Barron’s Stock Picks 2023: How They Performed

Those omissions proved costly on the scorecard of Barron’s 2023 stock picks. The 77 companies featured in bullish articles returned 9.9% on average from the date of publication to the end of the year. Their benchmarks returned 12.7% from the same dates. The two bearish picks featured in the magazine moved in opposite directions, for an average gain of 30.2%.

Beyond the costly omissions, there were mistakes of commission, too. In some cases, we fell short because we picked value stocks that turned out to be cheap for a reason. That included
Pfizer,
the subject of a cover story in February. Its sales declined as fewer people got its vaccine booster and Paxlovid treatment for Covid-19. The company’s pipeline may be promising, but investors aren’t yet ready to value it at a high multiple.

Rental-car company
Hertz Global Holdings
fell, too, after its decision to stock more electric vehicles ended up squeezing its bottom line. Repair costs for the EVs were higher than expected and residual values were weak, depressing earnings. Nonetheless, Barron’s still thinks the stock is worth buying, picking it as one of the 10 most promising stocks for 2024, given the oligopolistic nature of the industry and Hertz’s attractive valuation.

Stocks picked by Barron’s writers are tracked in real time on Barrons.com, and the performance is reviewed in an article once a year. Not every stock written about on the website or in the magazine ends up being tracked. Stories that highlight more than three names aren’t included, and those highlighted in columns don’t make the cut, either—although columnists often review the performance of the stocks they have written about. If a writer follows up on a pick and decides that the stock is no longer attractive, the stock’s gain or loss is locked in at that level.

The picks are measured against the S&P 500, the
S&P MidCap 400,
or the
Russell 2000,
depending on market value.

Barron’s made several notably successful picks in 2023. Tesla was the most high-profile of them. With the stock languishing in the low $100s near the start of the year, it looked set to rebound. After doubling, it now looks less attractive—but still worth holding in a portfolio at a more modest weighting.

There were several under-the-radar Barron’s picks that also did well.
Frontier Communications,
for instance, is a telecom company that is upgrading its network. The stock jumped after activist shareholder Jana Partners took a stake and agitated for the company to be sold.
SharkNinja,
which makes consumer products like ice cream makers and air fryers, has risen as its sales have grown steadily and more investors have bought into the story.
Ferrari
rose after our January story as the company expanded into SUVs and other new models. Electric vehicles could put a charge into the shares soon, too.

Another winner was
Truist Financial,
which persevered amid a selloff in financial stocks. The company was created from the merger of BB&T and SunTrust banks, but had failed to successfully integrate the businesses. Its turnaround story has been fueled by cost cuts and a new commitment to operating efficiently. 

As for the losers, Pfizer and Hertz may have led the pack but they weren’t alone. Barron’s also missed the mark with companies like
Net Power,
an energy start-up that pledges to capture the carbon produced by burning natural gas and store it underground. The company delayed the expected launch of its first plant because of supply-chain problems.

Restaurant payments processor
Toast
also lagged behind its benchmarks despite improving financial results. It was weighed down by concerns about consumer spending heading into 2024, but Barron’s expects its strong performance to eventually be reflected in the shares.

Our negative stories had mixed results. Electric-vehicle maker
Vinfast Auto
tumbled after Barron’s questioned its valuation; the company had $4.4 million in stock market value for every vehicle the company sold. Eventually, the market came to its senses and the stock came back to earth. For
Coinbase Global,
another negative pick, the rise in Bitcoin prices in 2023 and progress toward a Bitcoin exchange-traded fund outweighed the company’s challenges.

Write to Avi Salzman at [email protected]