Analysts Look Back: Our Biggest Regrets of 2012
Dec 21st 2012 10:30PM
Updated Dec 21st 2012 10:34PM
Over the past year, three Foolish analysts -- Travis Hoium, Alex Planes, and Sean Williams -- have come together to decide whether certain stocks were worth your money or if you were better off staying away. We've been debating the merits of individual stocks all year, and after 21 up-or-down picks, we're beating the S&P 500 by nearly 200 points. However, not all of these selections have gone our way. Sometimes we make choices that later come back to haunt us, and at times we make choices that our two fellow Fools disagree with but that turn out to be right in the end.
With that in mind, we'd like to take a look back at both our biggest regrets of all our selections this year and the one debate that we point to when it's time to say, "I told you so!" Read on, and you just might avoid making the same mistakes.
Alex: Why didn't we red-thumb Zynga (NAS: ZNGA) a second time after closing our call in June? You can short a stock as many times as you want, and we could have easily doubled our point gain on that stinker of a social-gaming stock by reopening it for another three months. I also regret not buying shares of Green Mountain Coffee Roasters for my personal portfolio when we made the outperform call, because it's not all that often that I find something so obviously undervalued.
Travis: We should have debated Facebook (NAS: FB) on the day of its IPO. This was one of easiest underperform call we've had but we left a lot of "profit" on the table by missing out on giving a red thumb at a higher price. It isn't often that an overhyped IPO like that comes along and, after the performance of Zynga and Groupon post-IPO, we could have gotten in sooner.
Sean: So far, that'd have to be green-thumbing Chesapeake Energy (NYS: CHK) in spite of the fact that I think the assets are grossly undervalued. One of my prime rules for stock picking is to buy into companies where I believe in the management team. Chesapeake CEO Aubrey McClendon is a lifetime offender when it comes to corporate governance, which earned him second place in this year's "Worst CEO of the Year" voting. That should have automatically thrown up my suspicions about Chesapeake and kept me on the sideline.
I told you so!
Alex: Guys! Why did you think Chesapeake Energy was going to be a big winner in August? Both of you distrust its CEO (to say nothing of his turnaround vision), but you still saw better days ahead for a company reliant on a fuel source that's barely profitable at scale. Large energy companies can be cyclical, and I don't think the cycle has turned yet to favor natural gas producers. We've been waiting for a nat-gas rebound for years, and I think waiting longer, if not going the other way, would have helped our score.
Travis: The biggest losers in our portfolio -- Amazon and Intel -- were actually unanimous picks so I can't pick those. So, I'll go with our underperform call on Carnival (NYS: CCL) , which smelled fishy to me at the time. I compared the Costa Concordia disaster to the BP oil spill two years ago, which was a decent time to buy BP's depressed stock. Sometimes emotion gets in the way of great stock picks, and this seemed to be the case with Carnival.
Sean: I told you guys that ATP Oil & Gas was on its death march and both of you decided that it'd be better to wait on the sidelines. Instead, we missed out on a 100% gainer because ATP declared bankruptcy just three months after our debate. The company, which had made significant oil finds off of Israel and operator deepwater wells in the Gulf of Mexico, had $1.5 billion in debt due in 2015 and couldn't find a way to make a dent into or restructure its debt. This seemed like an obvious down-thumb, but that's the way the cookie crumbles sometimes.
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The article Analysts Look Back: Our Biggest Regrets of 2012 originally appeared on Fool.com.Fool contributor Alex Planes owns shares of Intel, and Fool contributor Travis Hoium manages an account that owns shares of Intel. Fool contributor Sean Williams has no positions in the stocks mentioned above. The Motley Fool owns shares of Amazon.com, Facebook, and Intel and has options positions on Chesapeake Energy, Facebook, and Green Mountain Coffee Roasters. Motley Fool newsletter services recommend Amazon.com, Facebook, Green Mountain Coffee Roasters, and Intel. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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