by Alyssa Oursler | April 1, 2013 8:50 am
Boy, does time fly.
It seems like we were just anxiously watching the neck-and-neck race for last year’s stock-picking contest, yet already, the first quarter of 2013 has come and gone.
So naturally, it’s time to check in and see how this year’s picks for InvestorPlace‘s 10 Best Stocks for 2013 are doing.
For those who don’t know, the annual contest offers a list of expert-picked buy-and-hold investments that, if held all year, should provide market-beating returns for investors.
After three months, things are looking alright. Seven of the picks ended the first quarter in the black, but only two are sitting ahead of the S&P 500‘s nearly double-digit gains. The bottom three are just downright ugly as this point.
Of course, it’s still early in the game. Keeping in mind that it’s a marathon — not a sprint — here’s a recap of InvestorPlace’s 10 Best Stocks for 2013 so far:
Q1 Return: -25%
Investor: Greg Harmon
Greg Harmon’s pick of Great Lakes Dredge & Dock (NASDAQ:GLDD) got off to a strong spot and was sitting pretty in third place just over a month ago.
But, as Harmon has recently learned first hand: The higher you go, the higher you have to fall. Great Lakes went from slightly outpacing the broader market to sitting deep, deep in the red … and in dead last place.
The cause of the sudden change in direction? The company disclosed an accounting error and said it would have to restate earnings for the second and third quarters of 2012. That sent investors running and the stock sank a whopping 18% … in one day.
Since then, the bleeding has slowly continued, bringing GLDD’s total Q1 loss to an ugly 25%. Sometimes, no matter how strong the technicals … well, things just don’t go as planned. Of course, there’s still plenty of time for shares to recover and Great Lakes Dock & Dredge to put together one heck of a comeback.
Current Return: -18%
Investor: Stephanie Link
Well, the good news is that Stephanie Link’s pick of Vale (NYSE:VALE) is no longer sitting in last place. Then again, the only way to go as of our last update was up.
The company has gained one spot thanks to some ugly losses from GLDD, but VALE still has been on a steady downward trend. All in all, it has lost 18% since 2013 began.
So far, Link’s belief in the company’s ability to rise thanks strong exposure to emerging markets, improving internal fundamentals and attractive valuation simply haven’t materialized. But keep in mind that at this time last year, Banco Santander (NYSE:SAN) was sitting in eighth … and ended up with the bronze medal.
Then again, it wasn’t deep in the red despite that poor position, while Vale has quite a bit of ground to gain just to break even.
Q1 Return: -17%
Investor: Mebane Faber
Next up, we have our sole ETF on the list: the Global X Funds Greece (NYSE:GREK), picked by Mebane Faber. The stock had eked out a 1% gain at the point of our first check-in, but things have gone downhill from there
The fund still is in eighth place, but its year-to-date returns slid from black to red thanks to — yup, you guessed it — European turmoil. Namely, the bailout of Greece’s neighbor Cyprus sent Greek stocks across the board tumbling … and sent fear rippling across the eurozone. The tiny island nation is Greece’s fourth trading partner, and there also is concern that the issue could slow down Greece’s recovery from its own similar crisis.
So while Greek was cheap, maybe it was cheap for a reason.
Or, if you still believe in Faber’s logic, maybe it’s an even better buy now. Regardless, with one quarter in the books, GREK sure isn’t turning any heads in this contest.
Q1 Return: -1%
Investor: Charles Sizemore
Luxury automaker Daimler (PINK:DDAIF) — carefully chosen by contest veteran Charles Sizemore — started the year off strong. Then, the same thing that hit GREK hit DDAIF: Europe.
As Sizemore put it in a recent update:
“The biggest reason for Daimler’s underperformance of late is that the maker of the iconic Mercedes Benz has the misfortune of being domiciled in Europe. The past month-and-a-half has not been kind to investors in European stocks.”
He then went on to list the pile of problems: the Italian election, the Spanish scandal and, once again, Cyprus. Thanks to those struggles, Daimler is 1% in the red year-to-date, bringing its 52-week losses to 11%.
Of course, that one-year return doesn’t matter for the contest … and those recent losses could simply mean potential upside for the final three quarters. For now, though, let’s just enjoy the irony: Charles normally hates the auto industry, yet big names like Ford (NYSE:F), Toyota (NYSE:TM) and Honda (NYSE:HMC) have been going strong lately, while his pick is lagging.
Q1 Return: +5%
Investor: Rick Pendergraft
Mylan (NASDAQ:MYL) was one of only two picks to not budge a spot from our last check-in, sitting nicely in sixth place with a quarter down.
As we said last time, the pharma company rode the uptrend of the broader markets as 2013 kicked off … but also rode its more recent downtrend. If a spring selloff comes, as many are expecting, things could get even uglier.
