2024 Share picks: What the financial experts are betting on

The art of share tipping has finally paid off: 2023 may have been a bad year for economic forecasters (who predicted a recession that never came) and a dull one for the London market, but it was a good year for the newspaper share tipsters. Most annual share portfolios comfortably beat the FTSE 100 and FTSE 250 in 2023, reversing a two-year run in which investors would have done better by ignoring most of the tipsters and putting their cash in an index tracker instead.

So, what are they tipping for the year ahead?

The Daily Mail's tips

Agronomics, Empire Metals, GLS, Land Securities

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1. Agronomics invests in firms in cellular agriculture, an early-stage technology that could one day enable us to eat cruelty-free meat, fish, and dairy products that also require less energy to produce than traditional agricultural products. A long regulatory road lies ahead, but given the scale of the opportunity, the shares are “worth a punt” (9.5p).

2. Aim-listed Empire Metals may have found one of the world’s “biggest titanium deposits” in Western Australia. The metal is a critical military metal, while bright white titanium dioxide is used in paint and sunscreen (9.3p).

3. Shares in Royal Mail’s owner International Distribution Services have halved over the past two years. GLS, the multinational logistics arm, has brighter prospects, and its value is being overlooked because of the travails of the UK postal division (272p).

4. The dual rise of work-from-home and e-commerce has hit the valuation of commercial property firm Land Securities, but management has pivoted towards more promising areas such as property in London’s West End. A prospective yield of over 5.5% is also appealing (705p).

Barron's tips

Alibaba Group, Alphabet, Barrick Gold, BioNTech, Chevron, PepsiCo, U-Haul,

1. A crackdown on big business in China has reduced Alibaba Group Holding to “one of the cheapest [technology-orientated] companies in the world”. The New York-listed shares trade on a mere eight times forecast profits and the market value is just 15% of that of Amazon, the most comparable Western business. There are risks, but these are abundantly priced in, leaving room for a relief rally ($72).

2. Google’s owner Alphabet looks the pick of the “Magnificent Seven” stocks that dominated the 2023 market. It trades on a marked discount to some of its big tech rivals despite robust growth prospects. While the emergence of artificial intelligence (AI) does raise questions about the future of Google’s dominant search business, Google is using its vast cash pile to work on its own AI offerings ($132).

3. Shares in precious metals miner Barrick Gold have lagged progress in the gold price over the past year amid operational disappointments, but this year could be brighter. Barrick has “some of the world’s best mines” and its management is highly regarded and adept at handling “delicate relations” with governments ($18).

4. Shares in German pharma company BioNTech have plunged by 25% in a year as the tide goes out on pandemic-era healthcare shares. But the Covid vaccine hero should still remain profitable in 2024, giving time for the “oncology-focused pipeline” of new treatments to bear fruit. With $18bn of cash on the balance sheet, 75% of the market value, investors enjoy a significant “margin of safety” at the current price ($104).

5. Shares in Chevron slumped 14% last year, underperforming other global oil supermajors because of production disappointments and questionable deal-making. But on 10.7 times 2024 earnings and yielding 4.2% the valuation is now “compelling” for “one of the best-run big energy companies in the world” ($150).

6. Shares in PepsiCo struggled last year as new weight-loss pills caused investors to sour on sugary beverages and snacks such as Doritos. Yet strong recent trading performance suggests the market may have got carried away. The shares are trading on a discount to the five-year average and “it rarely pays to bet against the American eater” ($168).

7. U-Haul Holding is the default “do-it-yourself moving business” for Americans moving house. On 14 times earnings, the shares are reasonably priced for a business with a robust competitive position thanks to the “network effects” of its 23,000 locations across North America ($63).

The Sunday Times' tips

BAE Systems, Begbies Traynor, Carnival, Pets at Home, Sage, Vertu, YouGov

1. Shares in defence business BAE Systems have nearly doubled amid the global turmoil of the past two years and the world isn’t getting any safer. The acquisition of US space-focused Ball Aerospace should add NASA to the firm’s roster of clients in addition to defence ministries (1,113p).

2. About 60% of business at professional services firm Begbies Traynor still comes from insolvencies, which are on the rise as high interest rates bite. In a more optimistic scenario, the diversified “advisory and transaction” side of the business will get a boost if the economy manages to beat low expectations (117p).

