Portfolio manager and publisher of investor newsletters, including The Successful Investor (TSINetwork.ca)
The Pick: EnCana Corp.
Dec. 31 close: $34.11
The Rationale: Investors tend to underrate EnCana in relation to its per-share cash flow, because they see it as just another gas stock. Its gas wells are costlier to develop than average, but likely to last longer. Investors shied away from EnCana last year due to a buildup in gas reserves and a drop in gas prices. But recent cold weather in the U.S. could lead to a shrinkage in gas reserves, rising gas prices, and improved earnings for EnCana.
Senior technical analyst, Phases & Cycles
The Pick: Gammon Gold
Dec. 31 close: $11.61
The Rationale: Gammon Gold recently had a breakout from a large, bullish technical pattern (an Inverse head-and-shoulder). This formation supports significantly higher targets (the initial Point & Figure target is $14). In addition, given that Gammon is a gold stock, and given the positive long-term bullish outlook on gold, Gammon is likely to perform very well.
Director of research, Odlum Brown
The Pick: JPMorgan Chase & Co.
Dec. 31 close: $41.67 (U.S.)
The Rationale: Canadians should make 2010 about diversifying beyond our borders, as value is getting tougher to find in Canada. JPMorgan trades at half the price-to-book value of the big six Canadian banks and therefore has much better long-term promise. Our enthusiasm toward the stock is a function of the company's excellent management, market leading businesses and "fortress" balance sheet.
Portfolio manager, KCM Wealth Management
The Pick: Citigroup Inc.
Dec. 31 close: $3.31 (U.S.)
The Rationale: It's an out-of-favour stock. As it gets its business plan back in line, it should participate in a banking uplift within an improving economy. I see considerable upside. That's the contrarian in me.
Retired individual investor
The Pick: Agrium Inc.
Dec. 31 close: $65.42
The Rationale: This fertilizer stock has already made a great comeback in the last few months as the outlook for future fertilizer use by farmers in 2010-11 has brightened. As the price paid for agricultural products continues to rise in 2010, the world's farmers can be expected to purchase and apply fertilizer in greater quantities to maximize their crop output - pushing up the demand for (and price of) Agrium's staple product.
Host on Business News Network
The Pick: EnCana Corp.
Dec. 31 close: $34.11
The rationale: The company will do well on any recovery in natural gas prices, especially if natural gas demand picks up from "other applications" like natural-gas fuelled cars. More importantly, it's a possible take-out candidate, or at least should rise because people "think" it is a take-out candidate.
Blogger at Canadiancapitalist.com
The Pick: Berkshire Hathaway Inc.
Dec. 31 close: $3,286 (U.S.)
The Rationale: Since inception, Berkshire has outperformed the S&P 500 by a stunning 11-per-cent margin, but 2009 was a rare miss. Berkshire underperformed the S&P 500 by 26 percentage points last year. With Warren Buffett's investment acumen remaining as sharp as ever, I'm betting that the underperformance won't be carried over into 2010. And regardless of how the stock performs in 2010, Berkshire Hathaway will likely provide meaningful outperformance over the long term.
1. Each contestant can pick a stock, income trust, American depositary receipt (ADR) or exchange-traded fund (ETF).
2. A stock must trade at $1 or more (and have a $100-million market capitalization minimum for Canadian equities) and trade on the TSX, the TSX Venture Exchange or a U.S. exchange. A U.S. stock or ADR must have a $1-billion (U.S.) market cap minimum.
3. We convert the cost of any U.S. pick into Canadian dollars to reflect changes in the exchange rate, as well as gains or losses in the stock's price.
4. Results are tabulated on a total return (dividends and distributions included) basis.
5. The winner will be the contestant who has the top percentage gain from the market close of Dec. 31, 2009, to the end of 2010.
6. The pick must be held for the entire period, unless the company is taken over.
7. If a stock is taken out in a merger or privatization, the contestant has the right to stand pat for the year or pick another stock, ETF or ADR within a week of the date that the stock ceases trading. That gain or loss will be added or subtracted from the original stock's return.
8. The prize for the invitational contest is a Globe and Mail coffee mug and bragging rights.