2010 Stock Picks

avatar By: IS
Date posted: 01.01.2010 (5:00 am) | Write a Comment  (35 Comments)

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As I announced yesterday, I was fortunate to come out on top last year with a 82% performance for my 4 2009 picks, coming out on top of the fiendly competition with my fellow bloggers. Not that it was easy, but there is no doubt in my mind that the real challenge lies in this post, as I try to get back on top for 2010. I do intend on sticking to the same recipe that worked so well in 2009; 2 tech stocks and 2 macroeconomic ETF picks.

Next week, I will go into various picks that I did consider but did not make my list in the end, should be interesting:

My two ETF picks are based on the notion that commodities will continue to be in demand as emerging markets (especially China) regain traction. There is no doubt as well that Natural Gas has a lot of catching up to do and I believe that 2010 will be a good year for that. There is a lot of speculation on Natural Gas which makes it a bit difficult to trade (similar to crude oil) but I do see more upsize in Nat Gas than in Crude Oil.

The second one is a Nickel index ETF, one that will profit if Nickel continues its spectacular growth. I think metals and food will be as much in demand as energy commodities as things get back to normal so these picks should perform well if the economy continues its slow but gradual recovery.

Pick #1: UNG

Pick #2: JJN

I was hoping to find the next Baidu as that stock was by far the biggest reason why I won the 2009 competition. The truth of course is that those are very difficult to find. There were very special circumstances that led Baidu to be so undervalued in 2009 and I don’t see anything similar to that pattern. However, Sohu.com has a rather low P/E when you consider the growth it is experiencing and the size and opportunities of the Chinese market, so I am more than happy to jump on board. As for Google, I have written many times about the many opportunities offered to Google in the coming months and I consider the stock to be trading on the cheap side.

Pick #3: Sohu.com (SOHU)

Pick #4: Google (GOOG)

I also invite you to take a look at the picks made by my fellow bloggers here (they will be added as they are published on those blogs):

Ticker
Name
Shares
Dec 17 2013 Price
Dec 17 2013 Values
OMCOmnicom Group Inc29$69.84$2,025.36
MSFTMicrosoft Corp71$36.52$2,629.44
JCIJohnson Controls Inc39$51.32$2,052.80
PEPPepsiCo Inc/NC27$80.46$2,252.88
ETNEaton Corp31$73.45$2,276.95
DOVDover Corp23$91.21$2,189.04
ITWIllinois Tool Works Inc27$79.96$2,158.92
XLNXXilinx Inc37$44.27$1,637.81
SJMJM Smucker Co/The19$101.10$1,920.90
BLKBlackRock Inc10$302.63$3,328.93
TROWT Rowe Price Group Inc28$79.81$2,314.49
OXYOccidental Petroleum Corp21$90.21$1,984.62
COPConocoPhillips25$69.06$1,726.50
XOMExxon Mobil Corp19$96.75$1,838.25
ADIAnalog Devices Inc43$48.94$2,153.36
HASHasbro Inc31$51.53$1,597.43
MATMattel Inc42$44.70$1,922.10
INTCIntel Corp53$24.66$1,306.72
AFLAflac28$66.01$1,914.29
BAXBaxter International23$65.55$1,573.20
IVZInvesco Ltd67$34.47$2,309.49
VWOVanguard FTSE Emerging Markets28$40.27$1,127.56
BNDVanguard Total Bond Market13$80.61$1,128.54
Cash$559.12
USDP$45,928.69
SPX13.80378067$3,192.29$45,065.71

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35 Comments

  1. Pingback by 2010 ZachStocks Recommendations | ZachStocks — January 1, 2010 @ 11:55 am
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  2. Comment by Doctor Stock — January 1, 2010 @ 6:07 pm
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    Congrats and Happy New Year. It will be interesting to see where you’re Natural Gas pick ends up in 2010… definitely a bullish call on the economy for 2010.

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  4. Comment by John — January 1, 2010 @ 10:22 pm
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    Yup fierce competition! Good luck and looking forward to 2010!! It’s’going to be awesome!

    I’m curious how Sohu will perform… Hope for u it’s a good pick!

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  7. Comment by PA — January 3, 2010 @ 12:29 pm
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    Its extremely likely that you are right and I am wrong on this .. but I still think Google is not going to be able to see the growth to warrant it to be one of your four picks. Yes the economy is coming back on tracks, yes advertising will pick up, yes they are spreading into the mobile world with agility, BUT mobile web advertising is not, as far as I can see, getting them anything more than chump change for a good 2-3 years. While the recent bump in Bing’s search engine share might be contributed partially by the release of Windows 7 (with default IE search engine set to Bing), I still think with the closure of deal with Yahoo and by it gaining traction by itself, Google will have a stronger competition and won’t be able to squeeze out advertisers using the black-box method of auctioning that it has done so far. It will be fun to see how Google plays out — and it’d be a lesson for me to learn if we indeed see Google outperform S&P by say more than .. 10-15%.

