How the tipsters fared in 2016
It’s been the usual mixed bag for the financial media’s annual share-tip portfolios. Ben Judge looks at how they got on last year.
It's been the usual mixed bag for the financial media's annual share-tip portfolios. In a year when the FTSE 100 returned more than 14%, only two of 2016's portfolios managed to beat it. The Sunday Times did best, its selections producing an average return of just over 26%. Of its eight tips, just one, Travis Perkins, ended the year lower than it started. The best, Imagination Technologies, rose by more than 88%.
Shares magazine was the other success story, just pipping the FTSE with a return of 15.9%. Its top performer was African beef producer Zambeef, which returned 173%. Serco and BP were other good calls, rising 52.5% and 48.7% respectively. But cloud software company Eagle Eye Solutions fell by more than 40% in the year.
Three publications managed to lose money for anyone who followed their advice. The Daily Telegraph's Questor, usually fairly reliable, lost 2.2%. And the Daily Mail lost 9.4%. None of its three tips ended the year up. The wooden spoon, however, goes to The Guardian, which lost its readers more than 13% by picking shares such as Restaurant Group, which fell over 50%, and Dixons Carphone, which slid 29%.
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Take a longer-term view the last three years and Shares magazine triumphs: its annual portfolios have returned a cumulative 37%. The Daily Telegraph's gained 25%. The Daily Mail managed to shed 33%, and The Guardian 16%. The Independent and The Sunday Times, with three-year performances of 9% and -7% respectively, also have plenty of room for improvement.
Row 0 - Cell 0 | Share tips' performance for the year ending | ||||
31/12/12 | 31/12/13 | 31/12/14 | 31/12/15 | 31/12/16 | |
Daily Telegraph | 16% | -6.30% | 12.20% | 14% | -2.21% |
Shares | N/A | N/A | 5.90% | 11.80% | 15.94% |
The Independent | 47.50% | 55% | 4.30% | -6.77% | 12.53% |
The Guardian | 19.60% | 11.80% | 2.30% | -5.10% | -13.49% |
The Sunday Times | 20.20% | 17.20% | -13.50% | -15% | 26.06% |
The Times | N/A | 55.50% | 10% | -8.60% | 0.84% |
Daily Mail | N/A | -6.90% | -18.10% | -10.20% | -9.44% |
FTSE 100 | 5.84% | 14.43% | -2.71% | -4.93% | 14.43% |
FTSE 250 | 22.49% | 28.77% | 0.94% | 8.36% | 3.71% |
What they're tipping for the year ahead
Shares
Last year saw increases in most commodity prices, and mining service group Capital Drilling should profit as miners now shift more resources into exploration (50p). Energy, healthcare and technology products distributor DCC is a "brilliant company" with a strong balance sheet that will help it to fund new acquisitions (5,850p). Sausage-skins maker Devro is geared into higher protein consumption trends globally and offers "longer-term growth prospects" (165.5p).
Hotel Chocolat's 0.5% dividend yield might not look too tempting, but the chocolatier is well placed to tap into new consumer trends (281.5p). Ideagen's software helps UK companies to understand the risks and obligations of red tape for their business and could get a boost from Brexit (64.25p).
North Sea oil producer Ithaca Energy's flagship Stella field comes onstream in January and a share-price bounce could follow (86p). The UK advertising slowdown is priced in at ITV and the market is underestimating this well-run business (194.6p). The turnaround at insurer RSA is gathering steam under chief executive Stephen Hester (565p). Outsourcer Serco was Shares's best performer last year and represents a good defensive choice for 2017 (141p).
Tracsis received its first major order for its rail track monitoring software and hardware kit in August 2016 and a breakthrough in the US could be on the cards for 2017 (520p).
Daily Mail
Aurum Mining's shift from mining into cybersecurity is not a sure thing, but the management team is worth a punt (5p). Investors optimistic about the UK economy should bet on Costa Coffee and Premier Inns owner Whitbread (3,776p). BAE Systems should benefit from ongoing global instability, whilst its cybersecurity division could be an "ace in the hole" (591.5p). The video games market is huge and Gfinity offers exposure to important trends in the sector (13.5p). Micro Focus became a rare UK tech giant on the back of buying Hewlett Packard Enterprise and more acquisitions could follow (2,179p).
Lloyds Bank has been oversold since Brexit, but is putting past scandals behind it and offers a solid dividend (62.5p). Takeaway app Just Eat is starting to "gobble up smaller firms" and expand operations into new territories (583.5p). Lithium is one of the "hottest commodities on the planet" because of its use in electric cars and Bacanora Minerals offers a high-risk, high-reward lithium play (67.5p). Packaging supplier DS Smith has so far proved resilient in the face of greater macroeconomic uncertainty (408p).
The Sunday Times
Cambridge-based Horizon Discovery Group creates genetic material used in the growing area of gene therapy sales are soaring and analysts scent upside of 50% (144p). Cybersecurity consultancy NCC is growing rapidly via acquisitions and business will increase as new European rules force companies to keep customer data more secure (180.75p).
Shares in telecoms giant Vodafone are near a three-year low, but money will flow back into defensive stocks like this if Donald Trump's stimulus disappoints(199.75p). Restaurant Group had a dismal 2016, but a new chairwoman is clearing out old managers and even if she doesn't turn things around a private-equity bid is a "reasonable prospect" (324p). Construction and civil engineering provider Costain should benefit from the coming UK infrastructure boom as projects like HS2, Hinkley Point and the Thames Tideway Tunnel get under way (353.75p).
