Over the past couple of years, a group of bloggers have enlisted in a friendly competition as to who can pick the best stocks for the year. This time around, I was a little less aggressive and picked well known names that appeared to be relatively undervalued at the beginning of the year. My top stock picks for 2011 are: VISA, Royal Bank of Canada, Husky Energy, and Encana.
My Top 4 Stock Picks for 2011
VISA (V) – Everyone knows VISA! The stock has recently sold off due to news that debit card transaction prices may be regulated in the US and VISA has a portion of their business in the debit market place. As one of the worlds most recognized names and the largest card issuer in the world, I’m betting that the stock price will bounce back. Trading price as of Jan 3, 2011: $70.38 (open).
This stock has been fairly volatile over the past 3 months. I’m still a believer that this stock will be a strong performer as a buy and hold investment. Trading price as of March 31, 2011: $73.62. Combined with a $0.15 dividend equates to a return of 4.8%. Disclaimer: I own shares of V.
Royal Bank of Canada (RY.TO) – Although Royal Bank is the largest bank in Canada in terms of market cap, it has been severely under performing relative to the other big banks in Canada. As with all the big 5 banks, RY sports a healthy dividend and I’m hoping that RY bounces back this year! Trading price as of Jan 3, 2011: $52.32 (open). Disclaimer: I own shares of RY.TO.
My feeling that RY was oversold relative to other banks appeared to have worked (for now) with a healthy bounce. Now, we’ll just have to see how this stock performs for the rest of the year. Trading price as of March 31, 2011: $59.99. Combined with a $0.50 dividend equates to a return of 15.7%
Husky Energy (HSE.TO) – I picked this one a couple years ago and I’m picking it again for some oil exposure. They own oil producing assets in NL, new assets in China in addition to paying a healthy dividend. Trading price as of Jan 3, 2011: $26.55. Disclaimer: I own shares of HSE.TO.
With oil prices on the rise, and Husky being a under performer relative to its peers, I felt that it was only a matter of time before it bounced back. At the beginning of 2011, it appeared that the stock had bottomed and ripe for picking. Trading price as of March 31, 2011: $29.46. Combined with a $0.30 dividend equates to a return of 12.07%
Encana (ECA.TO) – A little while back, Encana split into two companies to divide their natural gas and oil operations. CVE took over the oil side, and ECA took the natural gas. Last year, I picked CVE which was a winner, but this year, I’m going to try my luck with ECA. Even though I’m not bullish over natural gas prices, ECA appears cheap with low Price/Earnings, Price/Book ratios and the dividend does not hurt either. Trading price as of Jan 3, 2011: $29.09
A stock screener helped me pick this stock. I screened for low valuations along with evidence of turning bullish which turns out to be my top performer for the quarter. Too bad I don’t own this one! Trading price as of March 31, 2011: $33.53. Combined with a $0.20 dividend equates to a return of 16.02%
I’m happy to report that all four picks returned positive thus far in the year with a return of 12.16% which is good enough for 2nd place. I’m even more pleased that I have some of these stocks in my trading accounts. Here are the other results.
- The Financial Blogger: 12.41%
- Million Dollar Journey: 12.16%
- My Traders Journal: 11.77%
- Where Does All My Money Go: 5.13%
- Beating The Index: 3.08%
- Intelligent Speculator: 1.66%
- Dividend Growth Investor: 1.43%
- Wild Investor: 0.28%
- Money Smarts Blog: -1.17%
For those of you who made picks within the comments on the first stock picks post, how did you do?