top 5 stock picks - 1 year update

About one year ago I selected 5 stocks that I believed were undervalued at that time. Just for fun, I update the performance of these stocks vs. comparable benchmarks. Here is the 1 year update:

Manulife Financial -1.4%% vs. / Canadian Financials ETF (XDV) -13.2%
Walgreen -20.2% / Vanguard Consumer Staple ETF (VDC) +0.8%
FedEx -20.3% / Dow Jones US Transport Index (.DJUSTS) - 8.1%
Lowes - 28.1% / Vanguard Consumer Discretionary ETF (VCR) - 23.2%
Johnson & Johnson +4.7% / U.S. Healthcare ETF (IYH) -12.4%

Overall my 5 stocks had an average return of -13% over the past year, while their benchmarks had an average return of -11%. Well, I'm trailing the indexes by 2 solid points after one year. The poor performance of the markets continue to show through as 8 of the 10 securities are down over the year period.

top 5 stock picks - 6 month update

About 6 months ago I picked 5 stocks that I thought were undervalued. I also liked the 5 company's prospects at that time as long term investments, which I still do. Here is a 6 month check up on their performance vs. the appropriate index.

Manulife Financial + 0% vs. / XFN Canadian Financials ETF - 9.4%
Walgreens -11.1% / S&P Consumer Staple Index - 1.5%
FedEx -11.8% / Dow Jones US Transport Index - 29.3%
Lowes - 30.0% / S&P Consumer Discretionary Index - 1.9%
Johnson & Johnson +4.8% / IYH U.S. Healthcare ETF -3.1%*

Overall my 5 stocks had an average return of -9.6%, while their benchmarks had an average return of -9.0%.

6 months is a very short time horizon, but so far I seem to be just behind the index which is surprising given the extremely poor performance of Walgreens as well as Lowes. Goes to show how poor the markets have been that 8 of the 10 issues are down in a 6 month period. The next update will be at the one year mark, which will be around May 24, 2008.

*changed this benchmark going forward due to availability of quote.

top 5 stock picks - 3 month update

About 3 months ago I picked 5 stocks that I thought were undervalued. I also liked the 5 company's prospects at that time as long term investments, which I still do.

Here is a 3 month check up on their performance vs. the appropriate index.

Manulife Financial + 1.9% vs./ XFN Canadian Financials ETF - 5.0%
Walgreens + 0.6% / S&P Consumer Staple Index - 1.5%
FedEx + 5.8% / Dow Jones US Transport Index - 6.3%
Lowes - 6.0% / S&P Consumer Discretionary Index - 8.6%
Johnson & Johnson -2.5% / S&P Healthcare Index -6.8%

Overall my 5 stocks had an average return of 0%, while their benchmarks had an average return of negative 5.6%. 3 months is a very short time horizon, but so far I seem to be beating the benchmarks.

(Please note currency was not taken into account here, as the values are in real terms)

top 5 stock picks

I want to introduce a new post-series called 'top 5 stock picks', where I select 5 stocks that I currently believe to be undervalued, and then check on the progress of these stocks over longer time frames. Basically, I believe it will be a fun way to test my models and analysis of stocks.

Remember, I am not a financial advisor.

Here are my top 5 stock picks as of May 24, 2007:

1. Manulife Financial (MFC) = $39.72

2. Lowes Companies (LOW) = $32.06

3. FedEx Corporation (FDX) = $105.92

4. Walgreen Company (WAG) = $44.59

5. Johnson & Johnson (JNJ) = $63.52

I may elaborate on why I like these stocks right now, and why I believe they are cheap going forward, in future posts in the series.