2013 Is Closer Than You Think

I'm not rocking your world by telling you it's December. You know it.

We're now just a few trading days away from 2012? Duh.

In a few short weeks "next year" will actually be 2013? Whatever. You're losing me, Captain Obvious.

However, have you seen what a lot of today's seemingly overpriced and overhyped stocks will be earning come 2013? You probably haven't, and here's where valuations start to get a little interesting. Let's go over a few of the 2013 earnings multiples on some of the more conversation-worthy stocks out there.



2013 EPS

2013 P/E

Baidu (NAS: BIDU)




Sirius XM Radio (NAS: SIRI)




DryShips (NAS: DRYS)




Molycorp (NYS: MCP)




SandRidge Energy (NYS: SD)




Keryx (NAS: KERX)




Source: Zacks Investment Research.

These really aren't outrageous prices for stocks based on what will -- in a handful of days -- be next year's estimated earnings.

Redefining the cheap pool
Baidu is China's undisputed search engine champ. Unlike the more mature search engines closer to home, Baidu isn't slowing down. Revenue and earnings climbed 85% and 79%, respectively, in its latest quarter. Fears of China tightening the clamps on the Internet are overblown for a search company that plays by the country's censorship rules.

Sirius XM Radio has been on a roll since completing the merger of Sirius and XM three years ago. The satellite radio provider is now just weeks away from initiating a modest rate hike. If successful, earnings growth will be substantial. If you still think that 18 times forward earnings is too high, see if you're lucky enough to find Sirius XM stand still for a year. The satellite radio star is fetching just 10 times the $0.18 a share that the pros are forecasting for 2014.

DryShips has a fleet of dry bulk carriers and a subsidiary that sends out offshore drilling rigs. Yes, DryShips is based out of Greece, but the situation won't be dire there forever.

Molycorp specializes in rare-earth oxides. The limited nature of the elements and their growing popularity in everyday gadgetry have made Molycorp an exciting yet volatile investment. The stock has shed more than half of its value since peaking in May. The growth should be dramatic at this point. Molycorp is on pace to earn $1.57 a share this year, but that bottom-line showing should more than quadruple to $7.34 a share in 2013 if Wall Street's targets are to be believed.

SandRidge is an oil and gas explorer with billions in proved reserves. It's true that the further one goes out in profit projections the more one forgoes accuracy. The up-and-down nature of energy prices only complicates things. However, it's hard to ignore a "year ahead" multiple in the low teens for SandRidge.

Finally we have Keryx Biopharmaceuticals. A money-losing biotech isn't a surprise, but time buys development stage companies the opportunity to hit the market. Keryx is in phase 3 trial testing on perifosine, a colorectal cancer drug that it's working on with Aeterna Zentaris (NAS: AEZS) .

Patience pays
Some of these companies may not live up to their 2013 profit targets, but more are likely to meet if not exceed those estimates.

Skeptical investors will still avoid them. Cynics will place more weight on what these companies earned already than what they will likely earn in the future. These are the moments that create opportunities for forward-thinking buyers with a reasonable tolerance for risk.

The clock is ticking, and that's a good thing.

Add these six stocks to My Watchlist to track developments as they happen throughout 2012.

At the time thisarticle was published Motley Fool newsletter serviceshave recommended buying shares of Baidu. Try any of our Foolish newsletter servicesfree for 30 days. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.Longtime Fool contributor Rick Munarriz calls them as he sees them. He does not own shares in any of the stocks in this story. Rick is also part of theRule Breakersnewsletter research team, seeking out tomorrow's ultimate growth stocks a day early.

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