How the tipsters fared in 2012…

Even by the standards of an ever-fickle stockmarket, you would have needed either psychic powers or insider-dealing contacts to identify 2012’s sector winners (forestry and paper, with a 47% return). Wholesale money printing by central banks did nothing for industrial metals and miners, which lost over 30%. Supposed safe havens (big pharma; oil and gas; food and drug retailers) were battered, while risk was rewarded (banks were up 34% as a sector, while software stocks flew).

The Independent’s tipsters beat their Fleet Street peers, with returns of over 47%. They survived the energy sector carnage well, having recommended oil and gas explorer Providence Resources (up 94%). Even their worst tip – African Barrick Gold – only just edged into the red for the year. But most of their rivals did well in a rather lukewarm market. The resources sector provided the outliers: Investors Chronicle was let down badly by Powerhouse Energy (-93%), and The Guardian by Mariana Resources (-56%), a Latin American bullion miner. But all of last year’s tipsters ended up in the black overall.

…and what they’re tipping for 2013

So what do Fleet Street’s finest see in the tea leaves now? There are few coherent overall themes. Questor, for The Daily Telegraph, stays true to the resources story, with London Mining, Heritage Oil and San Leon Energy. While smaller resource stocks can always generate positive surprises, I’m a little wary this year, not least since Western economic growth is unlikely to produce many positive surprises of its own. The Sunday Times deserves an award for plucky contrarianism, singling out BG Group (-26% last year), RBS (still impossible to value sensibly, in my view), Man Group (-25%) and Chemring (-40%). If you believe in mean-reversion for the year ahead – or, for that matter, Father Christmas – look no further.

Not to be outdone, The Independent goes into overdrive in a festival of apologetic wishful thinking, if not outright denial: telecoms are suffering – but give Vodafone a chance; GlaxoSmithKline is treading water – but has an attractive yield; inter-dealer brokers are suffering – but ICAP is oversold; Betfair hasn’t lived up to the hype – but its new CEO can turn the business around; miner Anglo American had a bad year – so “could be due a recovery”; shares in power generator Aggreko are down – but it’s a quality company. If I ever receive truly dreadful news, I’d like to be told by The Independent’s share tippers. They should be hired by the banking lobby at once.

This lack of key themes points to an understandable lack of conviction – stock picking is always a probabilistic endeavour. But valuation at purchase is still the biggest driver of returns. Buy the shares of good or even mediocre businesses at a sufficient discount, and you should do well. But it is never worth paying over the odds on the hope of further gains. This is worth repeating when entire markets and asset classes are being distorted via monetary experimentation and financial repression by governments and central banks. Even as I gently lampoon The Independent’s glass-half-full cheeriness, I have to concede that their selection seems the one most focused on either oversold or unchallenging valuations and meaningful dividend yield, so they’re my favourites for the year ahead.

The best of luck in your own stockpicking.

• Tim Price is director of investment at PFP Wealth Management. He also writes The Price Report newsletter .

The Daily Telegraph- Questor

Performance last year: up 16%
Best tip: EnQuest +30%

Worst tip: Shanks -4%

Company Reason Price tipped
MP Evans (MPE)
Food processors
Palm oil prices have been falling, hurting MP Evans, which has palm-oil plantations among its assets. But prices will rise again. Buy on a 2013 p/e of 12. 485p 560p/427p*
London Mining (LOND)
Mining
The iron ore miner is expected to make its maiden profit in 2013, and prices are rallying due to continued demand in China. Cheap on a 2013 p/e of three. 145p 325p/112p
Heritage Oil (HOIL)
Resources
Heritage Oil should receive $100m after its Nigerian partner snapped up 30% of their joint venture. This year is expected to be transformational. 190.5p 219.5p/115p
Capita (CPI)
Support services
As austerity continues to bite, the UK’s biggest outsourcer should benefit. Earnings are recovering and upcoming bids are worth £3.1bn. Buy. 755p 788p/600p
San Leon Energy (SLE)
Resources
The shale-gas explorer is merging with Aurelian Oil & Gas – its cash will help fund exploration. Good drilling results could lead to a re-rating. A risky bet. 9p 13.5p/7p
Melrose Industries (MRO)
Engineering
Shares in the turnaround specialist were hit after the company issued a muted outlook statement in November. But Melrose’s track record is strong. 226p 261.5p/196p

