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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 |
| 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 |
| 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?
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.
Thanks for letting me know! I’ve corrected the typo in the post.
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