Top 6 stocks for 2015 by Mike Larson

Mega-Market Winner #1:
Aircastle Ltd. (AYR)

The aerospace industry is in the midst of a major growth spurt. Airplanes are flying near capacity and airlines are earning record amounts of ancillary fees. Meanwhile, the release of newer, more advanced, fuel-efficient aircraft is giving airlines another reason to expand their fleets.
All of this means airlines have the motive, means and opportunity to expand their fleets over the coming few years. Rather than buy planes, though, many airlines are opting to lease them from third-party firms. More than a third of the worldwide fleet is now leased rather than owned, compared to about a quarter back in 2000, according to Fitch Ratings.
That brings me to Aircastle Ltd. (AYR), one of the major aircraft leasing firms. As of mid-2014, the firm owned 148 airplanes with a book value of approximately $5.7 billion. Passenger planes made up 84% of the portfolio and freight aircraft the remainder.
Basically all of the fleet was leased up, helping the firm generate adjusted net income of $47.7 million. Revenue of $226 million rose sharply from $170.4 million a year earlier.
Strong activity overall is further encouraging the company to raise money for expansion. The company boosted the size of its revolving credit facility to $335 million from $150 million last year and it also sold a 15.25% stake of its equity to Marubeni of Japan, raising another $200 million and change.
I expect those dollars to be put to work in the coming quarters, helping bolster Aircastle’s bottom line going forward. The firm also agreed to form a joint venture with the Ontario Teachers’ Pension Plan. The idea is for the third-largest pension fund manager to invest as much as $1 billion in planes to lease out with Aircastle providing the marketing, management and administrative expertise.
Aircastle features a nice indicated dividend yield of 4.2%, much better than you can get on Treasuries.
If this stock is able to get back to the level it was trading at in 2007, as I expect, that would be more than a double.

Mega-Market Winner #2:
Trinity Industries (TRN)

For the longest time, our dependence on unfriendly parts of the world for oil was an American Achilles heel. Boy, are times a-changing now! Thanks to good old fashioned American know-how and innovation — such as hydraulic fracturing, or “fracking,” — we’re now pumping a tremendous amount of oil from new domestic sources. We’re also seeing a corresponding boom in the natural gas and related liquids business.
How much energy are we talking about? Well, the International Energy Agency recently predicted the U.S. will overtake both Saudi Arabia and Russia in terms of global production!
There’s just one problem. Energy producers have been having trouble getting all that new oil and gas to market. That’s because they’re finding it in places that aren’t effectively served by traditional, established pipeline and distribution networks.
That’s where companies like Trinity Industries (TRN) come in! Trinity produces and leases railcars and barges that transport energy and other cargo to market. Its business is booming because shipping product by rail is often easier than trying to get new pipelines permitted and built in far-flung locales. A record amount of North American oil is now traveling via rail — 415,000 carloads of oil in 2013 versus only 9,500 five year earlier!
Trinity’s earnings have surged almost 95% over the past three years, while revenue has jumped by a third! In the second quarter alone, the company reported earnings of $164.2 million, or $1.01 per share. That was almost DOUBLE the $84 million, or 52 cents per share, it earned in the same period of 2013.
Sales jumped 39% to $1.49 billion. The order backlog in its railcar division alone soared to a record $5.5 billion, or 45,350 cars, thanks to strong demand for cars used to ship energy products.
I expect to see those figures grow over the next couple of years and the stock price to follow. Trinity’s fundamentals are also solid enough to earn the stock a top-notch rating of “A” (Buy) from our Weiss Ratings system.
Impressive — right? And yet these are just two of the 12 stocks I‘ve tagged as mega-market winners!
I’ll tell you how to get instant access to the full details on all 12 in a moment. But first, let me tell you about a mega healthcare winner ...

Mega-Market Winner #3:
GlaxoSmithKline (GSK)

The world’s population is getting older as birth rates in many parts of the globe decline and life expectancies rise. Over the next couple of decades, roughly 10,000 Baby Boomers will turn 65 every day in this country. And worldwide, the 65-and-older age bracket will more than double to 20% of the world’s population by 2050. That compares to around 9% now, and 5% in 1970.
That puts healthcare and drug firms right at the center of a powerful, long-term, demographically driven bull market in healthcare demand! Within the healthcare sector, pharmaceutical companies offer the most attractive combination of capital appreciation potential plus great yields.
My personal favorite is GlaxoSmithKline PLC (GSK), the diversified British drug, vaccine and consumer health products maker. Its brands include everything from Energix-B for hepatitis and Advair for asthma, to Polident for denture cleansing and TUMS for indigestion treatment.
The stock had been languishing for years amid concerns that are now becoming outdated — generic drug competition, slow sales in Europe and lackluster performance from older, established products. But Glaxo shares have since started to rise out of a multi-year downtrend.
The company is organizing a distinct business unit that will be responsible for more than 50 of its aging products. Those products generate about $4.6 billion in sales per year, as well as steady cash flow. By putting them into a separate unit, and then potentially spinning that unit off to shareholders — or selling it to another company — Glaxo could raise a hefty chunk of cash it can reinvest in faster-growing businesses!
The company also sold its Ribena and Lucozade sports and fruit drinks to Suntory Beverage & Food of Japan for $2.1 billion. That move further helps Glaxo focus on its core drug business, while also freeing up funds to reduce debt.
Finally, Glaxo is continuing to develop new drugs that could replace lost revenue from previous drugs facing generic competition. It received six U.S. drug approvals in 2013, the most ever, and it has 10 drugs entering late-stage Phase 3 trials over the next two years.
Bottom line: The stock has been breaking out to the upside. It featured a healthy dividend yield of 5.4% as of August. And it merited a “B-” (Buy) grade from the Weiss Ratings.

