The markets seem to be suffering from a monthlong New Year’s hangover … and it’s showing in our 10 Best Stocks for 2014 contest.
The S&P 500 slid almost 4% in January, and most picks for our Best Stocks for 2014 contest had a hard time shaking that southbound breeze. As a result, only three picks are are even sitting in the black, while a few are actually suffering double-digit losses.
Still, the finish line remains a long way away … so leaders can’t get too confident or laggards too discouraged by the standings after a mere four weeks. A lot can change over the course of 11 months … and perhaps the only guarantee at this stage in the game is that a lot will.
Still, let’s take a look at how the entries stack up for InvestorPlace’s 10 Best Stocks for 2014 contest with a month in the books:
#10 in the Best Stocks for 2014 Contest: MTN Group (MTNOY)
Investor: Charles Sizemore
YTD Return: -17%
Charles Sizemore is sitting in an unfamiliar position just a few weeks into our Best Stocks for 2014 showdown. See, Sizemore isn’t just a contest veteran … but a contest superstar.
His pick of Daimler (DDAIF) won the 10 Best Stocks of 2013 contest with an eye-popping 65% climb, his pick of Turkcell (TKC) got nudged out of the top spot by a mere nose the year before, and his pick of Visa (V) won the prize in 2011.
That’s a far cry from where his 10 Best Stocks for 2014 entry of MTN Group (MTNOY) is sitting. While the African market might have “virtually unlimited growth potential,” according to Sizemore, investors have been skittish in the face of MTN Group’s falling revenue share in that market. So far in 2014, shares of MTN Group have lost 17% — four times more than the broader market’s slide.
#9 in the Best Stocks for 2014 Contest: Fortegra Financial (FRF)
Investor: Hilary Kramer
YTD Return: -14%
Another struggling entry in our 10 Best Stocks for 2014 race is Fortegra Financial (FRF), hand-picked by Hilary Kramer. Just a month into the contest, FRF stock has slid by 14% … including a painful 4% loss last Friday alone.
Kramer liked that Fortegra Financial management has solid growth plans and is cutting costs … but other experts don’t agree. Zacks Equity Research, for example, recently downgraded FRF stock to a “strong sell” and called the company’s goals of expansion “delusionary.”
Still, while FRF stock has a pretty solid hole to dig out of, it just might have an ace up its sleeve. Remember, the main reason Kramer chose Fortegra Financial for the 10 Best Stocks for 2014 race was the fact that it could be buyout bait.
After Fortegra’s ugly start out of the gate, it could use an M&A whisper or two.
#8 in the Best Stocks for 2014 Contest: Citigroup (C)
Investor: Greg Harmon
YTD Return: -11%
Financials were a pretty popular theme for the 10 Best Stocks for 2014 contest. Unfortunately, all three picks in the sector are currently sitting in the red … with Greg Harmon’s pick of Citigroup (C) faring the worst.
Originally, Harmon was bullish on Citigroup stock for the one-two punch of fundamental tailwinds for financials and strong technicals for C stock in particular. I guess he didn’t anticipate a one-two punch in the other direction. Between broader market weakness and yet another earnings miss, Citigroup stock has fallen around 8% since the start of 2014.
More specifically, a mid-January release showed adjusted earnings per share tallied 82 cents in the most recent quarter, while analysts were expecting 95 cents. Citigroup stock fell more than 4% on the release, and has continued a slow downward slide ever since.
#7 in the Best Stocks for 2014 Contest: FleetCor Technologies (FLT)
Investor: Louis Navellier
YTD Return: -11%
Different stock, same story … kind of. FleetCor Technologies (FLT) is yet another pick in our 10 Best Stocks for 2014 contest that has been suffering from a slow-and-steady decline so far this year.
But FLT stock is unique in that it’s cooling off from a downright killer 2013 run — unlike the first three stocks on this list. Last year, shares of FleetCor Technologies more than doubled … and the year before that they bagged a 75% climb.
What does FLT do that’s proved so lucrative for shareholders? Well, FleetCor Technologies provides private-label fuel credit cards to gas station operators and owners of vehicle fleets, covering millions of cardholders across North America, Europe, Africa and Asia.
If the broader market starts moving in the right direction, don’t be surprised if FLT stock starts moving toward the top of the 10 Best Stocks for 2014 heap.
#6 in the Best Stocks for 2014 Contest: Banco Santander (SAN)
Investor: Bryan Perry
YTD Return: -8%
Our next entry for the 10 Best Stocks for 2014 contest is a high-yield play, as Banco Santander (SAN) currently pays out more than 9% in dividends.
SAN stock is sitting around 8% in the red year-to-date. But unlike several picks on this list, it has more than a monthlong downward trend to reverse. Remember, Banco Santander is the largest bank in the eurozone … meaning its stock has been battered down big-time in the wake of the region’s ugly recession.
