Million Dollar Journey

Questrade Democratic Pricing - 1 cent per share, $4.95 min / $9.95 max

Building Wealth through Saving and Investing

Top Stock Picks 2012 – Q3 Results

Over the past few years, a group of bloggers have enlisted in a friendly competition as to who can pick the best stocks for the year.   As per tradition, we all report quarterly results to see how we are doing relative to each other, and more importantly, the market. This year, I picked a financial stock (BNS.TO), a big US consumer stock (MMM), a large Canadian minerals company (TCK-B.TO), and a well known Canadian oil company (SU.TO).

Up to the end of Q2, the portfolio returned 1.73% including dividends – not bad relative to the 0% return of the TSX.  How did Q3 turn out?  Lets take a look!

Bank of Nova Scotia (BNS.TO) – With Canadian banks retreating from their highs in late 2011, their dividend yields have reached an attractive range. Scotia Bank, with a current yield of approximately 4%,  is known for their international operations and I believe has some upside coming in 2012.  That is providing that we don’t have a global financial meltdown. :) Trading price as of closing Dec 30, 2011: $50.83. Disclaimer: I own shares of BNS.TO.

Even though the first half of the year was volatile, at the end of Q2, BNS returned 5.92% including dividends.  With things turning brighter, stocks generally moved up in Q3. Trading price as of September 30, 2012: $53.92. Combined with a $1.67 dividend equates to a return of 9.36% after Q3 2012. Disclaimer: I own shares of BNS.TO.

3M Co. (MMM) -  This company is a great example of a Dividend Achiever where it has increased their dividend for 53 consecutive years with a current yield of 2.69% and P/E ratio of 13.74.  Who is 3M?  They are a  large diversified technology company with seven large divisions.  However, they are likely most well known as the inventor of the Post-It note.  3M shares sold off in late 2011 but it looks like the stock has already started its recovery.  Trading price as of closing Dec 30, 2011: $81.73. Disclaimer: I own shares of MMM.

I picked this one to get exposure to the US market and that it appeared oversold at the beginning of the year.  This one has been a winner as the US market remains strong, especially for top US dividend stocks. Trading price as of September 30, 2012: $92.42. Combined with a $1.77 dividend equates to a return of 15.25% after Q3 2012. Disclaimer: I own shares of MMM.

Teck Resources (TCK.B.TO) -  Teck Resources is my mineral play where the company is engaged in the exploration, development and production of copper, coal, gold and zinc.  It faced a steep decline in 2011 and I believe will start climbing again once confidence in the economy thus commodities returns. Teck currently yields 2.23% with a P/E ratio of 8.92. Trading price as of closing Dec 30, 2011: $35.91. Disclaimer: I own shares of TCK.B.

The most volatile stock in the portfolio has continued to drag down the others. Trading price as of September 30, 2012: $29.01 combined with a $0.40 dividend equates to a return of -18.1% after Q3 2012. Disclaimer: I own shares of TCK-B.TO.

Suncor Energy (SU.TO) -  Suncor Energy is Canada’s largest integrated energy company.  It has a large stake in the oil sands and is involved in numerous other energy plays across the country. While this is not a huge dividend stock with a yield of 1.50%, I believe that the energy sector is oversold and has a large upside should the buyers return.    Trading price as of closing Dec 30, 2011: $29.38.Disclaimer: I own shares of SU.TO.

Canadian oil stocks picked up a bit in Q3 which helped prop up Suncor’s gain by about 10%.  Trading price as of September 30, 2012: $32.34. Combined with a $0.37 dividend equates to a return of 11.33% after Q3 2012. Disclaimer: I own shares of SU.TO.

While the portfolio beat the TSX in Q2, it has become a laggard in Q3.  Overall, the portfolio has returned 4.46% year to date, with the TSX returning approximately 6% including dividends (via XIU.TO). The SP500 has been on a tear through three quarters returning 15% including dividends (via XSP.TO).

Net worth update coming up on Wednesday!

