Investors face a quandary this year.
No less an expert than BlackRock chief strategist Bob Doll thinks U.S. stocks will post rollicking double-digit gains in 2011 -- but with serious volatility along the way.
One way to deal with these ups and down, if you're not a professional like Doll with the trading resources of a BlackRock (BLK, news, msgs), is simply to buy the stocks of great companies likely to do great things this year, presuming the market will reward them.
To build my list of companies you want to own now, I consulted a brain trust of four money managers and analysts with records that beat the markets nicely over time. I also used my own system of selecting stocks, which has been producing good results by combining valuation and financial strength analysis with bullish insider-buying trends.
The results: I'm going with 3M (MMM, news, msgs) and the chip maker Advanced Micro Devices (AMD, news, msgs).
I'm also suggesting regional bank BB&T (BBT, news, msgs), General Electric (GE, news, msgs) and American Airlines parent company AMR (AMR, news, msgs), as some of the best stocks to own for 2011.
Here's a closer look at what makes these companies stand out:
3M: Always searching for the next Post-it note
The main thing that makes 3M a great company is that it never skimps on the funding needed to create innovation. That's why it has given us ubiquitous products like Scotch tape and Post-it notes, both of which you probably have within reach right now if you're at your desk.Behind the scenes, 3M offers a broad array of unique products, from adhesives, plastics and films to appliances, security systems and food-processing components. The company's products are used in your home, your office, your car, even your dentist's office.
3M has built a growing lineup of hit products because it regularly plows about 6% of revenue back into research -- more than $1 billion a year. As a result, around 30% of revenue in any given year comes from products released in the last five years.
Despite being such a quality company, 3M's stock is trading for cheap right now. At $86 a share, it goes for just 14 times annual earnings, well below its historical average of 18 times earnings. Buying quality companies at low prices has helped money manager Larry Coats Jr. post a decent long-term record at the RS Capital Appreciation Fund (RCAPX) -- and 3M is one of his favorite stocks.
So why is the stock so cheap? A big part of the reason is that 3M sells optical films used in flat-screen TVs. Inventories in this sector piled up sharply last year, which dampened demand. But this problem will pass, sooner or later. "There's nothing here to worry about, other than letting time run its course," says Coats.
Morningstar analyst Adam Fleck thinks 3M can earn around $6 a share this year. If the stock works its way back to trades at 18 times earnings, the price would go to $108. The company also boasts a 2.4% dividend yield, so you get paid while you wait.
Advanced Micro Devices: The comeback kid
Chip maker Advanced Micro Devices is a great company. It shows bursts of brilliance now and then that reward shareholders even though it is so outgunned by rival Intel (INTC, news, msgs).That will happen again in 2011, believes Patrick Dorsey, the director of stock research at Morningstar. AMD is launching new server chips called Interlagos and Valencia. These chips are based on AMD's Bulldozer technology, the company's first new chip architecture since 2003, when it ambushed Intel with a game-changing line of chips.
Bulldozer allows more processing cores to be packed onto a single chip. This is a big advantage in data centers, and AMD's new chips will help it steal significant market share from Intel in server processors this year and beyond.
The last time AMD outmaneuvered Intel was back in 2003, when it rolled out its Opteron processors. From 2003 to 2006, AMD took a fifth of the market for server chips, and its stock went to $40 from around $5, according to Morningstar. "We think something similar is going to happen this year," says Dorsey. He believes market share gains this time around could double AMD's earnings over the next year or two.
That should double the stock price, too, since most analysts still aren't expecting this coup, says Dorsey. Wall Street analysts have a median price target of $8 on the stock, according to Thomson Reuters, or well below its recent price of $8.90 a share. In contrast, Morningstar has a five-star rating on AMD, its highest rating. Five-star stocks tend to outperform over time.
BB&T: Superbank of the South
Unless you live in the mid-Atlantic states or the Southeast, you might not have heard of BB&T, even though it is one of the better-quality banks around. BB&T is a "super regional bank" with more than 1,800 branches, which provide the array of personal and commercial banking and insurance products typical of a local bank.But unlike many regional banks, BB&T has solid financial strength. The bank has paid back its government bailout money, and CEO Kelly King says it has enough money to meet the new international capital standards soon to be implemented in the U.S.
Continued: General Electric: A model for rivals
More from MSN Money
- 5 reasons to love big banks again
- Give 'Dogs of the Dow' another run?
- Why Japanese stocks look tempting
- World's 5 best stock markets in 2011
- Top pros' top stocks for 2011
Hey Michael,.. if I had billions of dollars for investments, I'd start my own companies and own them lock, stock and barrel. None of my companies would ever be placed on the stock market either. The only risks I take are how I run my companies and not on how someone else runs theirs into the ground. 
My way or the highway! 
