Share Investor: Share Investor's 2013 Stock Picks

2012 has been a great year for stocks so forget about what might happen and suspend belief for a nanosecond and take a read at what I have for you.

The stock picking monkey has been very busy this year with a few surprises.

This year the monkey had a hard go at it but managed to get through quite a few interesting picks.

This year I have picked stocks based on nothing except value of the stock based on where I think it will go.

Please keep in mind dear readers that the picks are my own and they reflect my investment philosophy and not necessarily anyone else's.

My picks are primarily based on a long-term view, regardless of the current short to medium term market turmoil and economic uncertainty.

NB: Since I think most of my portfolio consist of the best stocks on the New Zealand market, I found it difficult to pick stocks outside my realm of self interest.

Share Investor's 2013 Stock Picks

Picks from the NZX

Sky City Entertainment Group Ltd
[SKC.NZX]

Fletcher Building Ltd [FBU.NZX] are showing more of a positive tone as the New Zealand economy limps on but Christchurch City shows signs of rebuilding

While the economy is uncertain the outlook for it is probably a little better than it was 4 years ago yet the share price has been given a beating until recently

I still think the outlook for FBU is good but most of the bad news has already been factored into the share price and further falls would be the market overreacting to this delay.

They also had a good result in to June 30 2012, with a promise of a 20% upgrade.

It is returning a near 9% gross dividend at these price levels and this is clearly an attractive income as well as a good capital gain play as the share price recovers with the first notice of a definite rebuild.

FBU @ Share Investor

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Discuss Fletcher Building @ Share Investor Forum - Register free
Download FBU Company Reports

The Warehouse Group
[WHS.NZ]

The Warehouse Group [WHS.NZ] hasn't been featured since 2010 because retail has been tough especially on the WHS. Retail has been tough in New Zealand and globally over the last few years but there are signs that retail in NZ is on the improve.This confidence by management will only be underpinned by tangible results over the all important 2012 Christmas shopping period and any increase on last year will be a sign that improvement could be on the cards for 2013.

This stock is a good long term play and any increase in sales and cashflow will benefit shareholders with increased dividends.

The increase in sales and profit over the quarter have re-rated this stock.

There is the added bonus is that the company is still in play to some extent pending a decision by either Foodstuffs or Woolworths Australia making an official bid for the company.

Accumulate on weakness.

The Warehouse Group @ Share Investor

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The fight for control begins soon

Discuss WHS @ Share Investor Forum - Register free

Fisher & Paykel Healthcare Ltd
[FPH.NZX]

Pumpkin Patch Ltd [PPL.NZX] had a reversal of sorts this year. From a penny dreadful to above a buck it changed its fortune when it put global dominance behind them and concentrated on this part of the world.

It still is overseas but through different channels such as 3rd parties which the patch gets its fair share of.

They managed a decent profit this half year and all the reorganization has thus far had the required impetus, so much so that there is talk of paying a divided next year.

Look forward to new stores and some exciting new clothes for the coming season.

Pumpkin Patch @ Share Investor

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Pumpkin Patch profits flatten
New Zealand Retailers ring up costs not tills

Discuss PPL @ Share Investor Forum
Download PPL Company Reports

Mainfreight Ltd
[MFT.NZ]

Mainfreight is a dominant player in the logistics sector in Australasia and has businesses in North America and Asia. It has designs on becoming a global logistics player and is well on the way to acheiving its own stated aim of 2 billion in revenue. It has a stated aim of doubling in size over the next 3-5 years.

It is one of the best managed companies listed on the NZX.

There has been a few hiccups along the way, Win Bosman on sale to MFT, is a black spot thus far but you cannot undermine MFT management of this situation and some patchy performance in Asia.

There is no doubt that MFT will manage its way out of it, they have managed thus far this year and Im picking they will manage their way out this year.

Buy on weakness.

Mainfreight @ Share Investor

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Discuss MFT @ Share Investor Forum

New Zealand Refining Ltd
[NZR.NZX]

With low refining rates, massive capital expenditure and plant shutdowns largely behind them and a rising global oil prices, 2013 looks to be a resurgent year for New Zealand Refining Ltd.

Those higher oil prices will see this stock rise and it has already and the oil price rise has been a significant one. It has been mainly due to a very cold Northern Winter bumping up all sorts of petrochemical products so it is unclear just how sustainable the oil price rise will be. Having said that the recent rise is bound to gain some traction even when the Northern ice melts away and 2013 rolls along.

Their mid 2012 profit was horrible but that should be the last of that, it can only go down so far.

Look for an increased dividend in 2013 as profit increases that will underpin a good share price rise from current levels.

