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. Q2 results are a disaster reflecting the beating the energy sector received.
Eagle Energy Trust (TSE:EGL.UN)
YTD ROI = +2.34%
In my opinion, Eagle Energy Trust is by far the best oil weighted dividend payer because the company has 98% oil production and little debt. However, its total payout ratio will end up above 100% this year due to lower oil prices. I still believe the company will be able to afford its generous yield in 2013 using $85 WTI oil and 4,000 bopd. EGL only faces the discount to Brent contrary to the Canadian producers facing double discounts.
Poseidon Concepts (TSE:PSN)
YTD ROI = +4.50%
Poseidon Concepts has also been abused in Q2. I still believe in PSN outperforming this year and the current share price is potentially 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 which is still on the path of growth. Furthermore, management is working on diversifying its customer base by entering other sectors.
Palliser Oil and Gas (TSXV:PXL)
YTD ROI = -42.17%
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. I still believe this is temporary and expect PXL to finish the year higher than this level if oil prices settle in the 2nd half of the year.
Second Wave Petroleum (TSE:SCS)
YTD ROI= -65.02%
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. Unfortunately, the takeout did not materialize and the share price got destroyed bringing my ROI down in the process. It’s going to take some time to recover from this low which pretty much undermines my ranking in this contest until the end of the year. I took a gamble on the buyout and it did not work, it’s that simple.
As you can see from the chart above, SCS and PXL totally collapsed in Q2. Europe’s debt woes combined with widening oil differentials and lower oil prices destroyed the sector. I still hope for a partial recovery in the second half of the year especially if the market gets reassured a bit on Europe and if oil prices stabilize.
The competitors also posted their top picks along with the results:
|Rank||Site||Q2 2012 Return (%)|
|1||Where Does All My Money Go||13.34|
|4||Dividend Growth Investor||4.89|
|5||Million Dollar Journey||0.69|
|6||My Traders Journal||-1.37|
|7||The Wild Investor||-7.73|
|8||The Passive Income Earner||-5.65|
|9||The Financial Blogger||-13.15|
|10||Beating The Index||-26.55|