Still, investor Rick Pendergraft believes that the pharma company’s technicals and fundamentals — including a low forward P/E ratio and high institutional interest — make it a winner. Thanks to the stability in generic drugs and the pipeline for new products coming online in 2013, Pendergraft is convinced that the stock could climb to over $35 — a 30% gain.
Three months since he made that call, the stock has climbed 5%. Only 25% more to go.
Q1 Return: +6%
Investor: Jeff Reeves
For InvestorPlace Editor Jeff Reeves, the first quarter has gone pretty well. Last time we checked, tech staple Intel (NASDAQ:INTC) was flat and sitting in second to last place.
Now, it has enjoyed 6% gains — less than the broader market, but gains nonetheless — and has squeezed into the top five. Over the last week alone, Intel has more than doubled the Dow’s climb. If that momentum continues, the dividend-payer could be in a nice position to make slow but steady run during the remaining quarters.
In fact, slow-and-steady is exactly what Reeves was after with this pick. Reeves purposely went with “a stable and undervalued blue chip instead of a long shot.”
Plus, there’s more reason to be bullish on the chipmaker. Analysts from Goldman Sachs, for example, recently reported that a significant reduction in the company’s capex could help boost the company’s shares.
I’m sure Reeves — even though he no longer actually holds his pick — is hoping they’re right.
Current Return: +8%
Investor: Paul R. La Monica
Another pick moving in the right direction is Qualcomm (NASDAQ:QCOM) — a tech stock chosen by Paul R. La Monica.
The company — and world’s leading chip-set maker for mobile handsets — passed an ambitious stock screen La Monica ran. And so far, that screen seems to be right on the money. QCOM has climbed over 8% so far this year, barely lagging the S&P 500.
Plus, the big “Q” gave made good moves in early March: It boosted its dividend 40%, authorized more buybacks and gave a forecast for continued growth thanks to surging smartphone demand and the rise in tablet sales and other wireless technology.
More specifically, the company’s CEO expects double-digit revenue and earnings per share increases over the next five years.
Of course, for this contest, 2013 is the only year that matters. Still, Qualcomm has also already raised its full-year 2013 guidance and is only a couple bucks away from a 52-week high.
That’s a pretty solid performance just a quarter into the game.
Current Return: 10%
Investor: Louis Navellier
Also climbing up four spots over the last month is Louis Navellier’s “recession-proof” pick of Sherwin-Williams (NYSE:SHW). The company started off the year strong, but took a hefty dip in late February — possibly thanks to a few signs of housing weakness.
Since that low, though, SHW has gained back all of those losses to once again boast a year-to-date climb nearly in the double digits. Plus, the housing recovery keeps looking strong — definitely a bullish sign for the nation’s largest producer of paints and coatings.
Heck, Sherwin-Williams even has a solid track record when the economic landscape is bleak — part of the reason Navellier picked it in in the first place.
But then again, with 52-week gains of 60% in the books, one might as wonder how much further the booming company — which also recently boosted its dividend — can really climb. Of course, we still have three more quarters to find out.
Q1 Return: +13%
Investor: Jon Markman
Jon Markman — another contest veteran — has been steadily at the front of the pack so far this year. In fact, as of our last check-in, he was sitting pretty in first place.
Markman was prepared from the get-go for a rocky time in the U.S. — even though domestic equities keep looking better and better in the face of global struggles. Still, that was why he looked south for growth … and so far, the south is looking strong.
Mexico-based Fomento Economico Mexicano (NYSE:FMX) — commonly known as Femsa — is our first pick to beat the broader market thanks to a 13% three-month climb. That brings in one-year return to an impressive 48%, or around four times the broader market.
Plus, FMX’s fall to second place wasn’t really thanks to a fall in the stock — it did slip slightly in late February, but has gained 5% in the past week alone — but simply a rocket climb by the current leader … until recently, that is.
Q1 Return: +14%
Investor: Steve Freehill
Just a few days ago, Two Harbors (NYSE:TWO) was more than doubling the second-place contender. On Thursday, though, the stock opened to nearly double-digit losses, dwindling its year-to-date climb to 14%.
That’s a pretty good problem to have — a huge selloff that still leaves you in first place … just not by as much … and still ahead of the broader market. Plus, it’s especially impressive considering “expert” Steve Freehill isn’t an expert at all, but an InvestorPlace-selected reader entry.
He chose Two Harbors (NYSE:TWO) for what he said was one big reason: its eye-popping yield. On top of that, it spun off a public company by the name of Silver Bay Realty Trust (NYSE:SBY) in December — a valuable asset.
But while Two Harbors is still the leader a quarter into the contest, Freehill has to be lamenting the recent dip for another reason: He put his money where his mouth is back in December.
Still, there’s plenty of time left in the year for Freehill to pile up some more profits … and, of course, for the other nine talking heads in the contest to give him a run for his money.
As of this writing, Alyssa Oursler did not hold a position in any of the aforementioned securities.
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