Biotech firm PureTech could have a good year if either its Alzheimer's or obesity treatments show signs of progress (117.75p). Unilever's stable of brands gives it pricing power that could prove all-important if inflation spikes supermarkets are already quietly raising Marmite prices (3,292p). Expect strong earnings growth at insurer Aviva as it cuts back on staff and refocuses its business offering (486.5p). Oil-services provider Petrofac is retrenching after profit warnings last year, and the shares will now be boosted by the higher oil price (869p).
The Daily Telegraph
The grocery sector is likely to have a tough year ahead, but Wm Morrison had a "stellar 2016" and the turnaround under chief executive David Potts is set to continue (229p). Expect tourist attraction operator Merlin to bounce back in 2017 as the weak pound encourages foreign tourists into the UK and Britons to holiday at home (447.75p).
Bargain hunters should take a look at BT the shares have been bruised by regulatory battles with Ofcom but continuing growth in the online economy means brighter prospects to come (364p). Outsourcer and distributor Bunzl may be a bit boring, but it has been growing consistently for 23 years and offers steady returns (2,109p). Rising interest rates will mean more insolvencies and restructuring specialist Begbies Traynor stands to benefit (48.25p).
It may seem risky to bet on a bank given the economic outlook, but Barclays's US business offers exposure to the Trump boom (223.5p). Those less sanguine about the new US president's impact on global stability will expect a rally in the gold price, and gold miner Hummingbird Resources is a promising bet (17.5p).
Several key drug studies will make or break AstraZeneca in 2017, but early trials are encouraging and the shares yield more than 5% (4,400p). Upmarket tonic water maker Fever-Tree has consistently exceeded expectations and exports to 50 countries (1,098p). Standard Chartered does most of its business in Asia and is thus insulated from problems affecting the UK economy just beware a Trump-induced trade war with China (653.75p).
The Times
Premier Oil has been neglected because of its debt pile, but with a restructuring on the cards and rising oil prices it now looks attractive (74p). Shares in broker NEX Group should rise as the market comes to appreciate the effect disposing of the low-margin voice-broking business has had on the firm's prospects (462p). Litigation finance group Burford Capital has just bought the second-biggest operator in a market that "can only continue to grow" (572.5p). Potash miner Sirius Minerals is worth a speculative punt (19.25p).
Capita performed abysmally in 2016, but now looks oversold and yields more than 6%. The CEO is takes steps to shore up the dividend (531p). A reassuring November update marked out defence and aerospace contractor Meggitt as another potential recovery stock; the cheap pound may also tempt in overseas buyers (458.5p). Travel operator Thomas Cook looks oversold on less than nine times this year's earnings (87.25p). Packaging supplier RPC Group is a good choice for "investors who like to sleep easy in their beds" (1,065p).
The Independent
Infrastructure spending is supposed to be all the rage on both sides of the Atlantic, meaning that contractor Balfour Beatty should profit (269p). House builders are due an improvement and Persimmon boasts a "solid land bank" and a lowly forward-earnings multiple of just nine (1,776p).
Paddy Power Betfair has underperformed the FTSE 100 since the merger of the two online gambling groups, but the full benefits of the tie-up have yet to emerge (8,775p). Kier Group is "well placed to benefit from the expected increase in UK infrastructure spending over the next few years" (1,373p). Auto Trader has used its strong online presence to corner the market in digital car sales (409p).
The Guardian
Those expecting a "dead cat bounce" might want to take a punt on Flybe, which "might stay in business" under its new management (44p). Drinks company Diageo is "on an upward trajectory" (£21.10). Tesco "is in recovery mode", with sales and market share up (207p).
Gold miner Randgold Resources has been "on a downward run" since last summer, but investment banks have recently upgraded its prospects and ithas a "stable and experienced" management team. It's looking "pretty cheap" at (6,415p). Fashion retailer Ted Baker took "a thrashing" after the EU referendum, but it has a "natural hedge" in its growing overseas business, which should help it grow in a tough climate (2,814p).
Associated British Foods is down from its 2016 high, but continued expansion at Primark and a recovery in the sugar price mean its shares "could have further to rise" (2,745p). Selling its "barely profitable" milk business means Dairy Crest can concentrate on more lucrative specialist brands and expanding overseas. It should also benefit from inflation and a lower pound (619.5p)
Medical supplies firm ConvaTec Group is currently a favourite of City analysts, receiving "unconditional support". But "let's not hold that against the company" (234p). Greetings-card company Card Factory "has some admirable qualities", despite a 30% fall in the share price last year. It is a "cash-generative retailer which pays generous dividends" (253p). Pharmaceutical firm Shire enjoyed "a strong launch" of its new eye drop treatment for dry eyes and has "a good pipeline of new products" (4,684p).
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Ben studied modern languages at London University's Queen Mary College. After dabbling unhappily in local government finance for a while, he went to work for The Scotsman newspaper in Edinburgh. The launch of the paper's website, scotsman.com, in the early years of the dotcom craze, saw Ben move online to manage the Business and Motors channels before becoming deputy editor with responsibility for all aspects of online production for The Scotsman, Scotland on Sunday and the Edinburgh Evening News websites, along with the papers' Edinburgh Festivals website.
Ben joined MoneyWeek as website editor in 2008, just as the Great Financial Crisis was brewing. He has written extensively for the website and magazine, with a particular emphasis on alternative finance and fintech, including blockchain and bitcoin.
As an early adopter of bitcoin, Ben bought when the price was under $200, but went on to spend it all on foolish fripperies.
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