Did I get your attention with the title of this post? I sure hope so! 
I have seem many friendly stock pick contests between the big Canadian personal finance bloggers but was always too intimidated (or never asked lol) to participate. Well, Financial Uproar apparently felt the same way too (I think he asked and was rejected) so he thought to create one of his own. Financial Uproar asked if I wanted to participate in a Canadian underdog personal finance blogger stock picking competition. His direct words were “because you all don’t suck, you’re all officially invited.”
I’m happy to participate and very interested to see how my picks go. I just hope I don’t get the gag prize for finishing last (but knowing me, I probably will). Coming from Financial Uproar, I have no idea what kind of gag prize he has in store. If they’re chips, I’d be happy. Though I highly doubt the gag prize will be something so benign as chips.
Here are my stock picks for 2012. Lately, I’ve resigned (or more accurately, become smarter by choosing indexing) to indexing, but sometimes the gambler, speculator in me just enjoys the wild roller coaster ride of the Toronto Stock exchange.
Please be gentle regarding my picks! No judging lol!
You can also see Financial Uproar’s stock picks here.
Youngandthrifty’s 4 Stock Picks for 2012
Dollarama (DOL.TO)
Dollarama has 667 stores across Canada and they recently opened 57 new stores. Dollarama became public in 2009, and since then, its stock has increased 93% and had a 25% increase through the first 9 months of 2011. I know, because I’ve been watching it like a hawk. I watched it at $30 and now it’s at $44. I’m still watching it sadly, and kicking myself that I didn’t get in on the action.
It even started paying out a dividend of $0.09 per quarter. Which makes the annual dividend yield 0.81%. Small, I know, but hey, this company just came out in 2009.
I LOVE shopping at Dollarama. It is my new favourite dollar store. It has everything, I even bought my Christmas ornaments there. If you need some weather stripping, they have it. If you need a handsaw, they have it. If you need some gift bags or birthday cards, they have it.
With the recent (and long drawn/ prolonged) economic downturn, everyone has been pinching their pennies and watching what they spend. Frugal retailers and frugal fast food restaurants have done exceptionally well in these few years with everyone watching what they’re spending. I see Dollarama continuing to do well even if the economy improves. Once you shop here, you’ll not want to shop elsewhere because you can get so many things for so cheap.
Coastal Contacts (COA.TO)
Of course I wish to include a wild card, a growth stock. If you haven’t heard of them before, they are Coastal Contacts and are also known as Clearly Contacts. They are the largest and leading online retailer of contact lenses and glasses. They were founded in 2000 (by Roger Hardy in a basement with one phone and a ping pong table apparently) and eliminated the need for people to pay an arm and a leg for glasses and contact lenses at the optician’s office or at expensive retailers.
In the first year of business, Coastal Contacts achieved $1 million in revenue. They also have 2 million customers worldwide.
Most of the glasses you purchase at expensive stores are made in China anyway (like everything is) and Coastal Contacts eliminates the middle person, therefore you can get designer glasses or sunglasses at very reasonable prices.
They also run big promotions like giving away X number of glasses to the first X number of customers online. Their major celebrity advertiser (at least here in Vancouver anyway) is Trevor Linden.
Its current price is $2.63 but unfortunately there isn’t much volume. Its P/E is high, but this often seen with rapidly growing companies.
At this price, I don’t mind buying 1000 or even 100 shares (yeah, I know) and anticipate future growth of the company. They are also a Vancouver born and bred company, and many of you are well aware of my annoying allegiance to Vancouver!
Husky Energy (HSE.TO)
Some of you may remember that I have been keeping an eye on Husky Energy for a while. It’s current price is $24.28 and its dividend yield is a healthy 4.94%. It’s Price to Earnings ratio is 11.43. As you can see, its trading at a relatively low level compared to earlier in the year (though what investment isn’t I suppose). The Price to Book ratio is also excellent.
Husky Energy is well diversified within the oil and gas industry, including involvement in exploration, upgrading crude oil, and retail gasoline. Its headquarters is in Calgary and it is owned by the son of a multi-billionaire in Hong Kong, Li Ka Shing (eleventh richest person in the world). So money isn’t really a concern in that regard.
In their website, they also talk about Aboriginal responsibility, and they train their staff to be sensitive to support and interactions with Aboriginal communities across Canada. To me, that’s a plus one. How this is actually enacted, I don’t know, but I hope they are as responsible in person as they appear on paper/ website.