NZR @ Share Investor

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Discuss NZR @ Share Investor Forum
Download NZR Company Reports

Contact Energy Ltd
[CEN.NZX]

Contact Energy has had a relatively good 2012 and slightly more customer numbers but 2013 is shaping up to be a better year for the company.

Drought conditions experienced now and forecast to continue across Summer are going to benefit a generator like Contact considerably and this will go straight to the bottom-line. Customer numbers have stopped falling and have showed some small gains over the months.

The are also persistent rumours that majority owner of the company origin Energy Ltd[ORG.NZX] are still interested in taking full control at some stage.

I bought some at $5.34 in July 2011 and I think investors have bailed too early considering things are finally starting to go their way. Look to buy before Winter 2013 because I am picking a good one for the company because of what I have outlined above.

A good defensive stock in times of economic uncertainty as 2013 will no doubt be.

Contact Energy @ Share Investor

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Follow the Monopoly Board

Discuss this stock at Share Investor Forum - Register free

Nasdaq

YUM! Brands Inc
[YUM.NASDAQ]

A pick from 2010, 2011 & 2012 Yum ! Brands Inc achieved a billion plus in sales growth for 2012 and with more tasty growth to come in 2013 and beyond from China & India still make this company a Finger Lickin proposition. It will never be cheaper.

ASX

Coca Cola Amatil
[CCL.AX]

Coca Cola Amatil is the dominant player in the carbonated drinks market in Australasia. It sells its iconic Coca Cola brand as well as a large number of other well known brands in New Zealand, Australia, Indonesia, Fiji and a number of other markets in this part of the world. Their latest 2012 result shows a good profit.

A strong history of profits can be a good sign that there is more to come in the future and the fact that its customers are largely addicted to its products makes this company a great long term bet. I have always liked this company because it keeps managing to grow its business with clever marketing and product placement at sales outlets.

Buy on any weakness for superior long-term returns.

Coca Cola @ Share Investor

Coke is it!

Caltex Australia Ltd
[CTX.AX]

Caltex Australia Ltd is Australia's largest refiner of oil and oil based products and has one of Australia's largest networks of filling stations.

Its share price has done well over 2012 and is likely to do so in 2013 because the company still remains a dominant player in its sector with good long term potential.

The retail sector for petrol in Australia is undergoing consolidation at the moment and Caltex could be set to benefit.

Buy on weakness for good long term gains.

Other notable quotables

NZX

Auckland International Airport [AIA.NZ] A good monopoly at historically cheap prices.

Kathmandu Holdings Ltd [KMD.NZ] A listing that I may have been wrong about, well see. Value below NZ$1.80.

New Zealand Refining [NZR.NZ] The country's only refiner of oil products. The share price should recover on a lower Kiwi dollar and therefore better margins, an increased global demand for oil and refurbished, expanded plant which will be ready soon.

Port of Tauranga [POT.NZ] New Zealand's leading port company with good upside on increased exports.

Michael Hill International [MHI.NZ] A very well managed jewelry chain poised for global expansion just waiting for that all-important US market to come to the party.

Conclusion & Outlook for 2013

2013 may well be a year of some severe downward corrections on global stock markets. As uncertainty surrounds the fragile state of many economies and the precarious state of Europe's debt yoke and more pain and drama to come in the United States as politicians argue over spending cuts to stop the country from defaulting. Gains made on stock markets in 2012 could materialize for some as nervousness over the aforementioned leaves them to take cash off the table. It is clear that there is much more bad news in relation to the global economy to come and the consequences of this bad news one can only guess at but it will not be pretty at all.

That aside if you can, most listed companies have done well in 2012, and will continue to do so in 2013 but others will find the going tough as cash flow dries up, debt mounts and interest rates bite.

I got rid of PPG, GFF and STU this year cause they irritated the hell out of me and they will never go anywhere. Why did I keep them? Well god only knows its been a year of changes.

Remember, the stocks I have picked above are based on my investment criteria and may not fit yours and of course you could have a different opinion. I would love to hear your opinion and any picks you may have.

Have a look at what I have to say, take it on board or not and then do your own research to see if you might agree with me.

Lastly, I wish you all good luck and a prosperous 2013.

*Just an added footnote. Please feel free to post your own stock picks for 2013. The only requirement is that you say why and declare any financial interest. Post them below at the bottom of this piece or click here.

Disclosure : I own SKC, FBU, WHS, FPH, MFT, PPL, MHI, AIA, CEN shares in the Share Investor Portfolio.

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Friday, November 30, 2012

Share Investor's 2013 Stock Picks

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