    Cheers,
    PA

  8. Comment by IS — January 3, 2010 @ 5:19 pm
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    @Doctor Stock – Yes, I wasn’t sure, but to me Natural Gas still has so much upsize! Yes, bullish call… are you bearish on the economy? Like your blog by the way:)

  9. Comment by IS — January 3, 2010 @ 5:20 pm
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    @John – Thanks:) Hope so too!

  10. Comment by IS — January 3, 2010 @ 5:22 pm
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    @PA – Thanks again, love your comments, you seem to be following the same stocks as I:) Yes, actually I had no intention of picking Google but while scanning all tech stocks, I honestly could not find much better picks when comparing to valuations. Still love Baidu but at 72 P/E…? Google seems to be trading at reasonable ratios. Yes I agree, I woul not expect more than 10-15% outperformance but if that happens, I’ll be very satisfied with my pick.

  11. Comment by PA — January 3, 2010 @ 8:14 pm
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    @IS:
    Love your analysis and love reading your opinion on stocks that I follow too :)
    Btw, you made me realize an excellent point regarding Google — that it really just sits in such a sweet spot — anyone looking for an “internet economy” company will eventually land at Google — Yahoo is pretty much down the drains (atleast was .. but certainly won’t outdo Google from investors’ preference even if the stock drops 50% tomorrow); Microsoft has never been strong with anything internet (although that MIGHT be undergoing a gradual change). AMZN, CRM and EBAY are others but none have been as aggressive as Google (for the record I do think AMZN is over-stretched and should pull back .. or at most stick around this range), EBAY is not as fast a grower (in fact viewed as a slowly dying company), is not in the eyes of investors/hyped up like Google is .. etc.

    This is what increases demand for Google, more than it probably should. Nonetheless, probably bodes well given its your pick. Good luck!

    Cheers!
    PA

  12. Comment by paul chzing — January 4, 2010 @ 1:56 pm
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    If you like Nickel then have a look at a former star of the Nickel boom listed on the LSE. TOLEDO MINING (LSE:TMC) may well be set for big things shortly as the ex JP Morgan mining team have recently taken a large stake as has another big hitter in the shape of Kostyantin Zhevago, the CEO of FEREXPO (LSE:FXPO). Plenty of supply deals should come to fruition in 2010 and margins should be good if Nickel continues its recovery. I’m not usually one for buying small individual stocks and only really trade the Nasdaq and Forex but this one has been nicely recommended to me. I’ve done some research over Christmas and it does look an interesting prospect especially with JP Morgan team snapping up 25% of the company. Worth consideration for Nickel bulls.

  13. Comment by Cynical Investor — January 4, 2010 @ 8:08 pm
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    Any reason you preffered UNG over the Canadian GAS ?

  14. Comment by Mark — January 5, 2010 @ 12:04 am
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    I think you have some good picks. The only one I question is UNG since it trades the futures contracts. I think FCG would be the best way to play a rise in natural gas.

  15. Comment by IS — January 5, 2010 @ 7:29 am
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    @Paul – Will take a look, I do not generally look at LSE stocks, are you located in the UK?

  16. Comment by IS — January 5, 2010 @ 7:37 am
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    @Cynical Investor – I could have used that one but from what I understand, the natural gas used in GAS is not the same contract tracked by UNG. There are many different natural gas prices but since I’m not a specialist, I was looking for the most “common” contract and UNG would be in my opinion the best way to accomplish that. Do you hold GAS?

  17. Comment by IS — January 5, 2010 @ 7:38 am
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    @Mark – See your point, I think it’s difficult to get exposure to Natural Gas in other ways though. I did look for some pure Natural Gas stocks but could not find any attractive ones. We’ll see…:)

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  23. Comment by Cynical Investor — January 7, 2010 @ 1:40 pm
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    Initially I wanted to buy UNG but I read somewhere there was a rumor some future regulations might affect it.
    FCG was proposed as an alternative so I bought it. However, I purchased GAS as well as I thought the natural gas has lots of upside and I could not resist the temptation (no need to worry about currency conversion for this one).

    However, this upside has failed to materialize significantly.

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  25. Comment by IS — January 9, 2010 @ 8:57 pm
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    @Cynical Investor – Yes, I see what you mean but it’s very difficult to predict how these will impact the funds. i would guess it might limit their size, etc. But I doubt these would have a huge short term impact on returns. Will see, I might be wrong.

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