could see the future. He knew better than almost anyone how a tiny electrical
component called a transistor would transform society.

Three scientists won the Nobel Prize for inventing the device. But Moore explained how it would
be harnessed. In 1965 he published a groundbreaking article in the obscure trade journal
Electronics.

Back then there were no digital wristwatches or pocket calculators. Man had not yet walked on
the moon. Computers were as big as cars and ran on bulky vacuum tubes. Homes still had rotary
phones.

The high-tech sage turned the world with what ultimately became Moore's Law - the number of
transistors on an integrated circuit doubles about every two years.

With that in mind, Moore envisioned a world in which computers played an integral role in
homes, offices and automobiles. A year before Captain Kirk used a handheld satellite phone on
the Star Trek television show, Moore predicted mobile communications would become
commonplace.

And today, this prediction could easily lead you to double your money on a rock-solid blue chip
over the next 18 months. Let me show you how...

A New Generation of Chips With 1 Billion Transistors

Because of Moore's law and efforts to prove it true, the computer drives the American economy
today more than the automobile did in the 1950s. That's why it's difficult to envision a vibrant
U.S. economy without a healthy Intel Corp. (INTC:NASDAQ).

But Intel isn't taking any chances the overall economic recovery will boost its sales. Instead, it
spent nearly $10.5 billion in 2009 on its growth.

The company devoted nearly $7 billion of that money to a new generation of tightly packed
microprocessors. Intel is putting nearly 1 billion transistors on a chip the size of a fingernail.

Based in Santa Clara, Calif., Intel says no matter how complex its chips become, the company's
business philosophy remains simple:

Make good on Moore's law. After all, Moore co-founded the company in the midst of the 1968
recession.
In the race toward miniaturization, size matters. It takes deep pockets and giant factories, called
"fabs." They're costing Intel between $1 billion and $2 billion a pop.

We're talking fabs the size of several football fields, with thousands of feet of pipes and enough
concrete to fill a pond. The factory floor teems with machines the size of pickup trucks.

Silicon wafers go in, get etched, cut and cleaned. Out come semiconductors more powerful than
the computers NASA used to land on the moon.

Microprocessors are tiny brains that drive computers. Transistors are like neurons, the pathways
of intelligence. The more neurons, the better the brain.

Intel is investing in a new generation of chips with multiple "brains" operating at lightning speed.
On these chips, a transistor's components will measure 32 nanometers across, or 32 billionths of
a meter.

By contrast, a typical germ measures 1,000 nanometers. Basketball star Shaquille O'Neal stands
2,160,000,000 nanometers tall. Intel intends to begin selling microprocessors with 32-nanometer
technology.

CEO Says Intel and PC Sales Have Finally Bottomed Out (And We Believe Him)

In fiscal 2009, Intel's bottom line took a bit of a dip. Profits dropped 7% to $35.1 billion. But I'm
not worried about what happened in the past – just about every company took a hit during that
horrific year. I'm actually happy earnings dipped to give us a great buying opportunity. As the
economy and the stock climb out of this rut, the company has a lot of upside potential.

I believe Intel's CEO Otellini when he says computer sales are set to surge. Companies and
families can only postpone new PC sales for so long. Because of inherent obsolescence, buying
used computers at bankruptcy sales is a stopgap, cost-control measure at best.

Software developers keep writing very complex packages that require more power. Translation:
They assume you will be running applications with the latest high-speed chips.

That's why it is hard to get much more than three years out of a PC. The thing starts acting
buggy, slows to a crawl and starts crashing on you. It then becomes more fun to watch honey
dropping from a spoon than to wait for your computer to boot up.

Meantime, even in a weak economy, Intel margins remain strong. Gross profit margin in the
second quarter of 2010 came in at 67% -- a new record.

Alliance With GE Targets $8 Billion High-Tech Medical Market

My wife and I love to take the kids to Santa Cruz Beach Boardwalk each year. It's quite a thrill to
blast off on Double Shot and go hurtling 125 feet in the air as we over look the bay, Pacific
Ocean and craggy coastline. We scream our fool heads off.
We have other favorite rides like Logger's Revenge, where we try to avoid getting soaked during
splash down. Last year's Christmas card had a photo of us laughing hysterically as we shot down
the chute of water.

Besides enjoying deep fried Twinkies sold on the boardwalk, my wife and I have another guilty
pleasure: We like to people watch. It never ceases to amaze us how big some teenagers are these
days. We often wonder how they will fare as adults if they already are obese.

