This is an update to the previous article; 5 Stock Picks for 2013.
In January, I advised buying the following stocks: Phillips 66, Intel, Northern Tier Energy, Illumina, and HollyFrontier Corp for varying reasons. With the close of the second quarter is coming, I believe an update to be at hand.
1. Phillips 66 Company (PSX):
In January, I advised PSX as a buy due to the companie's overall numbers and general outlook. To be blunt (and simple), it was just a solid company. Fortunately, not much has changed. PSX has seen continued growth, rising as much as 37% (at $70.52) from its price when I suggested it. It took a hit in early April, but has since rebounded and is currently up nearly 25% (including dividends). Both PSX's numbers and outlook are still strong, and had strong Q1 earnings. Not to mention, it has a dividend right around the corner (ex-dividend date of 5/16). I advise holding PSX, at least until it reaches the high $70s, which would yield a profit of around 50%.
2. Intel Corporation (INTC):
Admittedly, INTC struggled at first, hovering around the same price, with semi-frequent dips; however, since early April INTC has been picking it up. Including dividends, it currently is up 15% since I first recommended it and I don't think it's done yet. Despite small drops, its TREFIS price estimate is still around $28 and it still gives a solid dividend of nearly 4%. I think INTC will at least approach $30 in 2013 (which would yield approximately 40%), and recommend holding it until it does.
3. Northern Tier Energy LP (NTI):
NTI got hot soon after I wrote about it, hitting $33, which (with the Q1 dividend) yielded almost 40%. I thought selling at about $31. Although this evidence could be seen as vague, I did express doubt of its continued rise on March 11 (when it was at $31.33).
Since its high, it has dropped to around $26, which is just 9% up (with the dividend) from its original price; however, I'm pretty sure it will pass $30 again. To be honest, I think NTI has big potential, possibly even reaching the high $30s (which would deliver close to 60%), but it also presents some risk since its ridiculously high dividend, among other factors, results in some volatility. I would hold until NTI breaks $30 and probably sell soon after; you may miss out on some further returns, but you'll also avoid some big-time risk.
4. Illumina Inc. (ILMN):
ILMN finally came through for me. It had me worried for a while, but with its recent trend has become the most successful pick on the list. It currently sits at almost $71 (up 35%). Due to its initial stagnation and even decline, I am a little more skeptical of ILMN — which is admittedly irrational, thus one of the dumbest ways to evaluate stock picks (using emotion). Nonetheless, I would probably sell ILMN right about now for a cool 35%, but I could see it hitting the mid $70s at some point.
5. HollyFrontier Corporation (HFC):
Similar to NTI (just a bit earlier), HFC went on a tear in early 2013, almost reaching $60 (and giving a profit of nearly 40%). Also similar to NTI, HFC has since taken a hit, currently sitting at just under $48. This still leaves it up 11% (with the dividend), but 11% isn't 40%. I pulled the trigger a bit early on HFC, saying sell at just over $54, yielding 27%.
Poor earnings hurt HFC, but I tend to think it will bounce back, at least approaching the mid $50s. I would most likely hold until then, but I do think it is possible that HFC drop is not done yet.
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