3. Price hikes at cruise ship operator Carnival have done nothing to dampen the post-pandemic travel fever, as the shares doubled last year. Strong forward bookings could herald another record-breaking sales figure for the year ahead. Expect this ship to “sail on” ($19).

4. A regulatory review into competition in the veterinary sector is prompting investors to steer clear of Pets at Home, but the gloom may prove overdone. The retailer is “one of the few businesses” still enjoying a boost from the pandemic, which sparked a significant rise in pet ownership (320p).

5. Payroll and accounting software firm Sage offers a rare means to gain exposure to AI through the London market. The shares rallied by 60% last year, but the scope to build AI into its tools should continue to “put boosters” under the shares (1,172p).

6. Dearer car finance triggered “a horrible profit warning” at car dealer Vertu Motors in December, but easier monetary policy should help foster a recovery later this year. With peers attracting bids, there is also a chance that this is the year when Vertu “finally gets taken over” (72p).

7. A packed global elections calendar will be good marketing for polling firm YouGov, especially in the key US market. The bulk of YouGov’s revenue actually comes from providing consumers’ data to big clients in technology, where demand is gradually “returning” after a soft year in 2023 (1,187p).

Shares magazine's tips

Adobe, B&M, Just Group, MongoDB, PureTech Health, RelX

1. Shares in creative software firm Adobe have fallen following “lukewarm” earnings guidance, but markets are missing the bigger picture. While hardly cheap, the shares are undervalued relative to Adobe’s own history and look good value given its superb growth record and “powerful” balance sheet ($585).

2. B&M: The cost-of-living crisis is causing households to go bargain-hunting. That is a boon for B&M European Value Retail, which still has plenty of scope to grow its market share in both the UK and France (562p).

The insurance market is going through a “once-in-a-generation” phase of rising rates. Conduit Holdings, the parent of a Bermuda-based reinsurer, looks well-placed to profit from the shift and has fewer problems with troublesome “legacy” policies than some of its older rivals (455p).

3. Retirement specialist Just Group is benefiting from strong market demand for bulk annuities as pension schemes look to manage risks. The current low single-digit price/earnings (p/e) ratio appears “screamingly cheap” and is unlikely to last (85p).

4. Data platform MongoDB helps software developers to manage and analyse enormous data sets. Data is the “rocket fuel” powering AI, so the shares should continue their strong 2023 run into 2024 provided investors’ excitement about the technology continues ($420).

5. US biotech PureTech Health has an “exciting drug portfolio”, but the market is overlooking its true value. Patience will be required for new treatments to come good, but the “huge amount of cash” on the balance sheet mitigates some of the risk (151p).

6. Information specialist Relx is an underappreciated London-listed AI play. Its experience working with large datasets and scientific journals gives it a head start at applying data analytics and AI to its business (3,059p).

The Times' tips

Amazon, Diageo, Empiric Student Property, Marks & Spencer, Paragon Banking

1. US economic “bellwether” Amazon overextended itself during the pandemic, prompting it to spend much of 2023 ruthlessly slashing costs. That has restored profitability, while sales have so far held up better than expected as the US consumer remains strong. Meanwhile, the web services arm offers exposure to artificial intelligence. The shares’ forecast price-to-earnings (p/e) is close to a 13-year low ($152).

2. Consumer weakness in Latin America saw shares in drinks seller Diageo tumble late last year, but despite the wobble, the structural trend towards drinkers buying the group’s more “premium” brands should see investors’ confidence return. On 18 times forward earnings, the shares are near their cheapest valuation in ten years (2,843p).

3. Shares in Empiric Student Property have been treading water for two years thanks to rising interest rates. Yet there is a structural undersupply of the sort of student accommodation in which this landlord specialises. Lower interest rates could prompt a rerating, while a takeover bid is always possible given the cheap valuation (94p).

4. Marks & Spencer’s clothing and home business has long underperformed, but a decision to cut back the number of product ranges has borne fruit, helping to propel like-for-like sales growth at the division up to its highest level in over ten years. The shares more than doubled last year, but “remain inexpensive”. Any positive Christmas trading data could prove a renewed catalyst for the shares (273p).

5. Buy-to-let mortgage specialist Paragon Banking has been strikingly resilient through the UK property downturn. Annual return on equity, a key gauge of profitability, has hit an impressive 20%, allowing management to fund generous dividends and buybacks (691p).