So, as any one whose people-watched at an airport, shopping mall or movie theater will tell you,
Americans are getting bigger. We're also getting older. Go to a rock concert these days and you'll
see lots of gray hair.

These observations may seem odd when applied to a leading maker of semiconductors. But Intel
intends to cash in on a growing market for home healthcare and telemedicine.

In April 2009, Intel announced an alliance with General Electric (GE:NYSE) to develop home-
based healthcare. The company said the alliance will help seniors live independently. It also will
allow those with chronic medical conditions to manage their care from home.

Intel and GE Healthcare intend to invest $250 million in the enterprise over the next five years.
GE will use its extensive sales channel to push the high-tech Intel Health Guide. They're chasing
a market that will more than double from a forecasted $3 billion in 2009 to $7.7 billion by 2012.

They have reason to be optimistic. Other key statistics are on their side. The federal government
estimates the number of seniors in the U.S. will nearly double to 71.5 million in 2030 from 37
million in 2006.

Older folks are what I call "high touch" patients. They need a lot of medical attention. They also
prefer to live at home rather than retirement centers.

Either way, routine medical visits pose transportation and other challenges. So, more healthcare
at home will remain a growing market with an expanding customer base for several decades.

Then there are the patients with chronic illnesses, much of them related to obesity. Chronic
diseases like diabetes, heart disease and hypertension, kill more than 1.7 million Americans a
year, accounting for seven in 10 deaths.

This Atom Got Smashed but Is Poised for a Turnaround

The GE move makes more sense than some previous attempts Intel made to move beyond its
reliance on computer sales. It got the stuffing beat out of it for putting money in Clearwire,
ultimately writing off nearly $1 billion for its ill-fated investment in the maker of high-speed
wireless modems.
Here's a hedging strategy that makes more sense: Last year, Intel said it would join forces with
an offshore semiconductor maker. That's a rare move for a company that prides itself on internal
innovations and self-made products.

Then again, it shows CEO Otellini is flexible in pursuit of profits. Intel is sharing microprocessor
technology with Taiwan Semiconductor Manufacturing Co. (TSM: NYSE), a big player in
mobile devices.

The collaboration will allow Taiwan Semi to build what are known as "systems on a chip" based
on Intel's Atom microprocessor. That will expand Intel's reach into handheld phones, portable
Internet devices or other consumer electronics.

Intel vice president Sean Maloney says the Taiwan Semi collaboration will jump Intel to the
front of the line. It will speed the company's entry into markets for mobile devices by three to
four years.

And the plethora of mobile devices will continue despite, or perhaps because, of the recession.
Sales of homes, cars and trucks fell off a cliff in 2008.

By contrast, Gartner, the research company, estimates cell phone sales to consumers fell 4.6% in
2008's fourth quarter to 314.7 million units. Gartner predicts the recovery that started in 2010
will continue through 2011.

That gives Taiwan Semi an opportunity to pitch Intel chips customized for mobile applications, a
global market with annual sales of more than 1 billion units. No wonder Intel was willing to
spend two years negotiating the partnership with Taiwan Semi.

Intel also expects growth in the new category of mobile computers called "netbooks." Designed
for surfing the net, exchanging e-mail and using web-based applications, these are stripped-down
laptops.

Netbooks could start paying off for Intel in the next two years. ABI Research predicts a fourfold
increase in sales from a projected 35 million units in 2009 to 139 million in 2013.

New Core i7 Microprocessors Set Industry Standards

In November 2008, Intel generated quite a stir in tech circles when it introduced the Core i7
microprocessors. The family of three chips boasts four cores, called Quad-cores, for more speed
and performance.

Think of it as being four microprocessors on a single integrated circuit. Together they pack a lot
of computing power. Core i7 chips contain 731 million transistors.

Core i7 became the first product to feature the micro-architecture code named Nehalem. Intel
likes to name its chips. As it turns out, Nehalem is a river in Oregon not far from a plant it
operates in Tillamook.
The new processor set two records in performance tests. The Core i7 became the first chip to
exceed a score of 100 points on this benchmark chart. Appropriately enough, it came in at 17
points faster.

Along the way, Intel thrilled environmentalists. Core i7 chips speed such intensive applications
as video editing, 3-D computer games and Internet television by as much as 40%.

But the processors don't need any extra electrical power. Don't underestimate the importance of
green marketing.

Out here near Silicon Valley, the green movement remains a visible and powerful force.
California is the state that wanted to ban plasma television screens because they allegedly draw
as much juice as a refrigerator.

Intel posted a video of an executive explaining how the processors achieved their increased
performance-to-energy ratio. It's called Turbo Mode, which the company bills as an "entirely
new process technology for power."

