For 2010, selecting the Top Picks is more difficult than for 2009 because there is no fracture in the market. In fact, many believe the total market to be at or near full value. As a result, returns are likely to be more modest for the full year than the 189% return reported so far for 2009. I have attempted to find stocks that could produce performance momentum during 2010 that may be ahead of the total market. As a result, there are a few more riskier picks this year than last year.
The general themes remain the same for 2010 as for 2009. There is an emphasis among the picks on mobility - both infrastructure and applications - and on transactional systems with recurring revenue models. All of the companies on the list (so far) now have solid, or at least de-risked, balance sheets and strong probabilities of generating growth in operating earnings during 2010.
Here is the list:
Overall, 2009 has been a fun ride for RES Free Thinking with the Top 5 Tech Picks returning 184.9% from the beginning of the year, and 156.9% since the market lows during the week of March 8, 2009.
On Tuesday, Descartes Systems (TSX:DSG) reported Q3 2010 earnings with revenue up 11% to $18.9 million from $17.0 million reported for previous year Q3, and 2% higher than revenue reported for Q2 2010. Revenue was essentially inline with consensus forecasts which were $18.5 million for the quarter.