25 July 2008

Checking in on the Zacks Top 10 Stock Picks for 2008

Earlier this year, when I wasn't so focused on charts and trends, I evaluated the Zacks Top 10 buy 'em-and-hold 'em picks. On February 20, I made some decisions. Out of their ten suggestions, I admitted five outright, put three on the wait-list, and sent two off to their safeties. I even held shares in one pick ever so briefly.

So let's see how these picks are holding up since the delightfully chilled days of winter, and let's also compare them to the benchmark S&P 500.

To start, the S&P 500 has been pretty craptastic since February. On February 20, the S&P closed at 1360.03. Today, the S&P closed at 1282.19, down 5.7% from the 2/20 level.

A 5.7% loss is what we're trying to surpass. Will these picks lose less? Or perhaps even be in the black?

The five faves were: ALB, AMX, GME, HNP, and RIG.

How are they doing (excluding dividends)?

ALB closed today at $36.05. ALB closed on 2/20 at $40.15, for a loss of 10.2%
AMX closed today at $48.82. AMX closed on 2/20 at $61.39, for a loss of 20.5%
GME closed today at $42.56. GME closed on 2/20 at $45.74, for a loss of 7.0%
HNP closed today at $28.86. HNP closed on 2/20 at $33.76, for a loss of 14.5%
RIG closed today at $134.72. RIG closed on 2/20 at $138.73, for a loss of 2.9%

The average percentage loss for the 5 Zacks picks was 11%, about twice the loss of the S&P.

How about the three second-tier picks?

EMN closed today at $66.38. EMN closed on 2/20 at $66.73, for a loss of 0.5%
FLO closed today at $29.44. FLO closed on 2/20 at $24.09, for a gain of 22.2%
LDK closed today at $32.37. LDK closed on 2/20 at $32.60, for a gain of 0.7%

The wait-list outshone my preferred picks, as well as the S&P 500, with an average percentage gain of 7.5%

Now for the cast-offs:

CCE closed today at $17.04. CCE closed on 2/20 at $23.78, for a loss of 28.3%
CELG closed today at $73.26. CELG closed on 2/20 at $54.87, for a gain of 33.5%

The rejects eked out an average gain of 2.6% Thus far, CELG is the biggest gainer, and CCE is the biggest loser. Unintentionally, I somehow excluded the two outliers. Statistically, that's nice.

If you invested $1000 in each of the 10 Zacks picks, you'd be down 2.8%, not including dividends, which means you're sucking less than the S&P, but would've been better socking that cash away in an interest-bearing savings account.

If you found my analyses compelling and bought my five faves, well, you're lagging the laggard S&P. Sorry about that. I certainly hope you also followed my lead and didn't put your money in those stocks.

Now for the caveats.

My methodology does not take into account using technical indicators like RSI to time purchases.

Also, the Zacks thesis for these picks was to buy and hold them for a year, not for 5-months-and-change.

And today's tape was pretty pessimistic. Not exactly the most advantageous to evaluate stocks' performance.

The true test of the Zacks thesis, and these picks, will be next February. In the meantime, I'll continue posting on other, more interesting (and hopefully profitable) market miscellany.


Sachin said...

what you think of CELG presently?
should it be considered buying for long term hold or should we wait for it to come again to $60-65 range...
I think it is a bit of overvalued riding on its recent Q2 results..

and have u seen VNDA recently...whts ur call at present prices($ 0.9)

u can mail me sachin.bitz@gmail.com

mlgreen8753 said...

My stock pick is Mentor Capital (MNTR). There 20 percent interest in Quantum Immunologics could pay off big later down the line.