Here's how it works: a "power gate" turns off cores in the chip that would otherwise be left idle
but that would still draw power when they're not in use. In turn, that power gets routed to cores
actually working. Intel says the Turbo Mode will be a standard feature across the entire Nehalem
family.

Intel Casts a Long Shadow on One of Its Oldest Rivals

I grew up in Kansas City during what might be described as the golden age for automobiles, the
mid- 1960s to the early 1970s. Detroit was still releasing stylish new muscle cars, and there were
still plenty of great designs from the 1950s cruising the streets.

The father of one of the neighborhood girls was a racecar driver. We would occasionally go to
his shop to ogle the hot new machines.

In fact, we also had running bets to see who could guess the exact year a particular car was made
as we walked through the neighborhood. This wasn't for money. It was for pride.

Of course, one of our main passions was arguing about which was better: Ford or Chevy. In
personal computers the big struggle is between Mac and the PC, as evidenced by Apple's popular
television commercials.

Not to be outdone, the folks who follow chips also have a long-running rivalry: Intel versus
AMD.

Both are storied Silicon Valley firms founded at roughly the same time, which accounts for much
of the rivalry. AMD celebrated its 40th anniversary in 2009; Intel turned 40 the previous year.
Lots of people seem determined to figure out which is better: AMD or Intel. A Google search
yielded 8,710,000 results. There's even a website devoted to the topic. Appropriately, the address
is http://amdvsintel.com.

There you will find dozens of articles examining distinctions between microprocessors made by
both companies. Clearly AMD makes some great products that gadget freaks love, like the
graphics processor for the popular Nintendo Wii game console.

But from a financial standpoint, there's really no comparison. AMD's stock remains in the cellar,
recently trading below $6. That's far less than half of the value of Intel's shares.

Intel will spend nearly $5 billion more on research, new plants, marketing and overhead than all
of AMD's 2009 revenues of $5.4 billion. Intel has more than $21.5 billion in short-term assets,
compared to the $3.21 billion AMD has.

There is a lot going on at Intel. When you add it all up, one thing is certain. Intel will come out
of this economic recovery a much stronger company. It has the right microprocessors for a fast-
changing technological world. It is investing heavily in new products and processing.

Intel also is spending heavily to keep its name burnished in the minds of customers. And the
company regularly realigns to drop unprofitable business units.

Action to take: Consider Intel (INTC:NASDAQ) for your portfolio.

Profit Maker #4: How to Book Profits of 20%... 40%... 100% — or more! — on
Planes Built in 1974
By Zachary Scheidt, Editor, Taipan's New Growth Investor

Recently I was flying home from another round of meetings with the Taipan brain trust in
Baltimore. After sweet-talking the gate agent into giving me the exit row seat (my 6-foot-4 frame
gets pretty uncomfortable in the standard coach seats), I was settling into some reading as I
awaited the two-hour flight back to Atlanta.

We pushed back from the gate in a timely manner (a major miracle considering my experience
with flight delays) and all seemed to be going well. As we taxied toward the runway, I was
looking forward to hugs from my little girls, some football tosses with my son, and seeing what
tricks the 1-year-old twins had learned while I was gone.

I didn't notice at first, but after about 10 minutes I looked out the window and there were other
planes passing us on the taxiway. I rolled my eyes — not another flight delay. I guess my track
record was going to have another black mark. In a few minutes the pilot came on the speaker to
let us know what the problem was...
Ladies and Gentlemen, we're just taking a bit of time waiting while the ground crew checks on a
maintenance issue for us... We've got a warning light on up here in the cockpit and we need to
make sure it's not an issue before we fly down to Atlanta. So sit tight and we will let you know
what we hear.

Just what every traveler wants to hear. Not only are we delayed getting to our destination, but
there could be a problem with our airplane. But just relax and we will keep you posted...
GREAT! But at least there is some redeeming value.

The maintenance performed on my jet to Atlanta most likely put more revenue in the coffers of
my latest New Growth position. Today we're going to look at an opportunity that has the
potential to yield an easy double-digit return in the next 12 months. Let me explain...

An Aging Fleet

The United States is largely behind the times when it comes to the aircraft we put in the skies.
With airlines facing budget cuts and intense competition, the amount of money available for new
planes has dwindled. So airlines continue to fly an aging fleet of planes, choosing to maintain the
existing vehicles rather than make expensive purchases of new efficient airplanes.

