Top Stock Picks 2011 – Q2 Results

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.

We did very well in Q1 returning 12.16% including dividends.  With a correction in the 2nd Quarter though, a lot of the picks went down with the index.  Lets have a look at the numbers to assess the damage.

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).

While this stock returned 4.8% in the first quarter, the stock retraced a bit in the second quarter but a lucky break in the last week of June brought high volume buying.  Trading price as of June 30,2011 closing:  $84.26 .  Combined with a  $0.30 dividend brings a gain of 20.19% year to date. 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.

Royal Bank pulled back into the mid 50’s again in the second quarter, perhaps because of their news of closing a portion of their U.S operations and putting more focus on capital markets.  Regardless, we are still up for the year thus far.  Trading price as of June 30,2011 closing:  $55.13 .  Combined with a  $1.00 dividend brings a gain of 7.24% year to date

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.

Oil and commodities in general have been under attack in the second quarter which means the energy sector pulled back quite aggressively.  The 12% gain in the first quarter was virtually wiped out, but the dividend kept us in the positive.  Trading price as of June 30,2011 closing:  $26.30 .  Combined with a  $0.60 dividend brings a gain of 1.12% year to date.

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

With Encana being a natural gas play, same story here on the commodities pull back.   The second quarter sell off wiped out most of the gains in the first quarter.  Trading price as of June 30,2011 closing:  $29.78 .  Combined with a  $0.39 dividend brings a gain of 3.70% year to date.

For two quarters in a row I’m happy to report that all four picks returned positive thus far in the year with an overall average return of 8.06%.  Not bad considering the S&P/TSX 60 Index (XIU) has returned about 0% including dividends year to date.  I’m even more pleased that I have some of these stocks in my trading accounts.

Here are the other results.

  1. Intelligent Speculator: 9.35%
  2. Dividend Growth Investor: 8.89%
  3. My Traders Journal: 8.67%
  4. Million Dollar Journey:  8.06%
  5. Where Does All My Money Go: -1.01%
  6. The Financial Blogger: -3.74%
  7. Money Smarts Blog: -5.72%
  8. Wild Investor: -7.69%
  9. Beating The Index: -12.01%

Some of the Canadian Money Forum members are having their own stock picking contest, and some of them are doing much better than the bloggers listed! For those of you who made picks within the comments on the first stock picks post, how did you do?

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FT is the founder and editor of Million Dollar Journey (est. 2006). Through various financial strategies outlined on this site, he grew his net worth from $200,000 in 2006 to $1,000,000 by 2014. You can read more about him here.
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Joe S.
10 years ago

4 of 9 bloggers were able to beat XIU (0.3%). Large margin for error of course, but find that number to be amazingly consistent during this competition over the years.

It is also consistent with the number of mutual funds that beat the index on a given year (i.e. 4 of 10, give or take).

10 years ago

Am I the only one who finds it hilariously ironic that “Beating the Index” blog is currently sitting at -12.01%? To be fair, I haven’t read this blog but it seems like either intentional or not, they are proving the point that picking stocks doesn’t always outperform the indexes!

10 years ago

I’ve been riding the ETF train for a while and doing reasonably well – the only stock I own is Riocan, and watch it like a hawk to make sure those dividends are stable (ie. AFFO exceeds dividend). Recently however I cashed out of my US ETF (SPY) and put some of the money into an ultrashort industrial ETF (SMN). My research indicates the summer is going to be a bumpy ride for the markets, particularly in basic materials/industrials (real industrials, not DJIA). Time will tell if it’s the right move – I like to think I’m getting better at this but have to admit my choices haven’t always been the best in the past!

10 years ago

If we had done this in May I’d be at 8% — but June wasn’t good for me! 3.79%

This is the annoying part … if I picked a finance preferred ETF my return would be 6%