It's a wide open field for our 2010 contest. Three-time champion Jean-François Tardif bowed out at the top of his game last year and a record number of contestants have now lined up for a run at the crown. The challenge: seize onto the stock that will soar higher than all others this year and ride it to victory. But you only get one chance, and one stock, to get it right. See last year's contest here.
Let the games begin for 2010:
LOU SCHIZAS Radio-show host, analyst, and professor of finance at Sheridan College
The Pick: Magma Energy Corp. Dec. 31 close: $1.81
The Rationale: The stock has a chart that looks ready to move higher, a corporate calendar that will have the company actively taking its story to investors in 2010, and a seasoned management team, which has been able to raise capital under horrid conditions. The last two factors are that I like the potential of the geothermal story and finally, the fact that the name was brought to me by Jim, a user of the globeinvestor.com website, who asked me to conduct some research on his behalf in September, 2009.
COLIN CIESZYNSKI Market analyst, CMC Markets
The Pick: WestJet Dec. 31 close: $12.39
The rationale: Earlier this month, the shares broke out of a two-year downtrend, and the 50-day moving average completed a golden cross of the 200-day average. Despite a lot of negative sentiment surrounding the industry with the global recession, the shares have been quietly turning higher in the past few weeks. The recent rebound and support at higher levels suggests that some investors may be starting to look toward the potential for recovery in 2010.
GAIL BEBEE Author of No Hype: Straight Goods on Investing Your Money
The Pick: Star Bulk Carriers Dec. 31 close: $2.82 (U.S.)
The Rationale: Star Bulk Carriers Corp. is an unloved bulk shipping stock. There is an upturn in global production happening and this should set the stage for an economic recovery in 2010. Dry bulk shipping is a beaten-up sector, which is a fair proxy for a recovery. The stock has low debt for the sector, trades well below book value and pays a dividend.
GAREY AITKEN Chief investment officer, Bissett Investment Management
The Pick: Thomson Reuters Dec. 31 close: $33.95
The Rationale: We expect organic revenue growth to remain sluggish given that the global economy is in the early recovery phase, but sales activity should improve as the year progresses. Thomson Reuters will further solidify its strong market share positioning with two new major product launches. Restructuring costs relating to their business combination should fall off significantly throughout 2010. We believe that the market has mispriced this business. As the fundamental strength of the company becomes more apparent with the global economic recovery, we expect the stock to be a solid performer.
JAMES BREECH President and CEO, Cougar Global Investments
The Pick: Vanguard Emerging Markets ETF Dec. 31 close: $41 (U.S.)
The Rationale: Cougar Global's analysis concludes that the MSCI emerging markets index has the highest expected return for the year (10.23 per cent). We utilize the Vanguard Emerging Markets ETF to invest in this asset class because it is well diversified, holding 824 stocks in 44 emerging markets countries. The emerging markets are expected to benefit more than the developed world from the impending global economic recovery.
SKOT KORTJE Stocktrends.com analyst
The Pick: Stella-Jones Inc.
Dec. 31 close: $25.40
The Rationale: It is an infrastructure play that will depend on a North American economic recovery, but its current bullish trend should continue throughout 2010. During the bull market between 2002 and the market peak in the summer of 2007, Stella-Jones's share price shot from under $3 to just shy of $50. It managed to stay Stock Trends Bullish for over five-and-a-half years - the longest bull trend for any listed TSX stock during the last bull market. The stock is relatively early in its new bull trend, but I am looking for it to regain its previous highs of 2007. It remains a low-profile stock. However, it doesn't hurt that Warren Buffett has laid his chips down on the railroad sector.
26-year-old author of Rich by Thirty
The Pick: Suncor
Dec. 31 close: $37.21 The Rationale: I encourage a long-term approach to growing your stock portfolio and I believe Suncor fits with this philosophy. Suncor plans on generating significant cash flow in the coming years, and when combined with potential value coming from the optimization of the Petro-Canada assets, I believe this stock will appreciate in value and generate a healthy dividend.
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.
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