2011 Stock Picking Contest: Q2 Results

Earlier this year I was invited by fellow bloggers to a friendly stock picking competition where each blogger picks 4 stocks (or ETFs) they think will outperform in 2011. Well the Q2 results are out and they’re embarrassing not so good given what the oil and gas sector is going through since March.

Rank Site YTD Return (%)
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 -5.72%
8 The Wild Investor -7.69%
9 Beating The Index -12.01%

Stock Picks Review
Skywest Energy (TSXV:SKW)
YTD ROI = -28.26%
SkyWest, the Cardium focused junior company, lost its sex appeal and got hammered with its peers in the junior sector. The company continues to develop its land and increase its production which should reflect positively on the share price by the end of the year. Patience is required not only with SKW but with all of the junior players in the sector.

Arcan Resources (TSXV:ARN)
YTD ROI = -4.05%
Investors have been showing ARN the love lately as the Beaver Hill Lake play at Swan Hills gets more and more attention. With billions of barrels of original oil in place and a great land package in the area there’s no doubt ARN stands a good chance of getting taken out by a bigger player. The play is heating up and I expect ARN’s price to be green in the next contest update.

Bowood Energy (TSXV:BWD)
YTD ROI = -27.50%
BWD has not released the results of its first well in the Alberta Bakken which is disappointing. The play is officially commercial; DTX confirmed it by releasing the first results of 250 bod + 250 boep in gas. There’s no premium given to anyone in the Alberta Bakken in this market as all the juniors are getting hammered. The question is: how will BWD’s results compare to DTX?

Reliable Energy (TSXV:REL)
YTD ROI= +11.76%
REL really shined last quarter when it hit +50% ROI for the year but the deluge that enveloped southwestern Manitoba and southeastern Saskatchewan this spring really swept those gains away. You almost need a submersible drilling rig to operate in that environment. Some production has been shut down, drilling has been delayed and there’s a chance the company might miss its exit guidance for the year (again). Montana remains a wild card that could be a huge catalyst if positive results are released.

Let’s put it bluntly: all of these stocks were trading higher when oil was in the low 90′s or high 80′s. The whole sector got hammered as oil prices soared thanks to all the black swan events we had to go through. What do you expect when your picks are all small caps in 1 sector, you either trail everyone or lead everyone in this contest. Hopefully, it’ll be the latter by the end of the year.

The global economy is going through turbulence thanks to a sluggish recovery in the US and all the debt drama in Europe. I believe we will get through these problems: Europe is working on a solution with Greece; oil prices will stabilize at an acceptable range and positively impact economic data in Q3 which in turn will support the US Economy. The can will have to be kicked further down the road by a higher debt ceiling in the US giving investors the chance to focus on something else for a change.

Even though I am sitting at the bottom of the list, I am still confident in my picks based on my investment thesis for each stock as long as the global economy doesn’t slip back into recession because of some black swan event. I am calling the bottom here with the Q2 results and expect my ROI to rise starting in Q3. The bet is on for the YE results in this competition.