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Buying the best stocks of last year, does it work?

7/9/2014

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In December of 2013, I looked at the 30 best stocks of the year to see what they had in common. I was pretty curious how they have done since the start of the year, because I am an advocate of momentum investing. The results don't look good, their performance as a group has lagged the index for in 2014:
Ticker         Name                                                                                     Industry                                    Gain in 2013    YTD gain   Mkt cap
AAMC
PTCT
ZHNE
CSIQ
CNIT
GSAT
CRRS
GTN
LCI
IQNT
LBMH
RVLT
MEG
INSY
HIMX
ACAD
NXST
CHTP
SPWR
DL
GENT
CMGE
BCOM
KERX
PBYI
XRM
ROIA
BCRX
ADEP
PSIX
Altisource Asset Management 
PTC Therapeutics, Inc.
Zhone Technologies Inc.
Canadian Solar Inc.
China Information Technology, 
Globalstar Inc.
Corporate Resource Services
Gray Television Inc.
Lannett Company, Inc.
Inteliquent, Inc.
Liberator Medical Holdings
Revolution Lighting Technologies.
Media General, Inc.
INSYS Therapeutics, Inc.
Himax Technologies, Inc.
ACADIA Pharmaceuticals, Inc.
Nexstar Broadcasting Group Inc.
-
SunPower Corporation
China Distance Education Holdings
-
China Mobile Games and Entertainment
B Communications Ltd
Keryx Biopharmaceuticals Inc.
Puma Biotechnology, Inc.
Xerium Technologies Inc.
Radio One Inc.
BioCryst Pharmaceuticals, Inc.
Adept Technology Inc.
Power Solutions International, Inc.
Asset Management
Biotechnology
Communications
Semiconductor
Application Software
Wireless Communications
Staffing & Outsourcing
Broadcasting - TV
Drug Manufacturers
Wireless Communications
Medical Instruments
Diversified Electronics
Broadcasting - TV
Biotechnology
Semiconductor 
Biotechnology
Broadcasting - TV
-
Semiconductor 
Education & Training
-
Software
Communications
Biotechnology
Biotechnology
Diversified Machinery
Broadcasting - Radio
Biotechnology
Diversified Machinery
Diversified Machinery
1162%
1072%
881%
757%
655%
516%
509%
501%
495%
488%
479%
430%
429%
420%
416%
402%
401%
399%
397%
391%
390%
388%
378%
377%
376%
364%
360%
351%
350%
345%

-31%
48%
-46%
-7%
-25%
54%
-4%
-14%
38%
24%
-15%
-24%
-6%
10%
-57%
-14%
-9%
-
24%
-8%
-
-41%4%
16%
-36%
-16%
22%
53%
-43%
-17%
1434
753
93
1525
160
2872
399
731
1621
453
185
217
1880
973
1083
2134
1547
-
4843
599
-
467
541
1376
1985
213
220
835
125
671
If I bought or held the best stocks of 2013 also into 2014, my YTD return would be around -4.3%, which is lower than the S&P 500s 6.7% return. As you can see, 18 of the original 30 stocks went down this year, and 2 were bought out in acquisitions. So far it looks like buying the best stocks of the previous year is not a great idea, will see how they do for the rest of 2014. However, momentum investing (buying stocks at new highs) still works, provided you buy good undervalued growth stocks and use proper risk management.
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Best UK stocks of 2014 so far

7/2/2014

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Continuing with UK stocks, I checked the best performing ones in 2014 with a minimum market cap of 100 million GBP. The FTSE 100 index is up only 1% this year, but there are still many great stocks out there:
Ticker            Name                                                                   Sector                                     YTD Gain    Market cap        Profit     Insider
LGO.L
GWP.L
SKP.L
GDG.L
OPG.L
MEC.L
STAF.L
PDL.L
SHP.L
MOSB.L
WLF.L
TRI.L
VLS.L
PRES.L
CNKS.L
SBD.L
PWS.L
GEM.L
HCM.L
KENZ.L
PLUS.L
CEY.L
HIK.L
KAZ.L
RM.L
PFG.L
QXT.L
JLF.L
GOG.L
POWR.L
Leni Gas & Oil
GW Pharmaceuticals
Skyepharma
Green Dragon Gas Ltd.
OPG Power Ventures
Mecom Group
Staffline Group
Petra Diamonds Ltd.(DI)
Shire Plc
Moss Bros Group
Wolfson Microelectronics
Trifast
Velocys
Pressure Technologies
Cenkos Securities
Songbird Estates
Pinewood Shepperton
Gemfields
Hutchison China Med
Kentz Corporation Ltd.
Plus500 Ltd (DI)
Centamin (DI)
Hikma Pharmaceuticals
Kazakhmys
RM
Provident Financial
Quixant
Jelf Group
Go-Ahead Group
Powerflute Oyj (DI)
Oil&Gas
Pharmaceuticals
Pharmaceuticals
Mining
Utilities
Media
Support services
Mining
Pharmaceuticals
Retail
Technology
Industrial
Chemicals
Industrial
Financial services
Real Estate
Media
Mining
Pharmaceuticals
Oil&Gas
Financial services
Mining
Pharmaceuticals
Mining
Software
Financial services
Technology
Financial services
Travel
Forestry
494%
164%
141%
102%
81%
76%
63%
62%
58%
58%
58%
57%
56%
55%
53%
50%
50%
48%
47%
47%
45%
44%
44%
42%
41%
41%
38%
38%
36%
35%

