As 2008 comes to an end, investors are turning their sites on 2009, hoping the new year will erase the worst 12 months on equity markets in recent memory.
To that end, Raymond James has published their best picks for 2009, in what is surely the first of many "best of" lists that Canada's brokerage houses will provide to clients in the next few weeks.
Daryl Swetishoff, head of investment research at Raymond James, said the individual list of 13 equities chosen as best picks were done so based on expectations of their outperformance in relation to other stocks under coverage. That said, Mr. Swetishoff is quick to point out there is no guarantee.
In 2008, he noted, Raymond James' 14 analyst-selected stocks returned - 59.6% on average compared to - 55.4% for the S&P/TSX SmallCap Index. In 2007, the best picks list returned 13.9% versus - 3.5% for the SmallCap benchmark and in 2006, it netted 15.4% versus 7.8%. Since 2003, the annual list has provided an average return better than the Index in all but two years (2003, 2008).
Mr. Swetishoff said:
We expect these companies and stocks to do well over the course of 2009, but our advice for investors remains, as it has always been – select high-quality companies and invest for the long term.
Based on analyst price targets, the 2009 best pick list is expected to average a total return of 165% over the next twelve months. Macdonald Dettwiler & Associates (OTCPK:MDDWF) has the lowest expected return of 44%, while Quadra Mining Ltd. (OTC:QADMF), the only holdout from last year's list is expected to increase a whopping 850% to C$21.
Down 86% year-to-date. Quadra gets high marks from analyst Tom Meyer, for its debt free balance sheet and diversified copper and gold assets.
He added that Quadra's 100%-owned Sierra Gorda copper project "is a company making asset" due to its size and location in Chile.
Also on the 2009 list are:
Bird Construction Income Fund (OTC:BIRDF), Bonavista Energy Trust (OTCPK:BNPUF), Canadian Apartment [CAP] REIT, Canadian Natural Resources (NYSE:CNQ), GLV Inc. (OTC:LVGAF), Gran Tierra Energy Inc. (NYSEMKT:GTE), Hathor Exploration Ltd. (OTC:HTHXF), International Royalty Corp. (ROY), Ritchie Bros. Auctioneers (NYSE:RBA), Trinidad Drilling (OTCPK:TDGCF) and Yamana Gold Inc. (NYSE:AUY).