Here are the the picks and results from the other bloggers:

  1. Where Does All My Money Go: 21.99%
  2. Intelligent Speculator: 17.52%
  3. My Traders Journal: 10.67%
  4. Dividend Growth Investor: 10.39%
  5. Dividend Mantra: 5.32%
  6. Million Dollar Journey:  4.46%
  7. The Passive Income Earner:  1.34%
  8. Wild Investor: -2.21%
  9. The Financial Blogger: -11.04%
  10. Beating The Index: -13.77%






11 Comments, Comment or Ping

  1. 1. Joe S

    Based on benchmarks, it looks like only 4 of 10 beat the TSX and 2 of 10 beat the S&P 500. Tough year…

  2. 2. abraxas

    Looking at your results it’s quite obvious you’d be better off indexing with a diversified portfolio. Have you considered something unique like the Harry Browne Permanent Portfolio (i.e. 25% stocks, 25% LT bonds, 25% gold, 25% short term treasuries)? I have had good luck with it.

  3. Yep, stock picking can be tough, no doubt. Note that this is meant to be a game, not many investors would base their portfolio on 4 stocks. For me, a large portion of my portfolio is indexed (in registered accounts), but I do have leveraged dividend portfolio as well.

  4. 4. SST

    “Overall, the portfolio has returned 4.46% year to date, with the TSX returning approximately 6% including dividends (via XIU.TO). The SP500 has been on a tear through three quarters returning 15% including dividends (via XSP.TO).”

    Year-to-Date
    Gold: 13.5%
    Silver: 24.5%

  5. Great picks! I understand how tough it is in picking which company to invest your money with.

  6. 6. Doug Willson

    CMG.TO is amazing.
    Won’t be long till it is worth 1 Billion
    Look up its chart and dividend history on google finance or whatever.

    Every year’s stock price and earnings is much higher than the last. It reaches All Time High after All Time High.

  7. 7. SST

    CMG: 55% annual average return since 1999.

    Nice.
    Of course all parabolas are subject to collapse.

  8. Thought I’d run mine since I started out picking stocks for this contest but then got lazy tracking them. Anyway, my selection of BAC, RIMM, FAS, UPRO is up by my calculation 30.8% to the end of the 3rd quarter. What’s really interesting is that I only hold one of them (BAC), but my portfolio was up almost exactly the same amount (in Canadian Dollar terms anyway) than the 4 stocks I picked. Talk about a coincidence!

    Keep up the good work.

  9. @EngineeringIncome – congrats on the picks! What other stocks do you like?

  10. I think BAC is still very undervalued for anyone with a few years investment horizon. Similarly AIG. I think the US market as a whole isn’t as undervalued as in January so I’m currently not a big fan of the index ETFs I used (UPRO & FAS) for new investment dollars.

    The rest of my portfolio is a smattering of DELL, DWA, BRK.B, and DNB picked up at varying prices. Of those, DELL currently seems the most undervalued to me, though the technology space is always a tough one for investors. BRK.B probably has the best downside protection due to the Buffett put. I also think FFH.TO also looks attractive at these levels for those who want a buy and forget stock.

  11. @EngineeringIncome – thanks for the tips!

    Trackbacks

Reply to “Top Stock Picks 2012 – Q3 Results”

Subscribe without commenting



Get the Latest

      

Money Tips Newsletter

Premium Sponsors



Recent Comments

  • The Passive Income Earner: @David DLR and DLR.U does not change exchange. They both trade on the TSX. With RBC Direct...
  • David: I was just checking with Questrade, and they told me it can take 3 business days to journal the shares over,...
  • Arun: Great advise for new investors.You already touched on everything. My advise is set a long term goal, and create...
  • Kapitalust: Bravo, you essentially touched on everything important for the beginner investor! To truly even...
  • MichaelQ: I just saw a comment from Michael at July 29th, 2014 at 3:00 pm, I am a different Michael. Let me address...
  • Michael: I have been reader of the site for over 3 years but this is the first time I write a comment. I apology in...
  • S: I’ve seen the merits of XIC and VTI discussed/mentioned on BNN. I don’t own any index ETFs and I...
  • Michael: I think SST comments have to be moderated. More often than not, they just annoy people. I only come to this...
  • Goldberg: I usually like SST’s comments but this is silly. The fact is that the market has existed for a long...
  • Tawcan: All great points. I’m always surprised that people are willing to pay high MER fee for mutual funds...
 css.php