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The Herald has already asked the likes of Jarden, Craigs and Hamilton Hindin Greene for their top five NZX prospects for the year ahead.
But how do the likes of "silverblizzard888" and "baldie" see 2020's top performers?
Below, Oliver Mander collates picks from his fellow retail equity investors in the Sharetrader forum - individual punters who put their money where there mouth is.
In late December, the Herald canvassed the broker community to gain their insights into the stock picks to watch in 2020.
READ MORE:
• Brokers' Picks: The hot stocks to watch in 2020
Similarly, the NZ retail investor community runs a "picks competition", with Sylvester Cat surveying and summarising the top picks. Conveniently, Sylvester (aka, me) publishes the results, together with a pithy commentary, on a weekly basis right here.
There's always plenty of insight to be had from this competition. The game offers a broader "sample" than the brokers, with a total of 196 entrants. The results also summarise returns against both the NZX50 and a "cash" portfolio.
For active investors, the goal is to achieve a better-than-market return in the long term, so the comparisons are viewed with interest.
It also shows the Herald broker choices in comparison to all entrants - including the addition of a "Sharetrader Top 5". These are the five most popular stocks picked by the retail investor community; essentially, the consensus view of all participants.
A total of 108 different shares have been picked by the entrants to the 2020 competition.
The Sharetrader "Top 5" contains three stocks (a2 Milk, Oceania Healthcare and Plexure) that were also picked as the top stocks for 2020 in the Herald Brokers' Picks.
A2 Milk has been an NZX darling for more than two years, as it continues its growth journey in China. It is also now making strong inroads into the US market for fresh milk, likely to underpin growth and return expectations for the year ahead.
Oceania is one of five NZX-listed retirement shares, a sector that is in demand right now for consistency of returns and the opportunity to profit from a strengthening property market. The ongoing takeover of Metlifecare has enhanced the attractiveness of this sector.
Plexure Group has been a quiet, although explosive, performer for the last two years, with a rise in its share price from 24c to 76c in that period. The digital marketing company has a close affiliation with McDonald's, which became a cornerstone shareholder last year.
The other two stocks (Blis Technology and Serko) are not well-covered by brokers, and are unique to the Sharetrader community. Both produced strong share price growth during 2019, although it remains to be seen whether this continues in 2020.
Blis, a manufacturer and marketer of specialist probiotic throat medicines, has been on the NZX for a long time, but recorded a small maiden profit during 2019, with a corresponding increase in share price.
Serko has a global footprint in the provision of corporate travel and booking software, with a growing presence in the major US market. A deal late last year saw industry leader Booking.com take a major stake in the company, underpinning significant share price returns late in the year.
For both companies, the consensus outlook seems focused on continued international growth during 2020, with acquisition speculation acting to underpin Serko's share price.
A consensus view does not always drive the best outcome. Indeed, for 2019 the Sharetrader Top 5 produced a return of 29.6% - slightly below the NZX50 return of 30.4%. On the flip side, however, this was in the middle of the range among the Herald Brokers' Picks (5.8% - 51.7%).
The top place-getters in the 2019 competition, produced returns well in excess of the market and professional brokers.
There is little commonality amongst this group of top-performing entrants, with a total of 17 stocks featured in their 25 picks. Plexure Group (PLX) offers some commonality, picked four (out of five) times.
The table below shows what these same fine individuals picked for 2020.
Again, commonality is a dirty word, with 16 different share selections out of 25. For 2020, it would seem that Blis Technology (BLT) is favoured among the 2019 top-performers, picked four times. Plexure Group (PLX) again features strongly, picked three times, with a2 Milk (ATM), IkeGPS (IKE), Oceania Healthcare (OCA) and Serko (SKO) all picked twice.
The lack of commonality should not be a surprise. Different investment strategies suit different investors, in a reflection of their own circumstances. An aggressive investor looking to create long-term capital growth is very different to an investor looking for the highest possible dividends for cash income to live off. Timeframes also play a role; while it is feasible to invest for a single year, most investors operate on a longer time horizon. A trader, meanwhile, will operate on much shorter (even daily) timeframes.
This competition simply exposes the shares that are "top of mind" for individuals, given their differing investment approaches and appetite for risk.
Of course, a strong past performance by any entrant (or company) is no guarantee that they will continue to perform strongly in future.
Perhaps the key message from the NZ Share Picks game is that it's better to be "in the market" than not participate at all.
Thanks to KiwiSaver, most New Zealanders participate in equity markets, whether they realise it or not. Increasing market participation helps everyone in the long term: companies looking to raise capital; young people looking for savings growth in a low-interest rate environment; and older investors looking to sell investments as they access funds for retirement.
If a competition like the NZ Share Picks game helps people realise that they can actually participate directly in New Zealand's equity market, then that's a good thing.
It's worth remembering that this is a game, with a defined timeline and some very specific rules - essentially a "buy and hold" strategy for a single year, with no opportunity to adjust as events unfold during the year.
Nothing in this article, or the selections made by contestants, should be construed as any kind of financial advice. People should consider speaking to an authorised financial adviser before making any investments of any kind.
Oliver Mander has a family investment company and works as a business planner and strategist.
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