£102.46 
£1,229.17
£252.60
£789.86
£369.08
£185.89
£247.98
£980.69
£26,576.48
£115.67
£270.92
£142.67
£266.24
£107.02
£126.68
£1,836.13
£238.40
£264.57
£484.00
£1,090.99
£517.00
£739.65
£3,420.94
£1,384.03
£135.42
£3,202.29
£110.20
£100.99
£1,020.99
£110.10
No
No
Yes
No
Yes
Yes
Yes
Yes
Yes
Yes
No
Yes
No
Yes
Yes
Yes
Yes
No
Yes
Yes
No
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
No
No
Yes
No
No
Yes
No
Yes
No
No
Yes
No
No
Yes
No
No
No
No
Yes
Yes
Yes
No
No
Yes
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No
No
Yes
No
No
DOWNLOAD THE EXCEL SPREADSHEET FOR MORE DETAILS
Best UK stocks look a bit different than their US counterparts. Only 7 companies didn't turn a profit and only 10 were bought by insiders prior to their advance. I have picked 2 stocks on this list, namely Hutchison China Med and Hikma Pharmaceuticals, which have done quite well.

But one thing holds true again: The best stocks are almost always small caps, that are growing fast or coming up with a new product/service. And of course, they all make new highs regularly. If you want to make money in the stock market, focus on uptrending small cap stocks, you can definitely catch some multibaggers there.
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Best stocks of 2014 so far

7/1/2014

0 Comments

 
I have decided to check the best stocks of 2014 so far, to see what I have missed this year. The minimum market cap criterion was $300 million, I also examined if they turned a profit or were bought by insiders prior to the big moves. Here are the best 30 stocks of 2014:

Ticker            Name                                                                    Sector               YTD Gain (%)    Market cap (mil.)  Profit         Insider
IDIX 
PTX 
ICPT 
PLUG 
PEIX 
ITMN 
UBIC 
BLDP 
RNA 
GWPH 
SQBG
FURX 
EDN 
EMES 
TGTX 
SBGL 
ACHN 
VTL 
VIPS 
AZC 
PES 
GTAT 
AXDX 
MNKD 
HZNP 
BDSI 
KPTI 
PSXP 
PAH 
ALDR
Idenix Pharmaceuticals Inc.
Pernix Therapeutics
Intercept Pharmaceuticals
Plug Power Inc.
Pacific Ethanol, Inc.
InterMune Inc.
UBIC, Inc.
Ballard Power Systems Inc.
Prosensa Holding N.V.
GW Pharmaceuticals plc
Sequential Brands Group
Furiex Pharmaceuticals
Edenor SA
Emerge Energy Services LP
TG Therapeutics, Inc.
Sibanye Gold Limited
Achillion Pharmaceuticals
Vital Therapies, Inc.
Vipshop Holdings Limited
Augusta Resource Corp.
Pioneer Energy Services
GT Advanced Technologies
Accelerate Diagnostics
MannKind Corp.
Horizon Pharma, Inc.
BioDelivery Sciences
Karyopharm Therapeutics
Phillips 66 Partners LP
Platform Specialty Prod.
Alder Biopharmaceuticals
Healthcare
Healthcare
Healthcare
Technology
Materials
Healthcare
Technology
Industrial
Healthcare
Healthcare
Consumer 
Healthcare
Utilities
Materials
Healthcare
Materials
Healthcare
Healthcare
Services
Materials
Materials
Technology
Healthcare
Healthcare
Healthcare
Healthcare
Healthcare
Materials
Materials
Healthcare
303
256
247
202
200
200
175
171
170
158
156
153
149
148
141
137
128
127
124
122
119
113
113
111
108
105
103
101
100
100

3635.5
339.3
5004.7
782.1
307.9
4365.6
2487.9
533.2
453.1
2092.2
354.9
1148.9
342.3
2500.1
353.4
2438.7
732.8
593.6
10609.2
462.85
1100.64
2551.36
1159.08
4259.28
1166.41
584.79
1385.33
5589.17
3848.24
618.16
No
No
No
No
No
No
No
No
No
No
Yes
No
Yes
Yes
No
Yes
No
No
Yes
No
No
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Yes
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Yes
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Yes
Yes
No
No
Yes
No
Yes
Yes
Yes
Yes
Yes
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No
No

As you can see, 24 out of 30 top stocks (80%) didn't make any profit last year and most of them don't pay any dividend. So much for P/E ratios and dividend valuation models. In addition, 17 stocks (56%) were bought by insiders before their advance began. The most dominant sector was healthcare (or biotechnology) with 16 stocks, followed by basic materials (7).

However, there is one thing that all best stocks had in common: they kept making 52-week highs over and over during their big moves (simple, isn't it?), and some had huge increases in sales which justified the skyrocketing prices.
DOWNLOAD THE EXCEL SPREADSHEET FOR MORE DETAILS
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    To make money in stocks you must have the "the vision to see them, the courage to buy them and the patience to hold them". And patience is the rarest of the three.  Thomas Phelps

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