J.P. Morgan’s Best Ideas for 2013 Include Apple Inc. (AAPL)

Another pick disclosed in the interview was The Boeing Company (NYSE:BA). Analysts expect that the aerospace and defense company will see declining earnings in 2013, possibly because of cuts in U.S. military spending. In fact, net income was already slipping last quarter, coming in 6% below its levels from Q3 2011 (though revenue was up). Renaissance Technologies, whose success since inception has made founder Jim Simons a billionaire, more than doubled its stake to 1.8 million shares by the end of September (check out Renaissance’s stock picks). At earnings multiples in the teens we think there might be better buys in industrials.

Lee and his team also like Target Corporation (NYSE:TGT). At trailing and forward P/Es of 13 and 12, respectively, the retailer is quite cheap and it hasn’t only staved off online competition but actually had its earnings rise over 10% last quarter versus a year earlier. Note that Target, like McDonalds, has a limited connection to the broader economy and doesn’t depend too much on a bull market. Billionaire Stanley Druckenmiller initiated a position of 1.2 million shares in Target between July and September. We like Target, but it’s possible that other retail stocks are even better buys: Wal-Mart Stores, Inc. (NYSE:WMT) trades at a very small premium to Target, and then there are the dollar stores to consider.