Barron's portfolio is #winning

The financial newsletter's top picks have been performing Charlie Sheen style.

By Benzinga Jul 8, 2013 6:11PM

Barron's, the weekly investor newsletter with a cult-like following, this weekend published the performance for its top picks for the first half of the year. To put it simply, Barron's is simply #winning, Charlie Sheen style.

Beating the benchmark

Portfolio managers know that performance is all about beating the benchmark. For the first half of 2013, Barron's bullish portfolio has gained 7.4% vs. the 3.0% gain for its benchmark and 2.7% gain for the S&P 500. For its bullish picks from 2009, the portfolio is up 23.3% from inception, besting the benchmark's gain of 18.1% and the S&P 500 at 16.1%.

Barron's constructs portfolios out of stocks that it writes about, both bullish and bearish. In the first half of 2013, Barron's made 67 bullish calls on stocks and six bearish calls, most notably on Tesla Motors (TSLA).

Barron's 2013 bearish picks were down a whopping 21.2% in the first half of 2013, beating its benchmark which rose 2.3%. However, its 2012 bearish picks rose 23.4% vs. the benchmark gain of 19.8%, meaning that only these picks underperformed.

Bullish stock picks

The bullish portfolio saw an average stock return of 7.4% in the quarter with only 20 of the 67 recommendations declining from the date of the bullish article being published. Three stocks, Chiquita Brands (CQB), New York and Co. (NWY), and Delta Air Lines (DAL) all rose more than 40% since the date of recommendation. Additionally, eight other stocks rose more than 30% since the date of recommendation.

One stock that Barron's recommended to be long that has declined since the article was published is Apple (AAPL). Apple shares were recommended to buy on Jan. 28 at $439.88 only for the stock to fall to $396.53 on June 28. However, Apple shares regained some ground last week and closed at $417.42 on Friday.

Tesla strength a bane

Barron's recommended shorting six stocks over the first half of the year, most of which worked except for Tesla Motors. Barron's recommended shorting the following six stocks in the first half of 2013:

  • Uni-Pixel (UNXL) was recommended short on May 13 at $34.75 and finished the first half down 57.8% at $14.66.
  • Sabesp (SBS) was recommended short on April 29 at $14.53 and finished the first half down 28.3% at $10.41.
  • Globe Specialty Metals (GSM) shares were recommended short on March 18 at $14.75 and finished the first half down 26.3% at $10.87.
  • Intuitive Surgical (ISRG) shares were recommended short on Jan. 28 at $577.82 and finished the first half down 12.4% at $506.13.
  • Linn Energy (LINE) was recommended short on Feb. 18 at $35.93 and finished the first half down 7.7% at $33.18. However, shares fell sharply last week further and closed at $23.21 Friday after disclosing an SEC investigation last week for accounting irregularities.
  • Tesla Motors (TSLA) shares were recommended short on June 10 at $102.04 and finished the first half up 5.2% at $107.36. 

Tesla shares have actually risen further in the last week, gaining to new highs over $120 per share on news of stronger sales in Hong Kong than previously expected. However, Barron's, along with many others, remain negative on the stock as the short float percentage has reached nearly 32%.

What's the point?

If you invested in the Barron's portfolio, you would have made money. So maybe investors should take some capital and invest in the Barron's portfolio, by investing in stock that they recommend. After all, they are #winning.

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