Let’s talk recovery.  Over a week ago, Alan Brochstein recommended a list of ten stocks that he felt were rebound bets gaining momentum following the earnings reports in October.  As we all know, Alan Brochstein is a guy to be trusted!  However, there are some near-misses in his report that may be eschewed for some stronger options going into the next quarter of trading.

The operative word here is rebound.  If we’re looking only at stocks that have begun to build momentum, we’ll be left with a “will-she-won’t-she” story for next quarter picks.  What we’ve decided to do is choose stocks that were predicted back at the low point of the economic downturn in March of 2009 to turn up.  Banks and heavy industry are two of the most important recovery points right now—the former because it will fluctuate along with the Fed and the market-at-large, the latter because of its necessity in the evolving American market even outside of the expected, continued fluctuation.  Let’s take a look at Brochstein’s picks, and stack ours against some of his rebounders.

Roper Industries (ROP) – Roper hit a low of $37.20 per share almost exactly a year ago.  For the month of November, it’s found itself hovering between $50 and $54 per share.  We’ll go along with Brochstein’s pick on this one.  Not only did he astutely point out its plan of improving margins over the past four years, he touched on the importance of Roper’s internal diversification.  In this volatile market, choosing stocks that have the potential to flourish in spite of one or more failing sectors is key.

Magellan Health Services (MGLN) – Keep on looking up!  As pointed out in the Brochstein piece, Magellan is debt-free and has plenty of money to spend.  Don’t focus too much on the five-year, here.  Focus, rather, on the steps it has made since a middling May through October period.  We’re placing some of our chips on Magellan, one company that has played it safe.

Watson Wyatt Worldwide (WW) – While Watson Wyatt has looked (merely) okay recently, and certainly possesses the potential for growth, a human resources pick is dubious at best. Wyatt hasn’t been particularly strong since May, and has faltered over the past month.  Diversify and enjoy a great alternative to HR: banks that engage in traditional practices, like JP Morgan, which has enjoyed a two- to three-dollar variance since August (it currently rests around $45) since its drop to $15 per share in March.

Matthews International (MATW) – A great pick—after all, funerals don’t slow down with the market—with longterm potential.  Matthews is a fantastic stock to stick with as the market evens itself out over the next year or two.

DeVry (DV) – DeVry is set to buy back $50 million in shares, which bodes well for bearish buyers.  In comparison with other higher education companies, it slipped lower, trends more steadily, and seems poised for some serious gains if the market decides to rise over the next few months.  Due to news from Apollo, education stocks are looking good.

Alberto Culver (ACV) – Here’s another stock trending higher than expected.  Beauty supplies haven’t looked too bad recently, and Alberto Culver reached a two-year high just this month—more than just a number in this economy.  Trading Markets recognized the trend and published it, resulting in a profit of over 6%.

Procter & Gamble (PG) – We couldn’t disagree more with Procter and Gamble.  Its strength is contingent on consumer satisfaction which, to be honest, doesn’t matter as much today for the Walmart shopper as it did two years ago.  While it may seem like a left turn from such an established corporation, you might be better off with Hain, which sells the Celestial Seasoning brand of teas and anticipates modest profits per share.  It’s a bit of a gamble, but if it’s worth it, it’ll be marvelously so.

There are no “bad”  picks on Brochstein’s list—but be smart and supplement your new folder with some banks, like JP Morgan above, retailers such as the remarkably steady JC Penney, and tech stocks (Cramer says Nvidia and Intel).  And don’t make any wild guesses yet.  There are more trends to track before you decide to go hog-wild on recent upturns and third quarter successes.