Bank of Montreal (BMO.TO)
Last but not least, I’m going to pick a bank stock. Any Canadian bank would do, really, but I found that the price of BMO is more affordable for my stock portfolio budget than some of the other banks. Canadian banks are notorious to be safe and probably the best in the world to invest in.
BMO’s current price is $54.95. BMO’s 52 week low is $51.83 a has a 52 week high of $66.60. Their Price to Earnings Ratio is 10.45. Their dividend yield is 5.10% annually (which is better than any high interest savings account, IMO!).
However with the future being uncertain, I’m not sure how the big banks will fare in the coming year, to be honest. As a long term pick (and I know that Financial Uproar is not looking for anything long term- lol did you get my little joke?), I think this is great. For 2012, I’m not sure how it will do.
PS, are you proud of me readers? I learned how to do a “picture shot” on my MacBook Pro! (yes, two years after owning it… told you I’m computer illiterate in some respects!)
Readers, what do you think of these picks?
I definitely had Dollarama and Husky Energy on my hypothetical picks for this year – I never would have thought of Clearly Contacts (and I’m a long-time purchaser from them, too!). It will be interesting to see how they all fare over the year
!
@tinysarah- great minds think alike!
I don’t know if Clearly Contacts will do exceptionally well this year (probably just that rocky rollercoaster like the rest of the market) but I think it should continue to grow in the coming years (plural).
Y&T First of all congratulations on taking a screen shot
If I can do that on a PC then yes a Mac should be able to run circles around that one. It should even post it in your blog for you while you sleep!
HSE.T and BMO.T are excellent picks. As you know I have been following Husky Energy for over a year. This company is trading at a phenomenal price point – a real value play. The company has been putting a lot of its equity into infastructure and upgrades, and its in a prime spot (as you allude to) through its ownership, to expand into the Asian market.
Coastal Contacts is intersting, have to look into that one further. Dollarama Inc. has already been a top performer, and a great stock for those who already own it. IMO (I’m just sayin) I think it is at premium price, and I wouldn’t be buying at these levels. Topping up on the dips – maybe. But sometimes winners just keep winnin
Happy New Year Y&T
Dividend Ninja
@Dividend Ninja-Hahah THanks! I knew you would be proud of me! I agree that HSE and BMO are good solid picks, they are undervalued. I was going to say SLF instead of DOL but then I worry because SLF is paying out such a high dividend right now, it is inevitable that they will probably have to cut their dividend unfortunately (or do something to change what is happening at the moment) which will probably drive investors away.
Nice picks. I don’t know much about these companies, but I think you’ve talked about Husky before. That company sounds pretty interesting. I need to diversify into the energy sector more. They have nice dividend payout too.
@retirebyforty- Yeah, I definitely talked about Husky. I’m getting all husky for Husky lol. I am going to add it into my TFSA for sure. I’m transferring money over as we speak. I was deliberating between adding to the dip in SLF or adding another dividend stock. I think I’m going to add to my shares in BMO, SLF, and also add Husky in my TFSA portfolio. Maybe buy a few shares of COA for fun. I wouldn’t personally be buying DOL.TO though just because it’s so expensive, but who knows maybe I’ll be kicking myself in a few years.
These look like promising stocks. I’ll put them on my watch list, maybe start accumulating on dips. Thank you for sharing.
@Jim Syyap- I’m not a financial advisor or guru of any sort so I am warning you!
Have a look at the other stock picks- many people picked Apple.
I think DOL.TO should have been on last year’s list
. Although to be fair, its likely fair game again this year.
@JA- In all honesty, I agree with you. It is at the peak right now and I always hate buying it then. I just wanted to ‘feature’ this stock because I really like the company and I think it will continue to have successful growth even through the recession. I was trying to liken it to Lululemon. Lululemon’s growth has been ridiculous and its P/E is ridiculous as well yet it still keeps performing and luring investors.
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Gotta go American for the contest, the bull market is on! (jk, I have no idea what I’m talking about, but if I say things like that I sound like the guys on TV that have no idea what they’re talking about either, but people pay them a lot of money). Best of luck. My goal is to do terrible so that I have no illusions about my stock picking ability and will not be tempted to try and play “mutual fund manager” in the future.
