Every year, most of the popular finance (and non-finance) magazines will write articles making stock picks for the upcoming year. Inevitably, the article gets quickly forgotten once the ball drops on Times Square. I don’t know many people who actually follow these picks, but it always makes for good reading. Let’s look at the 2017 stock picks of three leading websites (Time, Fortune, and Forbes), and see how they have performed in the first quarter of 2017.
Time
Time Magazine published an article in December 2016, entitled, Top Stock Picks From 4 Professional Investors Who Keep Beating the Market. They recruited four fund managers who each gave 3-4 stock picks for 2017. Here are the 13 stocks they picked, with their 1st quarter 2017 returns:
| Stock | Ticker | 2017 Return |
| Charles Schwab | SCHW | 3.4% |
| Natl Oilwell Varco | NOV | 7.1% |
| Union Pacific | UNP | 2.2% |
| CVS Health | CVS | -0.5% |
| Gilead Sciences | GILD | -5.2% |
| Intel | INTC | -0.6% |
| Service Corp Intl | SCI | 8.7% |
| The Toro Co. | TTC | 11.6% |
| Vail Resorts | MTN | 19.0% |
| AGCO | AGCO | 4.0% |
| Hyundai Motor | KRX:005380 | 7.9% |
| Kia Motors | KRX:000270 | -5.6% |
| United Overseas Bank | SGX : U11 | 8.4% |
| Average Return | 4.6% | |
| S&P 500 Return | 5.5% |
The average of the 13 Time Magazine picks by their four experts have returned 4.6% through the end of March. This is compared to the S&P 500 return of 5.5%. There have been some good picks by the experts: Vail Resorts has gone up 19% this year, and the Toro company has gone up 11.6%. Unfortunately, there have also been bad picks as well, including Kia Motors (-5.6% return) and Gilead Sciences (-5.2% return).
Fortune Magazine
Fortune Magazine also published an “Investor’s Guide” which included a list of stock picks for 2017 (The 21 Best Stocks To Buy For 2017). Let’s see how Fortune’s picks have done so far this year:
| Name | Ticker | 2017 Return |
| B2Gold | BTG | 19.4% |
| Bank of America | BAC | 6.7% |
| Celgene | CELG | 7.5% |
| Check Point Software | CHKP | 21.5% |
| Citigroup | C | 0.7% |
| Fiat Chrysler | FCAU | 19.8% |
| GlaxoSmithKline | RDS.A | -3.0% |
| Lam Research | LRCX | 21.7% |
| Newmont Mining | NEM | -3.3% |
| Palo Alto Networks | PANW | -9.9% |
| Pentair | PNR | 12.0% |
| Pernod Richard | UNH | 2.5% |
| Royal Dutch Shell | PDRDY | 9.5% |
| Sberbank of Russia | SBER | -7.8% |
| Sony | SNE | 20.3% |
| SPDR Metals & Mining | XME | 0.0% |
| Suncor Energy | SU | -5.9% |
| UnitedHealth Group | UNH | 2.5% |
| Vail Resorts | MTN | 19.0% |
| Varian Medical Systems | VAR | 1.5% |
| Williams Cos. | WMB | -5.0% |
| Average Return | 6.2% | |
| S&P 500 Return | 5.5% |
Fortune’s picks have done pretty well, beating the market by 0.7%. Six of its 21 picks have gained more than 19% in the first quarter of 2017, including Lam Research, Check Point Software, Sony, Fiat Chrysler, B2 Gold, and Vail. It has had some misses, with Sherbank of Russia being its worst pick (-7.8% return).
Forbes
Forbes also published an article outlining its 2017 picks, “How To Invest in 2017: The Best Stock Picks From 7 Pros“. They asked seven investment strategists to each give one stock pick 2017. Here is what they came up with:
| Name | Ticker | 2017 Return |
| General Motors | GM | 1.6% |
| ONE Gas | OGS | 5.7% |
| USG Corp | USG | 10.1% |
| Independence Realty Trust |
IRT | 5.0% |
| Forterra | FRTA | -10.0% |
| Dycom Industries | DY | 15.8% |
| IBM | IBM | 4.9% |
| Average Return | 4.7% | |
| S&P 500 Return | 5.5% |
Forbes’s picks lagged the market, dragged down by Forterra, which fell 10% in the first quarter. Dycom Industries was the best pick of the group, gaining 15.8% so far in 2017.
Conclusion
The performance of the investment professionals from these three large publications shows that its not easy to beat the market with individual stocks. For Time and Forbes, each of these investment professionals only had to pick 1-4 of their very best ideas to be published. While it might be hard to pick a diversified list of 20-30 stocks, each of these pros only had to give their very best stock picks for publication.
Unfortunately, two of the three publications already are lagging the market, and the third publication (Fortune) only beat the market by 0.7%. With many actively managed mutual fund charging a 1% annual fee, even Fortune’s picks could potentially under-perform the S&P 500 after fees.
It’s easy to cherry-pick your results when you have a large list of 10-20 stocks. Each of the three publications could cite one or more of their picks that has significantly outperformed the market. These are the picks that you hear about in subsequent interviews or at cocktail parties. You usually won’t hear about the losers, and all of the publications had at least one pick that has gone down in 2017.
To be fair, we are only three months into 2017, and the final results of 2017 could be very different (up or down) than what we see now. We will do follow-up articles to see how the predictions of Time, Fortune, and Forbes ultimately fare.
What do you think? Do you read these annual lists of stock picks? Do you think they typically outperform, underperform, or match the S&P 500?
So is the Trump stock rally over? I guess time will tell.
Thanks for pointing out more reasons to not buy individual stocks. A index fund always seems like a low maintenance, low cost way to get ahead.
I have no idea. The market is looking to see what kind of financial and tax regulation reform gets passed, and DC politics is probably harder to predict than the stock market…
Hello, as a newbie to cryptocurrency trading, I lost a lot of money trying to navigate the market on my own, then in my search for a genuine and trusted trader/broker, i came across Trader Bernie Doran who guided and helped me retrieve my lost cryptocurrencies and I made so much profit up to the tune of $100,000. I made my first investment with $2,000 and got a ROI profit of $25,000 in less than 2 week. You can contact this expert trader Mr Bernie Doran via Gmail : BERNIEDORANSIGNALS@GMAIL.COM and be ready to share your own, tell him you were referred by me
I always love reading what the experts have to say. I usually don’t follow hot stock tips as much as I enjoy the entertainment aspect and to hear what people value but seems like it’s pretty much what usually happens. The experts normally underperform 🙂
Yea, Jim Cramer is very entertaining on Mad Money but who knows how well his picks actually perform.
I’m glad to see my 2 minutes of work buying SPY is outperforming 2/3 experts and their team. Time is also a big factor in investment to me. Especially with our earning potential at practicing medicine vs anything else.
Tom @ HIP
I agree. Simplicity is very valuable in personal finance, and managing a basket of stocks can be very time-consuming.
My name is Tom Peacock from USA, I want to say thank you to Dr Emu for the good thing he has done for me, Though am not sure if this is the best forum to show my joy and happiness for what he has done for me but i can’t hide my happiness and my joy so i have to share it with people, my marriage got crashed about two years ago and i tried all i could within my power but to no avail. I saw a post and testimonial about the good things Dr Emu has been doing so I decided to give it a try. though he is always a busy man but when he responded back to my email, he gave me 48 hours for my marriage to be restored really just like he said my marriage was restored since then I am happy and i am living happily i am so grateful to Dr Emu you can always email him here: {emutemple@gmail.com} or WhatsApp: {+2347012841542}