WOO-DOGGY!

Would you like some volatility to go along with your morning coffee?

Since I last came out with my top 5 stocks for November,  the market’s gyrations have certainly put everyone on edge, and make buying stocks at this juncture definitely not for the faint of heart, or those with very short term investing time frames.

I recently wrote that now was a fantastic time to buy shares of companies you have been watching and where the fundamentals present an excellent risk/reward scenario.

My watch list is no different, and this month I have a broad range of stocks that I am looking at for possible inclusion into the PeakStocks.com portfolio.

These stocks enter and exit my Top 5 as constant fluctuations in both price, market conditions, and business fundamentals constantly alter the investment thesis.

Please note that my Top 5 Stocks for December aren’t yet formal recommendations.

I have more due diligence that I have to perform on them, but they are compelling enough with the research that I have done to be at the absolute top of my list, at least as of this writing.

I’ll break down this post into 2 parts:

• Let’s Start With What We Know: Let’s first quickly take a look at the current stocks in the portfolio, and what actions, if any, should be taken
• Top 5 Stocks for December: The latest companies that I am high on, and why

Let’s Start With What We Know

My top picks from my own portfolio

Before we get into the new names that are on my list, let’s first take a look at the names in my portfolio, and how I feel about them:

#1: GeoEye:  Strong Buy

GeoEye Inc. (NASDAQ: GEOY): GeoEye is a leading provider of global space-based and aerial imagery and geospatial information.

GeoEye’s imagery is used in a broad array of applications that include: government monitoring and surveillance, intelligence gathering, construction planning, scientific research such as environmental monitoring, and the online mapping industry via Google (NASDAQ: GOOG), Yahoo! (NASDAQ: YHOO), Microsoft (NASDAQ: MSFT) and other partners.

GeoEye is my highest pick right now, and the first place where you should put new capital to work.

Now that GeoEye’s latest satellite, GeoEye-1 has successfully launched and is producing usable imagery, the only thing holding back this stock will be the final approval of that imagery from the National Geospatial-Intelligence Agency (NGA) which should arrive within 30 days or less.

Once GeoEye starts generating revenue from this new satellite, GeoEye’s year-over-year comparisons will make the stock look ridiculously cheap, which it is.

Now that GeoEye-1 is launched and all but up-and-running, GeoEye is the best company in the commercial imagery space when compared to its rival DigitalGlobe (NYSE: DGI).

If you’ve got new money to invest, GeoEye is my #1 recommendation.

New to the GeoEye story?

• Read my analysis of the company’s latest quarterly earnings release and conference call here.
• Read my initial buy recommendation here.
• or listen to my EXCLUSIVE interview with GeoEye’s management team here.

#2: AAR Corp:  Strong Buy

AAR Corp. (NYSE: AIR): AAR Corp. is a diversified company that provides products and services to the aviation, aerospace, and defense industries worldwide. It operates in four segments: Aviation Supply Chain; Maintenance, Repair, and Overhaul (MRO); Structures and Systems; and Aircraft Sales and Leasing.

I just put out an exclusive post on AAR Corp. comparing its valuation to that of the overall aerospace and defense industry, as well as how AAR stacks up to its peers.

Needless to say, AAR is a deeply undervalued stock, even accounting for a slowdown in its business.

I re-recommended purchase of AAR’s shares at that time for $11.75 each, and while the stock has shot up to around $16.00, I still feel that it is undervalued, but not by quite as much as I did before.

Don’t take my word for it, do your own due diligence and pay special attention to how low AAR is trading compared to its book value, tangible book value, and the recent insider buying.

If you’ve got new money to invest, AAR is my #1-B choice for new money right now.

New to the AAR story?

• Read my last company update here.

#3: eHealth, Inc.: Buy

eHealth, Inc.