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At the end of every year, financial publications publish their picks for the next year. This year is no different.

Kiplinger, Fortune, and Forbes have already published their picks for 2018. I anticipate other publications, such as U.S. News, CNN, Money, and others, will publish their picks in the coming weeks. It’s light reading, and certainly generates ideas for investors at the end of the year as they are assessing their 2017 performance and seeing if they can do better in 2018.

But before you jump into reading the 2018 picks, you should know how stock picks for 2017 have performed. Most people quickly forget the picks shortly after they close the webpage or magazine. However, a pick by a star manager might convince some investors to buy. The stock might sit in their portfolios for a few months or years, only to be replaced by the latest hot stock pick.

Kiplinger 2018 Stock Picks

This year, Kiplinger compiled 18 stock picks from their columnists Jim Glassman and Tom Petruno.

Stock Ticker
Applied Materials AMAT
Berkshire Hathaway BRKB
Charles Schwab SCHW
Citigroup C
Cubic CUB
Delphi Automotive DLPH
DXC Technology DXC
Facebook FB
Goldfield Corp GV
Hubspot HUBS
Intuitive Surgical ISRG
Kornit Digital KRNT
Lululemon Athletica LULU
McDonald’s MCD
Microsoft MSFT
Polaris Industries PII
United Healthcare UNH
United Parcel Service UPS

Fortune 2018 Stock Picks

Fortune has a splashy issue every December for their annual stock picks. This year, they have 31 “all-tech” picks divided over six different themes (large tech, bitcoin alternatives, robotics/automation, fintech, e-commerce, emerging markets, and healthcare), but with a common theme, technology (broadly defined).

Stock Ticker
Amazon AMZN
Alphabet GOOGL
Microsoft MSFT
Facebook FB
Nviidia NVDA
Applied Materials AMAT
Infineon IFNNY
Cisco CSCO
Honeywell HON
Roper Technologies ROP
Fortive FTV
Boeing BA
Fanuc FANUY
Stanley Black & Decker SWK
Fiserv FISV
Intercontinental Exchange ICE
Paypal PYPL
Mastercard MA
Wirecard WCAGY
Priceline PCLN
Yum Brands YUM
McDonalds MCD
Alibaba BABA
Tencent TCEHY
Catcher Technology CHERF
AAC Technologies AACAY
New Oriental Education EDU
Alnylam Pharmaceuticals ALNY
Sage Therapeutics SAGE
UnitedHealth Group UNH
Intuitive Surgical ISRG

Forbes 2018 Picks

Forbes compiled twelve stock picks from fund managers around the country.

Stock Ticker
SandRidge Energy SD
Compass Minerals CMP
Steelcase SCS
Ashford Hospitality AHT
Navient NAVI
Sucampo Pharmaceuticals SCMP
Mitel Networks MITL
Siemens AG SIEGY
Shire plc SHPG
Alibaba BABA
J.M. Smucker SJM
Campbell Soup CPB

Tracking The 2018 Picks

In 2018, we’ll track how well the stock picks of Kiplinger, Fortune, and Forbes do. My guess is that some will do better, some will do worse, but since they have enough stock picks, you’ll end up with a market-matching performance, which of course, can also be achieved with an index fund portfolio.

How did the 2017 Picks Do?

But before we turn the page on 2017, let’s look at how last year’s picks of Time, Fortune, and Forbes performed, using data from Morningstar’s Portfolio Tracker tool (returns reported as of December 20, 2017).

Time

Time Magazine recruited four fund managers back in December 2016 to give 3-4 stock picks for 2017. Time compiled these stocks picks in an article, Top Stock Picks From 4 Professional Investors Who Keep Beating the Market. Let’s see how they’ve done.

Stock Ticker 2017
Return
Charles Schwab SCHW 32.07%
Natl Oilwell Varco NOV -8.33%
Union Pacific UNP 29.90%
CVS Health CVS -6.78%
Gilead Sciences GILD 3.35%
Intel INTC 31.13%
Service Corp Intl SCI 32.50%
The Toro Co. TTC 16.10%
Vail Resorts MTN 34.52%
AGCO AGCO 25.08%
Hyundai Motor HYU -3.63%
Kia Motors KIMTF -13.43%
United Overseas Bank UOVEY 37.28%
Average Return 16.14%
S&P 500 Return 22.04%

The average of the 13 Time Magazine picks has returned 16.14%, which underperformed the S&P 500.

Fortune

Fortune Magazine published their 2017 stocks picks (The 21 Best Stocks To Buy For 2017) as part of a larger “Investor’s Guide” at the end of 2016. Here’s how Fortune’s picks have performed:

Name Ticker 2017
Return
B2Gold BTG 21.52%
Bank of America BAC 33.46%
Celgene CELG -6.46%
Check Point Software CHKP 23.57%
Citigroup C 25.63%
Fiat Chrysler FCAU 101.21%
GlaxoSmithKline GSK -8.21%
Lam Research LRCX 78.60%
Newmont Mining NEM 7.46%
Palo Alto Networks PANW 17.89%
Pentair PNR 24.45%
Pernod Richard PDRDY 42.53%
Royal Dutch Shell RDS.A 19.71%
Sberbank of Russia SBRCY 45.04%
Sony SNE 60.65%
SPDR Metals & Mining XME 14.83%
Suncor Energy SU 6.12%
UnitedHealth Group UNH 38.95%
Vail Resorts MTN 34.52%
Varian Medical Systems VAR 39.35%
Williams Cos. WMB -3.50%
Average Return 29.40%
S&P 500 Return 22.04%

Fortune’s picks did really well, beating the market by over 7%.

Forbes

Forbes published their 2017 picks in their end-of-year article “How To Invest in 2017: The Best Stock Picks From 7 Pros“. They polled seven investment strategists to give one stock pick for 2017. Let’s see how they have done:

Name Ticker 2017
Return
General Motors GM 26.41%
ONE Gas OGS 15.37%
USG Corp USG 31.06%
Independence
Realty Trust
IRT 14.86%
Forterra FRTA -52.71%
Dycom Industries DY 35.46%
IBM IBM -8.59%
Average Return 8.84%
S&P 500 Return 22.04%

Forbes’s picks have underperformed the market by a whopping 13.2%. This is largely due to a disastrous performance from Forterra. This highlights the importance of a diversified portfolio, as a single big loser can destroy a portfolio. Obviously, the easiest way to build a diversified portfolio is through index funds.

Conclusion

You’ll probably read a few articles over the next few weeks highlighting the stock picks of various investment managers. I would use these for entertainment purposes only, as we see that the performance of 2017’s picks was lackluster.

What do you think? Do you want to make a stock prediction for 2018 that we can keep track of? How much value do you place in these annual stock picks?

Poll: What do you think of annual stock pick articles?

2 COMMENTS

  1. Looks like a typo, but the Fortune average exceeded the S&P by 7% rather than 9%. Thanks for the fact checking on these predictions.

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