In some cases, the age of the planes in service is actually quite disturbing. According to a recent
article in The New York Times, "Northwest Airlines... flies 109 of the oldest jetliners in the
United States, DC-9s with an average age of 35 years. Northwest has yet to decide how to
replace the DC-9s, which could remain in service another five years or more." Think about it.
Are you comfortable with a tin can flying at 35,000 feet that was made in 1974? Imagine the
work that must be done to keep all systems up to FAA standards.

The problem is not expected to get better any time soon as the major airlines continue to struggle
with budgets, and even if they ordered new planes today, there would still be a significant wait
time for delivery. Airbus and Boeing, the two major airliner manufacturers, would be happy to
take orders from U.S. airlines, but Delta, American Airlines and United will all have to get in
line. Currently the two major manufacturers are busy filling orders for customers in Europe and
Asia, so the chances of new planes coming to the U.S. don't look good.

But there's a silver lining to this cloud — and one that could make us quite a nice investment
return. You see, this aging fleet must continue to be serviced and maintained in order to stay
active. And the companies involved in the maintenance process have nearly all the business they
can handle.

Spare Parts Lead to Significant Profits

TransDigm Group Inc. (TDG:NYSE) operates a unique business. The company manufactures
a significant number of the spare parts necessary for keeping the aging U.S. fleet in the air. More
importantly, the company owns the patent on many of these parts, which means that TransDigm
has the exclusive rights to replace these parts when necessary. Here is how the company has
created a monopoly in the aircraft parts business...
When a new plane is designed by Boeing or Airbus, the manufacturers give parts companies an
opportunity to bid on supplying specific parts for the design. TransDigm Group actively works
with these manufacturers to integrate its products throughout the infrastructure of the plane. TDG
usually comes in with very attractive pricing and is even willing to take a loss when selling the
original equipment to the major manufacturers.

While TDG would be considered an Original Equipment Manufacturer — or OEM (meaning that
the company makes new parts and systems for the aircraft) — the real money is made when this
equipment needs to be replaced. With aircraft flying for more than 30 years, and airlines
requiring maximum workloads and efficiency out of existing planes, replacement parts are in
high demand.

In addition to commercial airliners, TransDigm also has many of its parts installed on military
aircraft. Obviously, with the war in Iraq, the ongoing conflict in Afghanistan, and rising tensions
on many geo-political fronts, the Navy, Air Force and Marines are keeping a large number of
aircraft in active duty — which requires higher maintenance levels and more replacement parts.
So despite economic uncertainty, it's a good time to be in the aircraft parts business!

Financial Strength and Earnings Growth

Recently the company announced performance for the 2010 fiscal fourth quarter (the company
operates on a Sept. 30 fiscal year end). Net sales continued to grow at a healthy pace of 4.1%.
There aren't too many stable companies like TDG that are putting up this kind of earnings
growth in today's environment.

It is interesting to note the company books relatively soft margins on its OEM business. Again,
the company is willing to sell the original pieces at an extremely attractive price in order to get
its merchandise built into the structure of a new plane.

On the replacement parts side, however, the picture is much different. Management attributes the
company's strong performance to:

 High margins on its proprietary products (replacement parts)

 Productivity from cost reduction (efficiency)
 Lower interest expense
 Effective tax rate

To quote W. Nicholas Howley, the company's CEO, "We maintain our strict focus on
productivity, new business development, value pricing, and a well-defined acquisition strategy."
The disciplined approach to growing this company appears to be paying off as earnings continue
to grow and the stock price is in a strong positive trend.

If You Can't Beat 'Em, Buy 'Em

One of the more popular business themes for New Growth companies has been to make strategic
acquisitions at attractive prices. For TDG, these opportunities have been a major source of the
company's growth. As smaller manufacturers have struggled under large debt loads and cash
flow concerns, TransDigm has been able to step in and use its financial flexibility to purchase
these manufacturers at a discount.

In August 2009, TDG announced that it would spend $48 million to buy a particular business
line from Woodward Governor Company. The product line in question includes technologically
advanced fuel valves and surge suppressors. The majority of products in this line are currently
installed on military aircraft. In 2009, this product line realized revenues of $20 million and
about half of these revenues came from higher margin replacement parts.

Acquisitions like Woodward's product line allow TDG to continue to expand its monopoly on a
broader range of parts. The result is an even more stable revenue base that should continue to
grow regardless of how the economy performs in the next several years. TransDigm has made
four major acquisitions over the past year that all should bolster the long-term profitability of the
firm.

