2012 Stock Picking Contest: Q1 Results

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. Q1 results are somewhat OK for me given that most energy stocks dipped in the second half of March.

Eagle Energy Trust (TSE:EGL.UN)
YTD ROI = +14.45% 
Eagle Energy Trust has been a great stock to hold so far thanks to strong WTI oil prices. In my opinion, this is by far the best oil weighted dividend payer because the company has 100% oil production, no debt and its total payout ratio is below 100%. That’s not to mention the generous yield which even at this price level surpasses 9%.

Poseidon Concepts (TSE:PSN)
YTD ROI = +14.78%
Poseidon Concepts dipped in the second half of March following its results based on rumors one of its tanks failed in operations and potentially some disappointed investors a dividend increase was not announced. I still believe in PSN outperforming this year and sure hope the price trends lower during break up as it will be a great opportunity to add some. In my opinion, PSN is a winner and the competition will have a tough time breaking into its market.

Palliser Oil and Gas (TSXV:PXL)
YTD ROI = -9.64%
Palliser Oil and Gas was my negative performer for Q1 and the company is not to be blamed in any way. Widening heavy oil differentials have undermined the stock’s performance. 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. I believe this is temporary and expect PXL to  finish the year a lot higher than this level.

Second Wave Petroleum (TSE:SCS)
YTD ROI= +23.95%
Second Wave Petroleum has a great land position at Swan Hills targeting the Beaverhill Lake Group and has been ramping up its production nicely until it announced unsolicited expressions of interest. Chances are, SCS will be gone this year and at a higher price than what it is trading at. This should provide the ROI with a nice boost unless the sale of the company fails to materialize.

“Selling in May” started in the second half of March

As you can see from the chart above, PSN and SCS hit their highs in the first half of March. Had their stock prices held, I would have sat comfortably in second place. Alas, it looks like selling in May has started early this year. However, I do expect further upside from here as SCS is on the block for sale and could be gone by the end of Q2. PSN simply has to confirm its continued growth which will be rewarded during the year. PXL shall recover as heavy oil differentials narrow down, I’ve seen it every year and these situations are always temporary. Eagle Energy might have a very nice catalyst this year that I will discuss later on once I confirm my thoughts. Finally, I am not satisfied with my position and expect to end higher later this year unless some European nation goes into ADD again!

The competitors also posted their top picks along with the results: