Majority of Picks Are Small Caps
On December 6th, Fortune Magazine published its top ten stock picks for 2011. The theme is growth, and the goal was to pick growth stocks with below-market multiples. Fortune notes that the ten stocks "are expected to bolster their profits an average of 61% next year - vs 14% for the S&P - and yet they trade at an average of 12 times next year's earnings, vs. 13 times for the S&P".
But there is an issue with this comparison - only 3 of the picks are in the S&P 500 - the picks are primarily small caps and should be compared accordingly as Fortune promotes its efforts to beat the S&P 500. LikeAssets is now tracking the picks, and the portfolio is currently +4% against the LikeAssets benchmark which includes a blend of small and large cap indexes.
Here is how the picks were asset classified (click to enlarge images):
Returns and Alphas for the Picks
The picks were made as of December 6th, so there is not much history so far. Here is how the portfolio of picks has fared so far.
And here are the individual positions and their performance since 12/6/2010:
Historical Performance
I also took a look at the performance of these picks in 2010. The picks soundly beat the LikeAssets benchmark by 34% in 2010. The picks would have been winners in 2010.
Best and Worst Picks - 2010 Performance
During the past year, the best performers have been ENTR and RCL, up 290%/80% respectively. They beat the benchmarks by 261%/57%. RIG was the only loser, down 19%, and 42% under its benchmark.
Historical Performance of Fortune's 2011 Top Stock Picks
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