The Recommendation

Looking forward through 2011, management expects to see the earnings growth continue, with a
final figure for fiscal 2011 of $3.48 to $3.90 per share. Once again, I think this is an overly
conservative estimate given the health and stability of the business. Remember, these guys
supply both the commercial airline sector as well as military aircraft. So their revenue base is
both diversified, and instrumental to the national safety and to international commerce. Best of
all, most replacement parts are mandated by the FAA to be replaced on a regular basis. It's a
beautiful thing to have your customers required to buy your products.

Based on the company's history of profitable acquisitions and strong earnings growth, I think it's
very reasonable to assume that the company could make $4.20 in earnings in 2011. On top of
that, economic turbulence will probably have individual investors as well as institutional
investors searching for "safe" investments in companies that have stable business. This means
that investors will pay more for every dollar earned if the company has a stable source of
revenue.

Using a still conservative multiple of 20 and expecting earnings of $4.20 per share, I come up
with a fair stock price of $84. That's a potential 17% increase. Now if management is more
aggressive in its acquisitions, and the military signs a couple of additional contracts with TDG,
my estimates could turn out to be low... and then potential gains could be in the triple-digits. But
I would rather shoot low and be pleasantly surprised. This stable company has a strong future
ahead of it, and investors will likely be richly rewarded in the coming months.

Action to take: Buy TransDigm Group Inc. (TDG:NYSE) up to a price of $76.

Profit Maker #5: Inflation is Here... Time to Buy Gold is Now
By Andrew Snyder, Editor, Taipan Publishing Group

There's no doubt that the Treasury is printing more money to battle today's economic crisis. The
question is, why isn't gold shooting to the moon?

Gold should be at $2,000 an ounce by now. It's not, but it has climbed 59% since the beginning
of 2009. Now there is evidence that central governments are starting to hoard it.

With governments around the world sweating out failing banks, they've stashed 30,000 metric
tons, or 25%, of all aboveground gold in existence. China alone has increased its holdings by
75%, and the country is the premier holder of U.S. dollar reserves.

On Monday, November 3, 2009, the Reserve Bank of India announced it would buy 200 metric
tons of gold from the International Monetary Fund… That's roughly half of all the gold the IMF
was planning on selling. The sale was valued at $6.7 billion.

In early June of 2010, even Iran got in on the action, dumping some 45 billion euros for gold and
other assets. As the European situation matures, we can expect the trend to strengthen.

It's Inflation, Stupid!

Here's the deal: Inflation is here and more is coming. It will be the story in six months.

Take out a Post-it note and write "It's inflation, stupid!" Stick it on your monitor. Don't let
anyone tell you different. And when inflation is running in the double digits, and people are
complaining about the high price of everything, you can smile inwardly knowing that at the very
least you bought gold.

But don't just buy gold… buy gold companies.

You see, when gold goes from $1,200 per ounce to $1,500 per ounce (a 25% jump), cash flow in
major gold companies goes up between 43-51%, which is a 2-to-1 leverage factor.

I like Barrick Gold (ABX:NYSE) going forward. It spent a lot of money last year undoing most of its gold
hedges so that it could profit from the higher prices. It also went on a buying bender investing in more
than six mines. Barrick now owns 26 mines around the world, and produces 8 million tons of gold a year
on average. It is the world's largest producer. In the current credit crunch, the competition will find it
difficult to start new mines.

Global Mine Production Is in Decline - But Prices are Soaring!

They aren't making any more of it. Global gold production is in decline. In 2005, global mine
production was 2,550 metric tons. In 2006 it was 2,481 metric tons, and in 2007 it was 2,447
metric tons — a drop of 1%. Old gold scrap and inventory also declined by 3%. And recently in
2008, global mine production dropped 4%… The lowest production since 1995.

But increased demand due to the financial crisis finally pushed production up in 2009 by 6%. Demand
for jewelry, industrial, bar and coin, and ETFs increased by a total of 4% in 2008 and that has helped
push prices higher by nearly 60%.

Barrick Is Making Money Like It's Lying in the Ground

According to SEC documents, gold production for 2009 (as I write this, 2010 figures have not
yet been released) was 7.42 million ounces at a total cash cost of $466 an ounce, and copper
production was at 393 million pounds at a total cash cost of $1.17 per pound.

Barrick says its gold production for all of 2010 will be in the range of 7.6-8.0 million ounces,
back near 2007's production.

Action to take: You could almost buy any gold company at this point. But I suggest you
buy Barrick Gold Corp. at market.

Publisher's Note:
 Did you know that President Obama soon wants to confiscate your gold? Discover the one gold
investment that's better than gold coins, bullion or ETFs... and is also protected by a new 2012 reform
bill. Learn more about this gold investment.