MoneyWeek’s top ten tipsters of 2007

Over the past year, nearly 50 fund managers and investment experts have kindly given us their views on which investments they were backing. We look at the top-performing tips and tipsters of 2007.

Over the past year, nearly 50 fund managers and investment experts have kindly given us their views on which investments they were backing, and how MoneyWeek readers could profit from them.

Here we look at who has done best during the year to 12 December. Our contributors backed a wide range of stocks, but it's clear that the year belonged to commodities. Top tipster Mark McLornan made huge gains by backing agriculture, while mining and resources stocks were among other top tips.

Do note that this is not remotely scientific. Most of the tips are meant for the long term, so weren't chosen with the idea that performance would be measured less than a year later.

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Also, each view was written at a different point in the year some in January, others just weeks ago so the timeframe on which each is judged varies from case to case. And we don't include dividend payouts either.

But we have to draw the line somewhere so here, in terms of percentage gains, are our top ten tipsters of 2007.



In March, Mark McLornan told us grain was a "once-in-a-decade opportunity" and his tips' total return of 59.9% suggests he was right.

Monsanto, the genetically modified food group has soared 87%. He recommends taking profits, but keep a core position he believes it will become the Microsoft of agriculture. Syngenta (+35%), a global leader in crop protection, is a hold. The firm is lagging in GM and gene technology, but it will catch up.

However, it's time to sell agricultural equipment maker Deere & Co (+59%) due to its exposure to the construction market buy CNH Global NV (NYSE:CNH) instead. McLornan's tip for 2008 is Uralkali (URKA), a leading potash supplier, which should benefit from rising fertiliser prices.



Since May, James Thomson's shares have risen 41.8%. Foster Wheeler (+62.7%) is still a buy strong demand for commodity infrastructure means Thomson expects its contracts backlog to grow further. Marine engineer Sevan Marine (+52.7%) is also a buy, on new contract wins plus the installation of its second North Sea platform.

But sell shoe maker Geox (+12.6%), which won't overcome fears on consumer spending anytime soon. Also sell home entertainment group Dolby (+39.3%), which could prove vulnerable to poor Christmas demand.

For the New Year, Thomson likes Playtech (PTEC) arguably the top software provider for the online gambling industry. Huge opportunities are opening up in Asia, particularly for its version of the ever-popular Mahjong.


Williams de Broe

Bob Catto tipped four resources stocks back in February, which have since risen by an average 23.6%. Egdon Resources (+19.4%) still looks strong, with planning permission for its important Portland Gas Storage project expected in February 2008. Following a share split, his target is 450p by the end of the second quarter.

Kalahari Minerals (+34.6%) has had huge success exploring for uranium and copper but is a hold, rather than a buy, at the current price. Oil explorer Amerisur Resources (formerly Chaco Resources, 41.7%) is a buy at the current price, having begun production from its Platanillo field in South America. Medusa Mining (+82.3%) is also a buy, after the miner discovered very high-grade gold veins.

His tip for 2008 is gold producer Uruguay Minerals (TSX:UME), which has strong management and, unlike most of its Aim peers, owns six of its own rigs that are being used to drill well-defined targets.


HSBC Investments

Alec Letchfield's top tip back in January was consultancy WS Atkins (+42.5%), which did well despite exposure to bankrupt London Undergound consortium, Metronet.

Electronics group Laird Group (+36.8%) also had a good year, cutting production costs and selling its security systems unit. Both have issued strong trading updates; Laird in particular "still looks cheap".

But after a good start to the year, engineer Morgan Crucible (21.7%) was hurt by fears of a slowdown, pulling Letchfield's return down to +19.2%. For 2008, he tips support services group Carillion (CLLN). Most of its profits are "government-linked", giving support in a downturn, while it has "fantastic growth opportunities" in the Middle East.


Henderson Global Investors

In May, Mileen Rash tipped several miners. He would sell Rio Tinto (+79.4%) following a bid for the group from BHP Billiton, but hold Xstrata (+40.2%), which could be the next target in the sector. Platinum miner Lonmin (9.7%) hasn't done as well, but it's worth buying for its exposure to the increasingly valuable metal.

Rash would also hold on to oil explorer Dana Petroleum (+16.9%), while his worst performer, equipment-hire company Ashtead Group (48.4%), is a buy "even if one was to assume a US recession, the shares are cheap". Overall, his tips returned +15.7%.

