Contest entrants get chance to switch

A hot stock this year, held by participants in the contest, is First Solar, which makes panels in its Perrysburg plant.

Shares of Onyx Pharmaceuticals Inc. have had a good run, nearly doubling since the beginning of the year on optimism about a cancer drug in the firm's pipeline.

But it's time to cash in, said Rex Crist, a contestant in The Blade's Stock Market Game whose mythical portfolio includes the company.

"I'm going to get rid of Onyx," said Mr. Crist, of Adrian. "I don't believe there is much upside from here."

At the mid-way point of the newspaper's year-long contest, entrants face a choice: to hold or fold one of their picks.

Under the rules, the 900 contestants can replace one of their four stocks. There are caveats, however. The new stock must be in the same exchange as the one being replaced and trade for at least $5 a share. And forms must be postmarked by June 30.

"It's a two-edged sword for entrants," said Shane Ewbank, a financial adviser in the Toledo office of Smith Barney, contest co-sponsor and results tabulator.

"Do they want to sell their big winner, take the profits, and re-distribute them? Or do they sell the losers, even though they would have less proceeds to buy a new stock?"

It comes down to whether contestants believe their top performers will continue to rise or have peaked, Mr. Ewbank noted.

While many people considering a switch will look to stocks whose trading prices are in the red for the year, selling shares that are off 10 percent might not be the best strategy, he suggested. "They might want to consider taking some profit off the ones that have done well," the financial adviser said.

In that category are solar-energy component manufacturers like First Solar Inc., which is based in Phoenix but has operational headquarters in Perrysburg. Shares are up seven-fold to more than $75 since the start of the year. Its market value, at $5.5 billion, is higher than Owens-Illinois Inc., metro Toledo's second-largest company and the world's largest manufacturer of glass bottles.

The key question, said Mr. Ewbank, is whether First Solar and its solid-performing competitors will stall or continue to rise. He's leaving that decision to each contestant.

Contestants who choose to focus on losers rather than gainers won't have much to consider.

Of the contest portfolios, 737, or 82 percent, are in the black, Mr. Ewbank said.

Under contest rules, each entrant was required to divide an imaginary $40,000 evenly among four stocks trading for at least $5 a share. Entries were due Dec. 31.

If a replacement stock is selected, the same value of the stock to be replaced will used to buy the new shares.

The contest winner will be the portfolio with the biggest gain at the end of the year. The first place finisher receives $100 and an air trip for two to Chicago, Toronto, or Tampa. The trip is sponsored by Central Travel of Toledo. The second-place prize is $300 and third place is $100.

As of May 31, the contest leader was Paul Dymarkowski, a semi-retired purchasing manager from Sylvania Township. His portfolio was up 75 percent to $70,069. It included Onyx, United States Steel Corp., Marathon Oil Corp., and Andrew Corp., a communications equipment firm in Westchester, Ill.

Thomas Monaghan, a retired teacher, is in fourth place with a portfolio that has soared 65 percent to $66,073. It includes First Solar, Reliance Steel & Aluminum Co., Sunpower Corp., and Vulcan Materials Co.

With his worst performer up 33 percent, he plans no changes. "I'm going to keep them like they are," he said. "I think they're going to continue to do OK."

Contact Gary Pakulski at:

gpakulski@theblade.com

or 419-724-6082.