 

Shares

Company Reason Price tipped
Apple (Nasdaq: AAPL)
Technology
The world’s biggest technology company is up for grabs at a bargain price. Brokers have cut earnings estimates over competition concerns, but iPhone and iPads are still “selling like hot cakes”. $519 $705/$419
BlueCrest AllBlue Fund (BABS)
Equity invest. instruments
This Guernsey-registered, closed-end investment vehicle offers access to hedge funds. It trades at a discount to net assets and volatility this year should benefit the fund. Buy. 166p 170p/159p
Dignity (DTY)
General retailers
Shares in the UK’s only listed funeral-care provider are worth tucking away. The firm boasts strong pricing power and predictable cash flows, while the competition remains fragmented. Buy. 1,029p 1,108p/750.5p
GKN (GKN)
Automobiles and parts
Investors worry about the sluggish European car market, but GKN boasts blue-chip customers and operates on a global basis. Business from Boeing and EADS should also increase this year. 226p 242p/171.5p
Polymetal International (POLY)
Resources
The Russia and Kazakhstan-focused mining giant throws off plenty of cash and promises to return any surplus to investors. The earnings outlook is “phenomenal”. Buy on a 2013 p/e of 11. 1,188p 1,231p/727p
Reed Elsevier (REL)
Media
Switch out of Pearson and into Reed Elsevier. While Reed has disappointed in the past, it should generate twice Pearson’s profits this year and yet is valued similarly to its rival by the market. 628p 662.5p/466p
Standard Chartered (STAN)
Banks
Now that Standard Chartered has settled with the US authorities over various sanction-breaking transfers, results should be strong in 2013. Dividends should grow this year. Buy on a 3.7% yield. 1,491p 1,664p/1,092p
Tullow Oil (TLW)
Resources
Tullow’s shares have underperformed due to poor drilling results near French Guiana. This presents an investment opportunity. This quality company has an exemplary strike rate. Buy. 1,212p 1,611p/1,098p
Asian Citrus (ACHL)
Aim
Time to pick up shares in China’s largest orange plantation operator on the cheap. The market for oranges should remain stable and Asian Citrus is well placed to push through price hikes. 28p 49p/26p
Avon Rubber (AVON)
Engineering
Reduced government spending has hit the defence sector. But Avon, which makes rubber masks for the military, has strong ties with the US military, and its dairy division provides diversification. 353p 400p/258p
Corac (CRA)
Aim
The £40m market cap gas compression and air purification specialist services the defence industry. While it is currently loss-making, its clients include BP, the MoD and BAE Systems. 13p 18p/7p
Fastnet Oil & Gas (FAST)
Aim
Fastnet only came to the market in May, but is backed by an experienced management team from Cove Energy. There is good potential in its portfolio off the coast of Morocco and near Ireland. 22p 33.5p/7p
Mwana Africa (MWA)
Resources
Risk-tolerant investors should consider the nickel and gold miner, which operates in Zimbabwe and the Democratic Republic of the Congo. Output could increase at its Freda Rebecca gold mine. 5p 6.5p/3.5p
Quindell Portfolio (QPP)
Aim
Quindell’s integrated approach to personal injury claims and crash repair drives down costs for insurance companies. Pre-tax profits should treble this year to £43.3m. Buy on a 2013 p/e of six. 14p 18p/5p
St Modwen Properties (SMP)
Real estate
The regeneration specialist has an impressive land bank and track record. It is currently working on 100 projects around the UK, and should unveil its third year of growth since the recession. 224p 242p/110.5p
Tangent Communications (TNG)
Aim
Now is the time to snap up shares in the digital print specialist as it starts a two-year international growth campaign, opening up markets in Germany and France, and an office in Mumbai. 7.5p 11p/4p

 

The Independent

Performance last year: +47.5%
Best tip: Providence Resources +93.8%
Worst tip: Africa Barrick Gold -4%

