Picking stocks for 2016.

Continuing a decades-old tradition, Business North Carolina asked several investment pros to offer their three favorite stocks and one to avoid. The pool was limited to companies based in the state. The forecasters mostly opted for out-of-favor stocks that showed disappointing performance in 2015: Cree and Bojangles' were each picked twice. Let's hope the picks light up portfolios--and don't prove to be for the birds.

RULES OF THE GAME

Pickers were asked to select their three favorite North Carolina-based stocks. Graphs are based on each stock's performance between June X 2015 and Dec. 11, 2015. Expected growth rates and percentage of industry analysts with "buy ratings" is based on data from Thomson/First Call

Bobby Edgerton

Co-founder, Capital Investment Cos., Raleigh

Cree Inc. (CREE)

MARKET CAP: $2.7 BILLION

PIE RATIO: N/A

EXPECTED FIVE-YEAR EPS GROWTH: 36%

The company is too hated on the market, with the stock down by two-thirds from a high of $75. but it has assets of $3 billion and a solid balance sheet with about $200 million in long-term debt. Light-emitting diode devices are a big deal--Cree's LED bulb is the best-selling one in the U.S.--but they've drawn a lot of competitors.

ANALYSTS WITH BUY RECOMMENDATIONS: 28%

Duke Energy Corp. (DUK)

MARKET CAP: $46.4 BILLION

P/E RATIO: 19.4

EXPECTED FIVE-YEAR EPS GROWTH: 3%

It has a dividend of almost 5% and its stock was down from almost $90 to the mid-$60s in mid-December. The company has negative cash flow because of the dividend, but it can borrow money any time it wants The $6.7 million Piedmont Natural Gas Co. acquisition is not a big deal in the grand scheme of things because Duke is so large.

ANALYSTS WITH BUY RECOMMENDATIONS: 26%

Krispy Kreme Doughnuts Inc. (KKD)

MARKET CAP: $948 MILLION

P/E RATIO:

33 EXPECTED FIVE-YEAR EPS GROWTH: 20%

The company Just had a disappointing quarter, but it has a good balance sheet and virtually no debt. Krispy Kreme has huge international opportunities, even if same-store sales outside the U.S. declined nearly 4% in the third quarter. It is an out-of-favor stock, down about 40% from its high in 2013, but it can rebound in 2016.

ANALYSTS WITH BUY RECOMMENDATIONS: 83%

AVOID HanesBrands Inc. (HBI)

The Winston-Salem-based apparel company sells brands Including Hanes, Champion and Playtex and last year bought Spartanburg, S.C.-based Knights Apparel. It's a good company, but its stock is just too high.

Frank Jolley

President, Jolley Asset Management LLC, Rocky Mount

Bank of America Corp. (BAC)

MARKET CAP: $179 BILLION

P/E RATIO: 12.7

EXPECTED FIVE-YEAR EPS GROWTH: 10%

Shares of the bank remain inexpensive at 83% of book value and slightly more than 11 times estimated earnings for 2016. Net interest margins should benefit as interest rates increase. Earnings should benefit from lower legal expenses. Shares traded in December for about $17, about two-thirds less than the highs reached in...