As we enter the final week of 2016, now seems like a good time to reflect on the year it has been. If you look at the BNL Portfolio, it is clear that 2016 has been great for BNL Finance. The portfolio gained approximately 30% for the year, which is almost 200% better than the S&P 500!
Clearly, we have had some good calls along the way. However, in this reflection piece, we are not so much focused on what stocks performed best (that we picked), but rather what we learned the most from. After all, trial and error, and learning from your past experiences is most crucial to becoming a good investor. Therefore, here are our top calls from 2016, the stocks that our analysts Brian (owns & manages the BNL Portfolio), David (David’s Dividend Portfolio), and Eddy (Eddy’s Options) all learned the most from.
The calls include RAD, AMZN, BMY, FNMA stock & BAC stock among many others.
Most of the following calls were exclusively available to BNL Members via text, email, and app notifications when stock ratings or trades are made in any of our premium portfolios. (learn more)
Brian’s top calls: RAD, UAA, AMZN, FB, FNMA stock
BNL Members may be surprised to see what Brian considers his “top calls” of the year. However, here is why Brian considers these calls so important:
Brian: Of all the calls, I’d say that Rite Aid Corporation (NYSE:RAD) is probably my best of the year. I pounded the table all July, and then again when RAD stock tumbled in October. After years of great attention to the M&A space, I knew the arbitrage on a security like RAD stock was too large versus the relatively minor risks.
It just seemed the market was not seeing what was right in front of their eyes, and I am happy that those who listened are now sitting pretty with gains of 20% to 30% over a month’s time. RAD stock is one that many investors will look back on in regret, not knowing why they sold when RAD was falling. Thank god I was a voice of reason, and most BNL Members listened.
Furthermore, I have owned RAD since $1.30. Therefore, I kind of feel like a proud father who watched his son grow from a troubled youth to marry a good woman and get his shit together.
I added Fannie Mae (OTCMKTS:FNMA) to the BNL Portfolio for less than $2 in the second quarter. FNMA stock has more than doubled from my investment, but what’s ironic is that it carries a weight of less than 3% in my portfolio. Everyone keeps asking why I don’t trade it, take profits, or have held through so much volatility. I’m most proud of the fact that I continue to hold FNMA stock, and that people are finally starting to realize its potential. I still believe that if deregulation and the election of pro-GSE reform goes how I expect that my current position in FNMA stock could very well be worth 10% of my portfolio within the next couple years. That’s without adding to FNMA stock.
Finally, Amazon.com Inc (NASDAQ:AMZN), Facebook Inc (NASDAQ:FB), and Under Armour Inc (NYSE:UAA) are all companies I like very much. In fact, I mostly wear Under Armour; I mostly shop on Amazon.com; and most people I know are obsessed with Facebook. I know these will be great long-term investments. However, AMZN, FB, and UAA stock are all too expensive.
With the exception of UAA, AMZN and FB stock were two of the highest rated stocks under coverage in past years. I let both FB and AMZN stock run higher, closed out my bullish calls with both FB and AMZN at all-time highs, with gains of 41% and 51%, respectively, but then we downgraded both and issued “Underperform” outlooks. FB was at $126 and AMZN was at $830 at the time of those downgrades. What made this so meaningful to me is the fact that everyone else on the street was upping their targets and doubling down, including countless $1,000 price targets for AMZN stock. We saw clear, and I am happy about that.
In regards to UAA stock, we initiated bearish coverage at $45/share. I think we were right about that too.
Eddy’s top calls: XPO, SGEN, OPK
Eddy: Earlier this year I looked throughout the market and decided that nothing came close to the upside of XPO Logistics Inc (NYSE:XPO). As an options trader, I am prone to take risk, but putting 75% of my portfolio in XPO stock was a bold move.
Yes, XPO stock has surged 60% this year, but when I bought a mixture of calls and stock in XPO Logistics at an average price near $25, the market was not overly optimistic on the company’s outlook. Fortunately, I did not have to wait long, and it is nice to know that the BNL Members who followed this strategy had a Christmas for the ages.
In biotechnology, I’m glad to see OPK and SGEN up about 30% since my call to BNL Members. These are two of my favorite biotechs that I think are going much, much higher.
David’s top calls: EOG, CHK, BAC, DIS, BMY
David: I take the long-term road, and do not trade like Brian Nichols or Eddy Parton. Given their performance and my conservative approach, it’s nice to see that all of my picks and investments in 2016 are outperforming the market.
Bank of America Corp (NYSE:BAC) was probably my most talked about investment in the BNL Member community. I bought $400,000 of BAC stock at $15.50 and made a case on why BAC stock could double over the next 16 months. Typically, I am a dividend and income investor, but the opportunity in BAC stock was too good to ignore. I am confident it will remain that way as dividends and buybacks become a bigger part of the BAC stock story.
EOG and CHK are up 30% and 50%, respectively, since I bought them. I think EOG is one of the best long-term investments in the market.
I saved the best for last: A $1,000,000 investment in Bristol-Myers Squibb Co (NYSE:BMY) under $50 on the day its checkpoint inhibitor data sparked a massive selloff. I had been waiting for an opportunity to invest in BMY at a cheaper price and I felt the sell off ignored BMY’s underlying business, and created the opportunity I sought. I can’t count how many analysts downgraded BMY on that day. Fortunately, there have not been too many down days since, and my 20% gain in BMY has outperformed the market many times over. Plus, I got a good dividend from it.
I tend to wait for opportunities like BMY to create good entry points in dividend stocks and long-term investments. Once I buy something, I don’t plan on selling for a long time. Another example was my near $700,000 investment in DIS when it was trading near $90 earlier this year. Like BMY, analysts thought the world was crumbling around DIS. I think I did pretty well on that one too.