At the end of 2015 Livewire readers were asked to nominate their single highest conviction stock pick for 2016, as part of a survey asking for their predictions on how events would unfold in 2016. In this post we’ll check in to see just how well the collective stock picks of the Livewire audience have performed thus far. We also put a spotlight on the stocks that are leading the charge and look for key trends emerging. The most tipped stock was CSL, followed closely by BHP and A2M, which have so far this year gained 0.5%, 25.5%, and 12.1% respectively. However, none of these stocks feature in the current leader boards. This post provides a brief overview including the 5 leading big caps, the 5 leading small caps, and the 5 worst performers.
From the more than 300 tips, Livewire readers named 210 different companies in all, with the mean (unweighted) performance across this sample being +18.3%. This number is strong but particularly impressive in relation to the ASX200, which is up just +2.5% (+5.9% in total performance) year to date.
The majority of the tips were big caps, but there were some interesting small-caps in the list as well. Given small companies have outperformed over the year, we have divided the analysis across big caps and small caps to be fair. Below are the top five performers for your big cap stock tips so far this year.
We had six tips for South32, two for Webjet, two for Altium, and three for each of ALS and Independence, so we saw fair conviction across the top performing big cap names.
It is worth noting that as much as 2% of Livewire respondents backed South32, despite the stock having just fallen 50% in a straight line over the seven months since BHP spun the assets out. As the top performing big cap in our sample so far this year, it demonstrates the value in identifying the unloved assets.
With Independence and ALS also on the list, a story emerging here is Livewire readers identifying the deep value in mining and mining service stocks in December 2015, when the mining sector had fallen five years straight to reach a ten year low.
We had fewer tips on the small caps, but a similar story was apparent with readers backing resource stocks here too, like Brazilian gold producer, Beadell, when it was 85% off its highs. In December, Lithium stock Galaxy was emerging from a 5 year pullback that had seen it down by over 90%. As Baron Rothschild put it, 'Buy when there's blood on the streets'. Both resource stocks are now amongst the top five small cap performers in our sample.
It hasn’t been peaches and cream all round. At the bottom end of the table, we have a couple of former big caps that have reverted to small caps, as well as several ‘reverse five-baggers’, all serving as a reminder of just how far stocks can sometimes fall.
Given the notorious volatility of small caps, the running order could change completely by the time we revisit this in November, and yet again when we finalise it in December! Keep an eye out for our next installment, and start thinking about your tip for 2017.
You can revisit the full 2016 Outlook Series on this link: (VIEW LINK)