iPods rock, Tasers shock
A look at good (buy Apple, sell Taser), bad (buy Cablevision) and ugly (don't buy 7-Eleven) picks.
NEW YORK (CNNMoney.com) - For many, now is the time to look back and judge whether or not the past 12 months have been fruitful.
For us, that means revisiting the selections we made in CNNMoney.com's investing feature: Stock Spotlight.
We made twenty-seven stock picks this year. Fifteen were positive recommendations and the remaining dozen were stocks we either thought were simply overvalued or were in really bad shape.
How did we do? Not too shabby. First, a look at the stocks we liked. Our fifteen buy recommendations are up, on average, 15 percent since we wrote about them.
iPods, body slams and the new HP rule!
We thought that there were "no worms" in the company's story, since we expected the iPod to remain a hot seller that would also help boost demand for the company's Mac computers. Shares have surged 122 percent since we put it under the Spotlight.
Other big gainers included World Wrestling Entertainment (Research), which we highlighted in May as a safe bet because of its lofty dividend, Hewlett-Packard (Research), which we predicted would be a comeback story in 2005 following the ouster of Carly Fiorina in February, and Coach (Research), which we said in January should continue to benefit from healthy demand for luxury goods.
WWE has gained 45 percent, HP is up 36 percent and Coach has shot up 25 percent.
Satellites slump, travel tanks and the Dolans disgust
But not all of our bullish bets turned out to be winners. We erroneously thought that satellite TV firm DirecTV (Research) would gain ground as it continued to steal subscribers from cable companies. Shares have fallen nearly 10 percent since we wrote about the company in July.
Finally, there's Cablevision (Research). We said back in March that investors should ignore the strange family feud taking place at the New York cabler and focus on the fundamentals. We even suggested that the company could be taken over.
For a time, we were right. The Dolan family, which runs the company, agreed to take Cablevision private in June and, at that point, the stock was about 16 percent higher than when we recommended it.
But then, things started to get really odd. The company scrapped the privatization plans in October. Then Cablevision announced it would pay shareholders a special one-time dividend in November...only to abandon that idea this month. Long story short, Cablevision's stock is now 20 percent lower than when we wrote about it. Ouch.
Delta's demise and stunningly bad news from Taser
So that's a look at what we liked. How did the twelve stocks that we weren't so keen on perform? It turns out that we were okay at being bearish as well. Shares of the twelve companies are down 2 percent, on average, since we wrote about them.
To be fair though, we have to admit that much of this can be tied to the performance of two picks. In January, we said that Delta Airlines, despite fare cuts that some thought could help save the airline, was still a bad bet.
That was a dead-on call. Delta filed for bankruptcy in October and was subsequently delisted from the New York Stock Exchange. The company's stock now trades on the Pink Sheets, a haven for penny stocks, for about 83 cents a share, more than 85 percent below where it was trading in mid-January.
Our other big bear bonanza was Taser (Research), the controversial maker of stun guns. We were worried in February about myriad lawsuits the company faced as well as slowing sales and earnings growth. And we were right to shun the stun gunner as the stock has plunged 58 percent.
Some other losers that we correctly identified were Anheuser-Busch (Research), Topps (Research) and General Motors (Research). The Budweiser brewer's stock has fizzled 10 percent since January due to some skunky sales and earnings reports. Baseball card maker Topps has dipped 16 percent since March as the company struggles to turn around its confectionery business, which makes Bazooka gum.
And then there's poor GM. It was only two weeks ago that we said its already significantly dented stock was still not a bargain. And since then, shares have slid another 15 percent.
Underestimating the power of doughnuts and Slurpees
But we did make some bad bearish calls that have come back to haunt us. We thought that all the good news was already priced into fast food company Wendy's (Research) stock, including the possibility of a spin off of doughnut maker Tim Hortons. In the immortal words of connoisseur Homer Simpson, "D'oh!."
The stock has surged 26 percent since we wrote about it in June as the company filed for an IPO of Tim Hortons earlier this month.
We apparently misjudged how strong holiday sales would be for the king of online retailers back in July. And even though we admitted in January that Toyota was in much better shape than any of the U.S. car makers, we also thought that this was already factored into the stock price. Wrong.
Finally, we are not thanking heaven for 7-Eleven. We thought that the convenience store chain's stock was looking expensive since the stock was rising in tandem with gas prices.
We were right to suggest that gas prices would eventually cool. But we did not count on 7-Eleven's parent company, Seven-Eleven Japan, acquiring the remaining shares of 7-Eleven that it didn't own in November for a price 50 percent higher than what the stock was trading at in April.
It's going to take more than a Big Gulp to wash that bad taste out of our mouths.
Anyway, we hope to do a better job next year. Here's to a happy and profitable 2006.
For more market news, click here.
For a look at more stock winners and losers, click here.