Summer is upon us, and since I’ve been trying to focus on paying down my line of credit & getting my house ready to sell unfortunately my portfolio hasn’t seen too much action. I thought now would be a good time to do a quick fun post in relation to:
- My Worst Ever Stock Pick
- My Best Performing Stock Pick (to date)
- What I’d buy right now if I had some extra cash aka my “Top Pick”
My Worst Ever Stock Pick: TallGrass Energy
My worst stock pick – also happened to be my FIRST stock pick. I was young and impressionable (also known as an idiot). I took the advice of an older friend who had a “hot tip”. At the time I think deep down I knew it was a bad idea but pulled the trigger anyway after doing about 2 minutes of “research” on the company. I made my first trade that day and spent $1000 on 2600 shares. Looking back this had all the warning signs:
- A “hot tip” from a guy with no track record
- A penny Stock
- A company I had never heard of
- Purchase made with zero due diligence done
The company is now bankrupt and my shares are worth nothing. It was an expensive lesson – but a lesson learned nonetheless. I keep the 2600 shares in my brokerage account as a reminder to always do my own research and to never listen to any “hot tips”.
My Best Performing Stock(so far): Organigram Holdings
Organigram(OGI) is an East Coast based supplier of medical marijuana. This company has had some ups and downs this year: losing their organic certification due to pesticides found,(currently in process of getting certification back), potential class action lawsuit, partnering with the Trailer Park Boys, etc. This has caused the stock to be extremely volatile (which I expect to continue until full legalization).
I took my first position in OGI at $0.44. Today it is trading at $2.22. (It has traded as high as $4.49) I fully expect it to continue to dip and rally over the next few months. I bought this stock for the long haul – and I intend to keep it – but it is not for the faint of heart. The stock consistently gains or loses 10-15% of its value in a single trading day.
Although OGI is my best gaining stock (so far) it’s not my favorite stock I own. Don’t get me wrong – I will continue to hold, and expect more growth – but there are a few others I like a bit better. Over the past 6 months I’ve continued to buy on some of the dips but don’t plan to increase my position as I am happy with the % allocated in my portfolio.
My Top Pick: Caledonia Mining
Caledonia is a Mining, Exploration and Development company focused on Southern Africa. They are one of the lowest cost producers in the world and as long as you can stomach the fact that they operate in Zimbabwe, and that volume is fairly thinly traded* all their operating metrics look great:
*Currently in plans to trade on the NYSE which should increase volume*
- The company pays a healthy dividend which it increased in July 2016
- EPS: 0.26
- P/E Ratio: 6.6
- 18% increase in gold production year over year
- -9% decrease in cost per ounce to produce
- +98% increased Net Profit year over year
Caledonia has paid consistent dividends since 2014 and is covered 2.9 times by earnings & 7.7 times by operating cash flow. They are on track to produce 80,000 ounces by 2021(to put that growth into perspective they produced 50,351 in 2016).
I plan to update my “top pick” at least once a year – as well as look back on them and see how they performed.
Do you have any Worst, Best Or Top Picks? If so – I’d love to hear about them.