Since a portion of my portfolio is active stock selections, I thought it might be fun to compare the stock selections, that I’ve been investigating, against other investors.
Financial Uproar has included me in his annual stock picking contest.
Now because we are following the returns of only four stocks over the course of a year, the results are subject to a good portion of luck. I like these contests as an educational exercise. Looking at the stock selections of others, can give an investor ideas that he may wish to investigate further.
I’ve decided to select four stocks that I hope will have strong price appreciation (growth) over the coming year. There’s hardly any dividend here to speak of.
For a contest such as this, the preference might be to select small, penny stocks, in the hopes of getting quick gains. However, I’ll make selections, using a similar manner as I would in my ‘real’ portfolio. My selections are all large cap stocks. In fact, three of the stocks are in the S&P 500 index. When the year is over, I’ll compare my results to the benchmark S&P 500, to see how I did.
Here are my 2013 stock selections.
Jabil Circuit Inc. (JBL)
– Well diversified technology company. Profits come from many divisions (including one that manufactures aluminum casing for the Apple iPhone)
– EPS growth over the past five years is almost 40%.
– Great forward looking PEG ratio.
– P/S is a miniscule 0.22
Joy Global, Inc. (JOY)
– Undervalued Industrial goods company, with a P/E of under 9.
– High increased sales quarter-to-quarter.
– Good return on Assets
Laboratory Corp. of America (LH)
– Low Price/Free Cash Flow for this medical lab company.
– At low end of it’s historical P/E range.
– Contrarian pick. Analysts hate this stock. Therefore, I like it to surprise on the upside.
Tempur Pedic International Inc. (TPX)
– High-end bedding market. Suffered large price drop in spring 2012. Price should recover.
– Waiting for Federal Trade Commission (FTC) to approve the purchase of Sealy Corporation. This could give them pricing advantages.
– Low Price/Free Cash Flow.
– Good return on Assets.
[Disclosure: The author may own securities mentioned in this post. Perform your own due diligence before investing.]