Company Reason Price tipped
Vodafone (VOD)
Mobile telecoms
Telecoms companies are having a tough time, but Vodafone is performing better than most. On a current p/e of ten, it also offers a 7% dividend yield. 154.5p 192p/154p
GlaxoSmithKline (GSK)
Pharmaceuticals
Glaxo is a classic defensive play, but the shares have been treading water lately. Trading on just 11 times 2013 earnings, they boast an attractive yield. 1,335p 1,515p/1,314p
ICAP (IAP)
Financial services
The interdealer broker experienced tough trading conditions in 2012, but costs have been slashed and the shares are oversold. The 2013 p/e is nine. 307p 431.5p/273p
Close Brothers (CBG)
Banks
Close Brothers survived the recession without a bail-out and the shares pay a solid dividend. On a p/e of just 10.7 for 2013, the shares look undervalued. 863p 893.5p/594p
Betfair (BET)
Travel and leisure
Betfair hasn’t always lived up to the hype, but with his PR know-how, new CEO Breon Corcoran, formerly of Paddy Power, is likely to turn it around. 686.5p 905p/660p
Anglo American (AAL)
Resources
Mining giant Anglo American was one of the worst FTSE performers in 2012, so could be due a recovery in 2013. A new CEO could be the catalyst. 1,894p 2,927p/1,662p
Aggreko (AGK)
Support services
Shares in the temporary-power-supply provider are down, but it remains a quality company generating most of its revenues outside the UK. Buy. 1,740p 2,415p/1,631p
St James’s Place (STJ)
Financial services
The Financial Services Authority’s shake-up of the way in which financial products are sold should benefit the wealth-management provider. 421.5p 443p/301p
Amerisur Resources (AMER)
Resources
Increased production at Amerisur’s Columbian oil field, expected this year, should provide these oil shares with a welcome boost. A riskier play. 47p 51p/16.5p
Thomas Cook (TCG)
Travel and leisure
Tour operator Thomas Cook had its wobbles last year and it still has too much debt. But CEO Harriet Green is capable of leading a recovery. 48p 51.5p/13p

 

Investors Chronicle

Performance last year: +13%
Best tip: Smiths News +103%
Worst tip: Powerhouse Energy -93%

Company Reason Price tipped
Compass (CPG)
Travel and leisure
A global need to save money means that the long-term trends look bright for the contract caterer, which enjoys strong cash flow. US growth is healthy. 740p 744p/578p
Boot Henry (BHY)
Construction & materials
The Sheffield-based firm has considerable value tucked away in its land bank, and its Hallam division looks likely to turn these assets into cash. 137p 145p/108p
Vodafone (VOD)
Mobile telecoms
With its impressive cash flow, Vodafone is one of the FTSE’s most appealing income shares. Plus it has a great track record of dividend growth. 158p 192p/155p
Imperial Tobacco (IMT)
Tobacco
Tobacco is bad for your health but good for your wealth. Imperial’s shares offer a 4.9% yield and last year share buybacks totalled £2.5bn. Buy. 2,396p 2,629p/2,213p
Energias de Portugal (Euronext: EDP)
Utilities
The Portuguese utility firm is in the eye of the eurozone storm, but 90% of its revenues come from regulated assets. The 9% yield is also attractive. €2.31 €2.44/€1.63
First Property (FPO)
Aim
This boutique fund manager runs property funds in the UK and Poland. It boasts the best track record in eastern Europe and a chunky dividend yield. 20p 21p/16p
Invensys (ISYS)
Software
The surprise £1.7bn Siemens deal for Invensys’ rail division has solved its legacy pensions issue. This means the company could now be a bid target. 335p 335p/166p
Kefi Minerals (KEFI)
Aim
Saudi Arabia-focused gold miner Kefi hasn’t found it easy to navigate the country’s red tape but things are improving and it has first mover advantage. 3p 5p/2p

 

The Guardian

Performance last year: +19.6%
Best tip: Pace +163.5%
Worst tip: Mariana Resources -56%

Company Reason Price tipped
Home Retail Group (HOME)
General retailers
Last year was tough for the owner of Homebase and Argos. This year should see it recover and gain from Comet’s demise. 127p 135p/68.5p
Diageo (DGE)
Beverages
If you’re looking for a play on the US recovery, Diageo is a good bet. It has strong exposure to the US market and a solid global reach. Buy. 1,787p 1,891p/1,377p
SSE (SSE)
Utilities
Hate the rise in energy prices? “If you can’t beat them, join them.” Profits are likely to continue to rise in 2013 and the chunky yield of 6% is also appealing. 1,418p 1,470p/1,200p
TalkTalk (TALK)
Telecoms
TalkTalk shares have already enjoyed a strong run recently. However, the rollout of its budget pay-TV service is likely to provide a further boost. 234p 241p/119p
Asos (ASC)
General retailers
Asos’s CEO said he expected a “stonking Christmas” for the online retailer, while an expansion into China and Russia should also provide an uplift. 2,691p 2,793p/1,325p