@MUM- LOL. Are you trying to get all Jim Cramer on me?? I think I’ll do terrible too and I like your concept- so you’re sabotaging your contest to avoid playing mutual fund manager in the future?
Sounds like a good idea to me- it can be too tempting to create your own basket of random stocks that have no asset allocation whatsoever. Who knows- there is no way of telling how things will be 12 months from now. The world might have ended by then anyway 
[...] Young and Thrifty [...]
Cool picks. l see you have a nearly 5% dividend pick. That should balance out some of the growth picks too. Oh how I love that approach better than just riding the market for sanity sake
@Roshawn- The dividend approach you like? I like it too. Makes me calmer when the markets are tanking haha.
Y&T There is a tremendous value-play in the Canadian Insurance sector right now, but and I mean but, these companies are currently running on massive debt levels. A low interest rate environment also makes it hard for these financials to be profitable. Manulife has gone through a very diligent restructuring with the new CEO. I do agree there may be dividend cuts in this sector
On the other hand, the best time to buy is when the gloom and doom is highest. The Passive Income Earner had a great post on this sector:
http://www.thepassiveincomeearner.com/2011/12/life-insurance-companies-buy.html
@Dividend Ninja- Argh! Your comment went into spam- I’m glad I rescued it. PIE has a great article- thanks for sharing. I’m tempted to buy more with SLF but then I’m just waiting for their dividend cut to happen. 7% is not sustainable and I think that’s what investors are scared of.
Cool picks indeed. I smiled when I saw Dollarama. They really are expanding arent’ they. I think they are the next Tim Horton’s. Soon there will be one on every block. Not a bad investment at all.
@Miss T- If only they could consistently increase their dividend by leaps and bounds
So they have Dollarama in the prairies eh? Maybe it will be the next Canadian icon!
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Dollorama has been one of the top 10 performers of 2011…
normally you want to buy before it gets these numbers.. people tend to buy high sell low.
They might get another stellar year (people buy more and more cheap crap stuff) but it’s not a sure bet.
I prefer more diversified portofolio (with ETFs of many uncorrelated secotrs), a few stock picks is very risky unless you just want to play the game.
@Etienne- I know people tend to buy high and sell low. I personally wouldn’t add this to my own portfolio right now but I just wanted to see how it would do in Financial Uproar’s imaginary stock pick contest
[...] in December 2010, in My Stock Picks for 2011. Even Young & Thrifty chose Husky recently for her HOT Stock Picks for 2012. Husky currently trades at $24.78 per share, with a dividend yield of 4.8%, a dividend payout ratio [...]
“A Big Boo-YA! comin at you from rural Canada here Jim” I think things could be up *sirens* down *crashing* or nothing at all, woo-hoo! Thanks for calling in.
Love Jim Cramer for pure entertainment, and his ability to crap on the very hedge fund industry that made him rich.
@MUM- BOOOOO YA!! hahaha… You know whenever Jim Cramer suggests a stock the stock price goes up (and then crashes back down later)? He has like a Jim Cramer effect going on.
Hey Y&T,
I was lucky to be invited
but I think it’s fun for anyone to get in. I have put together a spreadsheet with all contestant. Anyone is invited. Just comment on my post or email me and I’ll add your picks.
https://docs.google.com/spreadsheet/ccc?key=0Atr9Y4fMf9RGdG5EYnJmcHFzcEdDZUxGT0tkOEtzMFE
That’s the second blog post this morning on where I saw Husky mentioned. Deserves to go on the watch list.
@101 Centavos- Cool, was it on The Dividend Ninja’s blog that you saw the other Husky mention?
Almost certain, but not 100%. I commented on 35 blogs yesterday, so I’m a little hazy on details.
Fantastic blog. Personally, I have been studying natural gas stokcs over the last several weeks and see tons of growth potential in the next decade or so. The commodity natural gas is about 10x cheaper than right now, but experts are predicting that by 2016 we will start to see a big spike in natural gas prices because of increasing demand and high oil prices. Ive also been following smaller energy companies too such as Alon U.S. Energy Partners, whose stock soared nearly 56% in a 2 week stretch.
[...] Buy another stock entirely (hmm maybe something from my 2012 Hot Stock Picks post lol) I’m leaning towards 1, 2, or 3, in the order of [...]