Our annual stock-picking extravaganza reaches a new high this year, with Bobby Edgerton, co-founder of Raleigh-based Capital Investment Cos., suggesting investing in cannabis could spark lofty gains. He picks Morrisville-based Pyxus International Inc., formerly Alliance One International Inc., which is diversifying from leaf tobacco to faster-growing alternative products. Most of this year's other selections of stocks based in the state or with significant investment or employment here were more conventional. Both Christy Phillips and Frank Jolley expect a rebound at Dollar Tree Inc., which owns Family Dollar stores. Phillips and Ann Zuraw made the best call in last year's contest, urging investors to avoid Sonic Automotive--shares declined 31% in the year ended Dec. 7. Edgerton made the worst pick with his "avoid" on Raleigh-based Red Hat Inc. The software company drew an IBM takeover bid and gained 44%. Buoyed by Red Hat, IBM is a favored pick of Phillips this year.
ANN ZURAW president, Zuraw Financial Advisors LLC, Greensboro
ENPRO INDUSTRIES INC. (NPO)
MARKET CAP: $1.4 BILLION
Charlotte-based EnPro has eliminated its exposure to asbestos and uses a strong balance sheet to enter higher growth markets with product innovation and acquisitions. Margins in its sealing, bearing and compressor-parts business run 17%.
EXTENDED STAY AMERICA INC. (STAY)
MARKET CAP: $3.2 BILLION
Charlotte's Extended Stay America owns or manages 625 hotels that have more than 69,000 rooms. Shares pay a 4.8% dividend and trade more than 20% below the 52-week high.
ALBEMARLE CORP. (ALB)
MARKET CAP: $9.4 BILLION
Albemarle, also based in Charlotte, is a global specialty chemicals company that gets a third of its profit from lithium, a key resource for the fast-growing electric-vehicle industry. Shares trade a third lower than the 2017 peak.
* AVOID: CREE INC. (CREE)
Durham-based Cree has negative cash flow and is losing money, which means negative returns on equity, assets and investments. Cash per share went from $6.85 in 2017 to $3.85 in 2018 following an acquisition, according to Reuters.
CHRISTY PHILLIPS director of research and head of equity strategies, Franklin Street Partners, Chapel Hill
IBM CORP. (IBM)
MARKET CAP: $110 BILLION
IBM's pending purchase of Raleigh-based Red Hat will be a game-changer. Investors will have an attractive opportunity, with shares now trading at about nine times the estimated earnings over the next year. IBM offers a 5% dividend. We...