Mega-Market Winner #4:
NCR Corp. (NCR)

There is no doubt we’re seeing a massive shift toward increased automation and electronic transactions in the banking industry. If you’ve “chatted” online with your bank representative, deposited a check, paid a bill or transferred money to a friend using your iPhone or other smartphone, you know what we’re talking about.
This shift toward advanced, electronic and mobile banking is going to be a boon for NCR Corp. (NCR), founded in the 1880s as National Cash Registration Company. That’s because the company makes software and hardware used to enable banks to accept remote deposits using computers and mobile phones. NCR also manufactures advanced ATMs that help banks reduce transaction time and cut personnel and branch costs.
Those financial services-related businesses account for about 50% of NCR’s total revenue. The firm also has exposure to the retail sector (32% of sales) and the hospitality industry (11%), which are increasingly automating their businesses. You’ve probably seen computerized checkout lines at your local grocery or department stores — or electronic screens and ticketing machines at sports stadiums and movie theatres. That’s mostly NCR, too.
NCR reported adjusted earnings of 68 cents per share in the second quarter, topping estimates of 66 cents per share. It also reported an 8% year-over-year rise in revenue led by a hefty 42% increase in software sales.
The firm also continues to expand its product and service offerings through smart acquisitions. In late 2013, it bought the banking software and services firm Digital Insight for $1.65 billion and the fraud and transaction switching firm Alaric Systems for $84 million. The goal is to make “omnichannel” banking — where the customer can seamlessly transact business in person, at an ATM, on a computer, over a smartphone or anywhere else — more streamlined and ubiquitous.
The stock was rated “B+” by Weiss Ratings as of August.
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Mega-Market Winner #5:
MeadWestvaco (MWV)

With the global economy on a general upswing, it’s no surprise that the industrial sector has performed fairly well. And one of my favorite stocks in the sector is the diversified chemicals and packaging firm MeadWestvaco Corp. (MWV).
MWV serves the food and beverage, printing, healthcare, energy and electronics industries, among others. Its products are diverse — from cartons to hold beer bottles and soda cans to fluid additives used in oil drilling and production.
I’ve been keeping my eye on MWV for some time for three reasons: Its decent dividend yield (recently 2.3%), its “A-” (Buy) grade from the Weiss Ratings, and its direct connection to improvements in the domestic and global economy.
In other words, MWV recently unloaded almost all of its interest-sensitive forest and timber operations to focus on its non-rate-sensitive, diversified industrial businesses.
In the second quarter of 2014, the company reported adjusted earnings from continuing operations of $91 million, or 53 cents per share. That was a 78% surge from $51 million, or 28 cents per share, in the year-earlier period.
The firm paid a special dividend of $1 per share to shareholders in March 2014, along with the regular quarterly dividend of 25 cents per share. It accelerated its buyback of $300 million worth of its own shares in February.

Mega-Market Winner #6:
Goodyear Tire & Rubber (GT)

Many companies were hurt by the slump in commodities prices that accompanied the rise in interest rates over the past couple of years. But others have benefitted from those falling raw materials prices, including my next pick — Goodyear Tire & Rubber (GT) — a stock rated “A-” (Buy) by the Weiss Ratings.
As you’ve probably known for years, Goodyear manufactures and sells tires domestically and overseas. What’s changed is that its costs have fallen sharply due to the commodity selloff. Not long ago, rubber futures and forwards prices in Tokyo, Shanghai and other key trading hubs hit lows not seen in the past four to five years.
At the same time, demand is perking up in key markets like the U.S. Tire shipments here rose an estimated 4% in 2013 after a couple of years of flat demand. Improving demand for new cars is one force driving higher volumes. So is the need to add replacement parts like tires for old cars. After all, the average age of a U.S. passenger car is now 11.4 years, up from 8.4 years in the mid-1990s.
As if that weren’t enough, Goodyear has also managed to shrink its pension obligations in order to free up cash for debt repayment and shareholder payouts. Those costs have shrunk to $700 million from $3.5 billion a couple years ago.
While the stock recently hit its highest level since early 2008, I think there is plenty of gas left in the tank. After all, Goodyear traded as high as the high $30s in 2007 — and much higher than that in the 1990s.
The six mega-market winners I’ve just introduced you to are just the beginning ...