January 3rd, 2013 
Category: 
It’s time to update the rankings for our friendly stock picking competition. Each blogger picked 4 stocks (or ETFs) they think will outperform in 2012. 2012 results are a disaster placing me very comfortably at the bottom of the pack.
Eagle Energy Trust (TSE:EGL.UN)
2012 ROI = -14.98%
Eagle Energy Trust turned out a big disappointment thanks to their production miss in Q3. The COO ultimately paid the price but the damage is done. Among the Canadian trusts, EGL is no longer on the top; it has been replaced by Argent Energy Trust which I will discuss later in the month. At current oil prices Eagle can still afford its generous yield and is nowhere near pulling a Parallel Energy Trust on investors just yet. I expect the company to exploit any recovery in the share price by hitting the market again and increasing its production through an acquisition.
Poseidon Concepts (TSE:PSN)
YTD ROI = -87.00%
Poseidon Concepts did just fine in the first half of the year and I initially picked the stock believing it would outperform its sector. Little did anyone know that a mine was about to explode and shatter the company into smithereens. The account receivables fiasco pretty much killed the company and its dividend. PSN mentioned numerous times it was working on diversifying its customer base and entering other sectors. Turns out it was smoke and mirrors.
The only positive I can find here is that I was never able to bring myself to buy PSN in any of my accounts. Even though I felt somewhat left out from all the excitement, the 1 trick pony attribute always blocked me. Since the fluids handling market is still in expansion I opted for Strad Energy in my portfolio for that exposure because of its diversified business segments.
Palliser Oil and Gas (TSXV:PXL)
YTD ROI = -22.89%
Palliser Oil and Gas is a 98% heavy oil producer so it naturally got clobbered thanks to widening heavy oil differentials and lower oil prices. Canadian oil producers are losing millions of dollars every day because the oil exported to the US is getting “Cushinged” ie too much oil landlocked at the Cushing export terminal is depressing Canadian prices relative to WTI which in turn sells at a discount to Brent. Palliser will confirm its 15th consecutive quarterly growth by the end of January. The stock is in recovery mode which simply highlights the seasonality of the sector. Can’t really blame PXL for the sector not being favored, Canadian Natural Resources which is a senior producer multiple times its size lost 24% in the past year!
Second Wave Petroleum (TSE:SCS)
YTD ROI= -81.37%
Second Wave Petroleum has a great land position at Swan Hills targeting the Beaverhill Lake Group. It was added because it had unsolicited expressions of interest. Unfortunately, the takeout did not materialize and the share price got destroyed bringing my ROI down in the process. I took a gamble on the buyout and it did not work, it’s that simple. Last year it was SKW and BWD that scuttled my results, this year it’s SCS and PSN.
Not a pretty sight!
As you can see from the chart above, SCS and PSN totally collapsed. When I first posted my picks last January, I ended the post with the following paragraph:
“Of course, there is no guarantee that these stocks will outperform the competition. Remember that they will not be actively managed (bought and sold repeatedly depending on opportunities). It is simply a matter of buying on Jan 3rd, 2012 and selling on December 31, 2012.”
This is a sector where you HAVE to be pro-active: cut losses and take profits when dealing with companies like SCS and PSN (non-diversified emerging play/technology with lots of hype.) That of course was not possible!
The competitors also posted their top picks along with the results:
Where Does all My Money Go 35.64%
Million Dollar Journey 12.69%
My Traders Journal 8.63%
Dividend Growth Investor 8.26%
Wild Investor 6.88%
Dividend Mantra 6.05%
Intelligent Speculator 6.04%
The Passive Income Earner 5.87%
The Financial Blogger -10.78%
Beating The Index -51.56% (ouch!)
[...] Beating The Index -51.56% [...]
[...] -51.56% Beating The Index [...]
Hey Mich,
So glad I missed the initial run on PSN and I just let it go as obviously dodged a bullet there.
If your doing this picking again I would suggest MMT,DCK, and maybe TAO or NZ as it appears (fingers crossed) they’ll FINALLY be drilling the East Coast lands to see what the story is. IF these lands are commercially productive there could be a big run up on their SP’s.
Just my 2 cents.
WC
WC,
I share your feelings on PSN as missed the initial run as well!
It’s probably why I added it virtually in the list
I totally agree with you on the picks, I hope DCK floats lower back to $2 as this is a play on land basically. I have a position in NZ, this is the east coast shale year, there will be a decent run-up when the drilling starts.
Cheers,
Mich
Ach, what’s a stock picker to do?
On the bright side, just another buying opportunity with PXL, taking the long view!
101, the long view is not that far out as new demand for Cdn heavy oil will kick in in the middle of the year. The capital gains potential kicks in in the second half of the year imo. (got to get through the debt ceiling drama first
[...] Beating The Index: -51.56% [...]
@Mich, Happy New Year! I think 2013 is gonna be a great year for resource stocks. My portfolio is already showing tremendous improvement–well, once I actually get tender of my PBN shares (@1.1051 per share of PBG–I had so much PBG that one of my accounts went into a margin call as a result of the 90% drop in share price). Also, my WCP is up 10% since the beginning of the year. Nice.
Again, I think it’s gonna be a great year.
And folks, don’t forget to add some physical gold and silver to your portfolio. Once they mint that $1 trillion dollar platinum coin, precious metals will be the only money left standing, as it will prove that the US dollar cash is trash.
Thank you Peter and Happy New Year!
Congrats on your investment success with PBG. I don’t know about 2013 being a great year given more government malaise is on the way
My guess is a recovery in the second half of the year, but I sure hope you’re right and I’m wrong. It hasn’t been great for mining neither, it has been out of favour as well.
All the best for the new year.
Mich
[...] 2012 Stock Picking Contest Results on Beating The Index [...]