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Barron's Trader Stock Picks Had a Better Year Than the Market. What Worked -- and What Didn't.

Barron's · 01/06/2023 21:16
By Ben Levisohn

It was a good year for the Trader column -- and we're not going to let a little thing like a small decline get in the way of our saying it.

In any other year, we might have called our picks lackluster or even mediocre, given that the stocks -- chosen by various Barron's staffers -- dropped 0.8% from the trading day before the pick through the end of the year. But relative to the stock market, we knocked it out of the park. The S&P 500 dropped 5.8% over the same period as our picks, which means our picks outpaced the index by five percentage points.

We had our share of stinkers, and by "we" I mean "I." Mattel (ticker: MAT) underperformed by 16% after I picked it in July, while Petrobras (PBR) slid 24% after I recommended it near the time of Brazil's election. My biggest loss, though, was in Upwork (UPWK), a platform for companies looking for freelancers. It was a technical call, and one that failed miserably, with shares falling 57% over a period in which the S&P 500 declined just 1.5%.

Thankfully, we got it right more often than not. We recommended buying Vertex Pharmaceuticals (VRTX) on Jan. 7, as concerns about a competitor's cystic fibrosis drug looked overdone. It gained 44% through the end of the year. Our call on Chewy (CHWY) on May 2, just before it reported earnings, worked out well too, with the stock gaining 44% after a surprise return to profitability. Other big winners included Teresa Rivas' March 4 recommendation of Foot Locker (FL), which gained 39%, Al Root's AerCap (AER) call -- the stock ended up rising 34% -- and Karishma Vanjani's Planet Fitness (PLNT) pick, which rose 21% since she flagged it on Nov. 2 as a beneficiary of Peloton Interactive's (PTON) problems.

The call we're most proud of was one made before 2022 began, when I warned the year would start off badly. I initially expected a late-year bounce, but few predicted that the Fed would raise rates at such an accelerated pace, that Russia would invade Ukraine, or that China would stick with its zero-Covid policy for a third year. We stayed bearish, and we're glad we did -- 2022 was a year for trading, not investing.

We can't help but think the volatility will linger into 2023. The U.S. financial markets have shifted away from free money, and ridding the system of the excesses created by the government's and the Fed's response to Covid will take time.

Picking stocks will be more important than ever, and we'll try to keep it up in the new year.

Write to Ben Levisohn at Ben.Levisohn@barrons.com

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January 06, 2023 21:16 ET (02:16 GMT)

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