Round Up: Returning 63% in 2011; Too Soon in 2012

by JT McGee

NOOOOOOOO!

That’s how I felt yesterday when Sandridge Energy Inc. (SD) decided to rally 23% yesterday to close up over $8 per share.

This was going to be my hidden diamond in the rough stock for next year’s stock market competitions. The CEO is a boss – a true gangsta in the executive sense – who knows how to turn millions into billions. Yesterday, the company announced a $1 billion asset sale – a property Sandridge Energy paid roughly 1/14th the purchase price for less than two years ago.

They have so much valuable acreage just loaded with natural gas. Unfortunately, the company has more assets than cash – it simply cannot afford the capex necessary to bring gas to the surface.

Long Story Short

Long story short is that this company was going to be my lottery ticket for 2012 stock picking contests. I mean, it still might be, but it was definitely going to be my pick some 28% appreciation ago. My numbers give it a valuation of $16 in a buyout, which means it is still within my rules for buying stocks like the Pawn Stars. At $6 per share, it was most certainly a company that was good to go.

I’m still assembling my 4-stock A-team for next year’s stock picking competitions. With one week left to go in 2011, it appears that I didn’t do too badly this year:

This chart doesn’t include the last of the four – Continucare Corp (CNU) – which was bought out by MDF. MDF was the rockstar this year at 76%! Including the buyout, extra shares, and reinvestment of CNU shares into MDF stock (which I happily did myself because I have no respect for diversification) the total return is something like 63% this year. (Including the free MDF shares as part of the buyout, it’s more like 70%. Addition, subtraction, and multiplication are too hard right now. I’ll try later.)

By contrast, the index that cannot be beaten – the S&P500 index – is up .28% year to date.

Reads This Week

Photo By: wamzlee

{ 1 comment… read it below or add one }

PKamp3 December 24, 2011 at 18:23

Too late now, right? Haha. Are there more contests to enter than the Money Pros one? My stocks have already run a bit so I might be punished by being premature.

Thanks for the include – I know CPI is hated, so I will probably be using PCECPI in conjunction with it in most articles.

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