Of course, those struggles translate to potential, if you ask Bryan Perry. He originally picked Banco Santander because he thinks the monetization of write-offs and heavy intervention from the European Central Bank could carry SAN stock around 40% higher … which would definitely carry him higher in the top five of our 10 Best Stocks for 2014 race.
#5 in the Best Stocks for 2014 Contest: Vanguard Dividend ETF (VIG)
Investor: Brendan Conway
YTD Return: -7%
For expert Brendan Conway, choosing a non-aggressive play for the 10 Best Stocks for 2014 race has put him exactly where one would expect: in the middle of the pack. Conway chose the Vanguard Dividend Appreciation ETF (VIG), figuring it would protect him from steep losses and come out ahead of any busted momentum stocks.
So far, though, tapering and the expectation of rising interest rates has sent many investors fleeing dividend funds like VIG. Year-to-date, the dividend ETF has fallen 5% … slightly wider than S&P 500’s losses.
That’s not to say this dividend ETF couldn’t get back on track, especially considering it’s more than just a bundle of stodgy old income plays. But VIG does have a hole to dig itself out of just to break even … and a lot of moving to do if it wants to catch the leading momentum play in our Best Stocks for 2014 contest.
#4 in the Best Stocks for 2014 Contest: Financial SPDR (XLF)
Investors: John Jagerson and Wade Hansen
YTD Return: -6%
Once again, you’ve likely noticed — especially if you’ve been following out 10 Best Stocks for 2014 contest from Day One — that financials have been popular picks this year. But not all entrants wanted to pick just one financial stock.
Instead, John Jagerson and Wade Hansen decided to make a broader bet on financials via the Financial SPDR (XLF), a financial ETF from State Street Global Advisors.
So far, that bet has turned out alright. The Financial SPDR is currently sitting on just 4% losses and in fourth place. Plus, financials have been leading the S&P 500 in earnings growth … and it might just take a broader tailwind for that solid growth to translate into solid gains for this financial ETF.
#3 in the Best Stocks of 2014 Contest: Emerge Energy Services LP (EMES)
Investor: Jon Markman
YTD Return: +1%
The next entry in our 10 Best Stocks for 2014 contest is our first pick sitting in the black. Emerge Energy Services LP (EMES) — a $930 million oil and gas services company headquartered in Fort Worth, Texas — has gained 1% year-to-date, putting it ahead of the broader markets.
Markman chose EMES stock for the Best Stocks for 2014 race because it processes fuel and sand. Why should you care about sand? Well, sand is a key material for fracking — a process that has led to our nation’s recent natural gas boom. Meanwhile, the fuel segment provides a strong foundation for EMES earnings.
For the cherry on top, Emerge Energy Services is a master limited partnership … one that currently yields more than 8%. Don’t be surprised if that sweet payout turns out to be just the extra boost EMES stock needs to move up from its bronze-medal spot.
#2 in the Best Stocks for 2014: ProShares Short MSCI Emerging Markets ETF (EUM)
Investor: Anthony Mirhaydari
YTD Return: +12%
Turmoil in emerging markets has been a dominant headline so far in 2014, and trouble in China particularly has been a large reason for bearish sentiment across the board.
That’s good news for Anthony Mirhaydari, though, considering his 10 Best Stocks for 2014 entry was an explicit bet against emerging markets. The Pro Shares Short MSCI Emerging Markets ETF (EUM), as the name implies, aims to return two times the inverse performance of the iShares MSCI Emerging Markets ETF (EEM).
So with emerging markets getting hammered, EUM has been moving steadily in the opposite direction … racking up 12% gains and a second-place standing in the process.
Of course, most folks who bet on an inverse ETF don’t have a preset time horizon of 12 months. And because the fund doubles the inverse performance of the EEM, just the slightest emerging-market recovery could send this pick sliding from second in the blink of an eye.
10 Best Stocks for 2014: Tesla Motors (TSLA)
Investor: Kyle Woodley
YTD Return: +17%
Contest first-timer Kyle Woodley isn’t just off to a stellar start, but he’s waving to all the haters from his first-place perch. Considering Tesla Motors (TSLA) gained more than 300% last year, plenty of folks had to be scratching their heads at his ballsy momentum pick.
So far though, the “go big or go home” attitude has paid off. Tesla stock raced out to an early and impressive lead, posting a 17% year-to-date return even as the markets bled red.
Of course, as we mentioned at the start of this recap, the 10 Best Stocks for 2014 contest is a marathon … not a sprint. While Tesla stock has maintained a breakneck pace during the first leg of the race, there’s still plenty of time for it to run out of gas. Or crash and burn like a Model S. Or whatever car pun you want to use for “the higher you climb, the further you fall.”
It’s still early in our 10 Best Stocks for 2014 showdown … and there’s plenty of time for TSLA haters to be proven right.
As of this writing, Alyssa Oursler did not hold a position in any of the aforementioned securities.