For this year, Rash would tip aerospace services group Aero Inventory (AI). It has a large, ten-year contract with Australian airline Qantas, and has just signed another deal with Canadian group ACTS. Further contract wins "are likely". The share price is around £5.75 just now, but the "management incentive plan is based on the share price reaching £15 in three years' time".


Scottish Widows

In June, Vincent Devlin tipped three European stocks that have since returned an average of 13.1%. His best tip, Dutch digital mapping group Tele Atlas, rocketed 74.7% as a bid battle between satellite navigation groups Garmin and Tom Tom broke out over the company.

Swedish steel supplies group Lindab (+10.4%) also performed well, benefiting from strong demand for its products in eastern Europe in particular.

But Dutch plastics supplier Wavin (45.9%) suffered as it cut sales forecasts following the US housing slump and knock-on fears affecting its European markets.


Allchurches Trust

Chris Hiorns' tips have risen 12% in seven months. He has taken some profits in mobile-phone giant Nokia (+44%), but would keep a core holding.

A more modest 3% gain was seen for Carbone Lorraine. But the group, which makes industrial fuses and brushes for electrical motors, should benefit from growth in the alternative energy sector. He would also stick with electrical equipment maker Schneider Electric (10%).

For next year, he tips mobile telecoms equipment supplier Ericsson (NASDAQ:ERIC). Its shares have fallen after a recent profit warning, but it looks cheap on a forward p/e of 11.3 with a yield of 3.3%. It has a strong balance sheet and exposure to rapidly growing markets in Asia.



The shares Philip Ehrmann tipped in November have already risen an average of 10.49%. Oilfield services group China Oilfield has surged 26%, property developer CC Land has crept up 3%, while financial services group Min Xin (0.6%) is flat. Unsurprisingly, he would hold all three for now.

His tip for 2008 is Singapore-listed Midas Holdings (SGX:MIDA), which is heavily involved in servicing growing demand for railway rolling stock. The group is well placed to gain from China's infrastructure spending.



Since September, Tony Nutt's picks have risen a very respectable 10.5%. He'd keep buying top tip, interdealer broker ICAP (+39.0%), and also believes Anglo Irish Bank is still a buy after falling 18.4%, but he'd put corporate loans provider Intermediate Capital (+10.8%) on hold.

His tip for the year ahead is Cape (CIU). This industrial services provider has been turned around by "strong management". It has "exposure to the oil and gas sector and a significant level of contracts" and is "currently trading on an attractive valuation." The forward p/e is 10.6.


Saxo Bank

David Karsbol fortuitously tipped oil services group Sondex (+39.2%) in August, just before it was bought by General Electric. He still sees "great potential" in the oil services industry for next year because "oil extractors need more sophisticated machinery and resources generally".

Primary Health Properties (21.2%) "was not a great pick." But at a discount to net asset value of 35% and a dividend yield above 5%, he thinks the provider of new and refurbished GP surgeries now offers "convincing value".

For 2008, he tips the PowerShares DB Agriculture Fund (US:DBA), which tracks a Deutsche Bank agricultural sector index. He believes rising demand in China and India, and for biofuels, will see the softs boom continue. A growing appetite for meat in China in particular will be helped by the stronger Chinese currency allowing more people "to afford to buy it."

And the best of the rest

Philip Rodrigs, manager of the Investec UK Smaller Companies Fund, had some very strong performers in his portfolio, which he chose back in January. Billing services group Revenue Assurance Services (+64.2%) was bought by larger peer Spice in a cash and shares deal. Rodrigs recommends holding onto Spice shares the group's revenues come from utility companies, "which won't suffer in an economic downturn".

Another strong performer was funeral services group Dignity (+43.6%), because "the market has come to appreciate its defensive attractions properly". He would continue to hold the stock, which should "keep delivering over the long term."

Also in January, Ruth Keattch of the Trojan Capital Fund picked engineering group Foseco, which rose 37.8%, after receiving a bid from Cookson. She would hold onto the stock until the bid goes through in April 2008. Another of her tips, motor dealer Inchcape did not do so well, falling 23.8% over the same period, but Keattch still thinks it's good value.

"Inchcape has underperformed because the UK car market has been very difficult," but it makes less than a quarter of its sales in Britain, and also has an "interesting new business in China and Russia, which will thrive whatever happens to the West". Yielding 4.5%, and with a strong balance sheet, the stock is still a buy.