The Sunday Times

Performance last year: +20.2%
Best tip: C&W Worldwide +133.8%
Worst tip: Lamprell -65.2%

Company Reason Price tipped
BG Group (BG)
Resources
Shares in BG suffered last year after it admitted to problems in Brazil and Australia. However, if it can sort these out, the shares should recover in 2013. 1,008p 1,554p/991p
Standard Life (SL)
Life insurance
With bond prices sky-high, money managers are likely to move their cash back into shares – the life assurer/fund manager is likely to benefit. 334.5p 354p/198p
Royal Bank of Scotland (RBS)
Banks
RBS has gone from one crisis to another in recent years. But with signs of the UK economy stabilising, the only way for these shares should be up. 325p 340p/193p
Infrastrata (INFA)
Aim
This Aim-listed oil and gas firm is worth just £8m, but it has a promising gas storage project in Northern Ireland, partly funded by BP. Worth a punt. 9p 15.5p/4p
Marston’s (MARS)
Travel and leisure
The pub sector has been hard hit, but Marston’s has gone against the tide by opening 25 pubs in 2012 with a similar number planned for 2013. Tuck away. 120p 128p/90p
Dunelm (DNLM)
General retailers
Soft furnishings specialist Dunelm is benefiting from homeowners tarting up their homes during the recession; 70 new store openings are planned. 667.5p 702p/420p
Man Group (EMG)
Financial services
Last year was a poor one for the hedge fund manager, but new CEO Manny Roman is expected to sweep a new broom around the company in 2013. 82p 153p/61p
Chemring (CHG)
Defence
A profit warning at the missile decoy maker led bidder Carlyle to drop its buyout bid. However, a new CEO has joined and the bad news is in the price. 227.5p 463p/214p

 

The Times

Company Reason Price tipped
Interserve (IRV)
Support services
The support-services specialist boasts a solid management team and order book. The private finance initiative asset sale has freed up capital for expansion. Buy on a p/e of just eight. 389p 400p/268.5p
Fortune Oil (FTO)
Resources
A canny deal with a Hong Kong-listed company for its Chinese interests provides “oddity” Fortune Oil with £100m in cash, a holding in the company and other Chinese assets. Worth a look. 10.5p 13.5p/7.5p
Thomas Cook (TCG)
Travel and leisure
Travel operator Thomas Cook has been through a “near death experience” and is emerging from the other side. If it survives, the only way for the shares is up. “A straight punt.” 48p 51.5p/13p
GKN (GKN)
Engineering
GKN is one of the UK’s strongest engineering companies. Any recovery in the European car market should boost the shares, which look good value on nine times forward earnings. 229p 242p/171.5p
Glencore (GLEN)
Resources
Last year The Times picked Glencore as a buy, but the shares performed poorly because of the complex deal with Xstrata. With the merger set to complete in the spring, they should recover. 351p 484p/289p
BP (BP)
Resources
The unwinding of BP’s Russian joint venture, coupled with its progressive dividend policy, should help boost the shares this year. The third-quarter payout will be a 12.5% increase. 425p 512p/389.5p
Lamprell (LAM)
Resources
A fistful of profit warnings hit shares in the oil-services company last year. But, as with Thomas Cook, a recovery should be due this year. If not, then it could be a bid target. Either way, buy. 94p 369p/62p
BTG (BTG)
Health
In 2012, BTG’s sepsis drug flunked its clinical trials, which hit the shares. However, the firm has many other promising new compounds, along with its virtual monopoly in snakebite anti-venom. 332p 426p/297p
Pearson (PSON)
Media
With its strong global education franchise, the owner of Penguin books is a “solid pick”. The media giant recently moved into e-readers and the shares offer a 4% dividend yield. 1,188p 1,302p/1,105p
Hutchison China MediTech (HCM)
Health
Hutchison develops Chinese botanical products into Western drugs. It recently signed a promising deal with Nestlé for its product for ulcerative colitis and Crohn’s disease, a market worth $6bn. 415p 470p/345p

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