Revealed: StreetAuthority's Best Stock Picks of 2012
[Editor's note: This article originally appeared in Insider, which is a free publication for StreetAuthority subscribers.]
Last Monday, I asked each of the StreetAuthority stock market strategists to put into writing their assessments of the year just passed regarding their respective advisories. What worked? What didn't?
All of which got me to wondering about the stocks I've touted in StreetAuthority Insider in the past 12 months...
StreetAuthority Insider is an exclusive newsletter for paid subscribers in good standing to one or more of the StreetAuthority products. It's part of the package. Each week I bring Insiders market insights from the experts at StreetAuthority, including, in most issues, a specific investment idea. Think of Insider as a research tool.
What's fair is fair. I could hardly ask my colleagues to air their laundry without doing the same myself.
So here's how I spent my time between bowl games this past week: I went through the Insider archives, all 52 issues, to take another look at the individual stocks that were featured in 2012.
This was not a scientific survey, but neither was it random. I singled out only those issues that contained a clear-cut recommendation from one or more of the StreetAuthority analysts. In the end I had a list of 39 stocks. I then calculated the annualized return for each of the recommendations, based on the price of the stock on the day it was spotlighted in Insider, compared with its close on the last day of the year.
Fully 60% of the stocks featured in Insider during 2012 were in the green on New Year's Eve, with annualized gains ranging from single digits to triple digits.
Not surprisingly, some of the biggest gainers -- as well as some of the biggest disappointments -- originated with Game-Changing Stocks, which twice monthly ventures into the speculative realm of aggressive growth stocks.
Profiting from the "Coca-Cola Killer"
During the holiday spending season just passed, you may have noticed a TV advertising blitz for SodaStream International's (Nasdaq: SODA) soda maker -- a hundred-dollar fountain carbonator that enables consumers to make their own soda pop. Long before that, however, Andy Obermueller reiterated his February recommendation of SODA in the May 12 Insider -- even after shares spiked 26% the prior Wednesday on a report of stronger-than-expected sales. Since then, SODA rose a further 24.3% through the end of the year, for an annualized gain of 40.2%.
An even better Insider performer for Andy, on an annualized basis, has been Exact Sciences (Nasdaq: EXAS), a game-changer in the detection of colon cancer. When Andy mentioned EXAS in the November 30 Insider, the company was trading at $9.81 a share. A month later it closed the year nearly 8% higher at $10.59, for an annualized gain of 146.2%.
Then there's the other side of the game-changer coin.
On February 11, Andy recommend fledgling biofuel producer Gevo (Nasdaq: GEVO), partly on the promise of production plans for a proprietary replacement for gasoline. This fall, Gevo fell 44.4% in just two days after unexpectedly announcing it was sending those plans back to the drawing board.
So it goes in the quest for The Next Big Thing. The potential rewards are huge, but so are the risks. That's precisely why Andy staunchly recommends that aggressive growth stocks never make up more than 20% of an investor's portfolio.
2012's Biggest Surprise
Among all the stocks covered in Insider in 2012, the biggest surprise for me was also the biggest winner -- courtesy of Stock of the Month's Amy Calistri.
After all, this was a former high-flyer that was still trading at a fraction of its dot-com highs more than 12 years ago. It was a company that went through four CEOs in the prior four years.
Amy picked Yahoo as her August stock of the month three weeks after the world's largest Internet portal picked 37-year-old Marissa Mayer as its fifth CEO -- and it was largely because Yahoo put this former Google wunderkind in charge that Amy pulled the trigger.
At the time, Amy pointed out to her readers that a leadership change "can absolutely transform a troubled company." By the time I featured Yahoo in the October 26 StreetAuthority Insider, Mayer had set a new course for the Silicon Valley stalwart -- one that included a focus on mobile -- and was winning rave reviews from Wall Street.
Since Labor Day through the end of 2012, the formerly stodgy Yahoo posted the seventh-largest gain of the 500 stocks that make up Standard & Poor's widely followed index. Since the Halloween edition of Insider, Yahoo rose 18.5% through year-end, for an annualized gain of 155.9%.
|[Note: Here's one reason Amy's a successful investor: She plays poker. Now, anybody can play poker... but not everyone has played against a billionaire... or played in the World Series of Poker... or walked away from the table with thousands of dollars in winnings. Amy has. And it's her skills at the card table that give Amy an edge at the trading screen. After all, in poker, as with investing, you've got to know when to place a bet... when to go all in... and when to fold. Click here to listen to a presentation about how you can obtain Amy's special report, Five Crucial Investment Lessons I Learned at the Poker Table (If you'd rather read the text version, follow this link).]|
Natural resource stocks continued to underperform the broader market last year. The S&P 500 produced a total return (including dividends) of 15.9% in 2012. That compares with an 8.8% increase in the REV Hard Assets Producers Exchange Traded Fund (AMEX: HAP), the benchmark index used in StreetAuthority's Scarcity & Real Wealth advisory.
The performances of the natural resource stocks featured in Insider last year were mixed.
When I quoted Scarcity & Real Wealth's Nathan Slaughter as saying he was watching MasTec (NYSE: MTZ), shares of the natural gas pipeline contractor were trading at just over $18 each. MTZ finished the year at $24.93, for an annualized gain of 127.4%.
Action to take --> As an investor, you know that no one gets it right all of the time. But by regularly using the information in The StreetAuthority Insider as part of your own research, you can help tilt the odds in your favor. The best part: There's no extra charge for this service for as long as you remain a subscriber in good standing to any of the StreetAuthority advisories.
StreetAuthority LLC owns shares of YHOO, NKE, MTZ, SEP, GLNG, UPL, HEK, AEF, CSCO in one or more of its “real money” portfolios.