The Motley Fool's tips

Compass, Centamin, Kainos, Smith & Nephew

1. Precious metals appear poised to come back into fashion this year because of rising global turmoil. Egypt-focused gold miner Centamin offers one way to play the trend (100p).

2. Much of the world economy is flirting with recession, making the defensive qualities of food-services outsourcer Compass appealing. There is plenty of scope to win more business as about half of the addressable food-service market has yet to be outsourced (2,146p).

3. Digital services business Kainos helps businesses to make their operations more efficient, a top priority as higher interest rates squeeze balance sheets (1,119p).

4. Shares in medical products maker Smith & Nephew have been trading close to their lowest level in ten years because investors have become concerned that new weight-loss drugs could sap demand for its products. Yet the concerns have been overdone – weight loss can actually enable some patients to get joint-replacement surgery for which they were previously ineligible. Furthermore, recent trading has been strong and a continued recovery could fuel a “big rebound” in the share price during the year ahead (1,079p).

The Telegraph's tips

BT, Deliveroo, Foxtons, Hollywood Bowl, Ipsos, Next, Persimmon, Seeing Machines, Tracsis

1. Could 2024 be the year when chronic stockmarket underperformer BT finally comes good? A declining pension deficit and rising consumer prices give it financial headroom. Trouble at some of BT’s “alt-net broadband rivals” raises the prospect of a more consolidated market that would leave the one-time monopoly in the telecoms driving seat once again (124p).

2. Deliveroo has put the messy aftermath of its 2021 listing – deemed the worst “in London’s history” – behind it. The shares have climbed by 40% over the past year, and profitability is finally coming into view. A takeover bid for the food-delivery business could yet come on to “the menu” (128p).

3. While London’s property market struggles, the rental market is “on fire”. That bodes well for Foxtons, the capital’s largest letting agent (47p).

4. Generation Z is increasingly abstaining from alcohol in favour of “retro” hobbies such as bowling, which is good news for Hollywood Bowl. Private equity recently bought rival Ten Entertainment, so management will want to “up its game” this year (305p).

5. This year will be a record election year. It will be more important than ever for businesses to keep abreast of the changing tides of public opinion, so give Paris-listed polling firm Ipsos your vote of confidence (€56).

6. Next has been a rare good-news story on the struggling high street. Management has raised guidance four times in the last five months, and the rally could yet have further to run (8,132p).

7. Last year was tough for housebuilders, and Persimmon has lagged behind its rivals. Yet falling interest rates and Keir Starmer’s promise to foster a housebuilding boom could deliver a recovery during the year ahead (1,385p).

8. Australian technology firm Seeing Machines deploys software and cameras to ensure that drivers are keeping their eyes on the road. Vehicles are becoming increasingly automated, and regulatory trends are a tailwind, but the Aim-listed shares have been neglected of late (5p).

9. Transport-data analytics business Tracsis is well-managed and operates in a profitable niche. The shares have soared by more than 2,000% since listing 16 years ago. What more do you want from an Aim stock? (940p).

Interactive Investor's tips

Gateley, Michelmersh Brick, Restore, Trident Royalties

1. In an uncertain year, legal services specialist Gateley’s diversified mix of “countercyclical” work across business recovery, property, and corporate services is reassuring. A forecast yield of almost 6% is also appealing (154p).

2. While construction struggles, Michelmersh Brick’s focus on “niche” brick requirements, such as “clay pavers [and] terracotta”, offers resilience. A housebuilding recovery will eventually come, and in the meantime, investors can enjoy the near-5% forecast dividend yield (89p).

3. Shares in business support services group Restore sagged last year due to soggy trading, prompting a management shake-up. The core records-management business remains solid, and there is a prospective upside should a recovery take hold (210p).

4. Global mining royalties play Trident Royalties offers exposure to the boom in metals such as lithium and copper that are needed for electrification, while the recent rally in gold prices is providing a near-term boost (36p).

How the tipsters performed in 2023

1. The Daily Mail’s Midas portfolio tops the table for 2023.
The Daily Mail’s tipsters often take the high-risk, high-reward approach of backing little-known mid-caps and small-caps, typically in the UK. Risk is further increased via concentration: last year’s portfolio only had three tips. While that approach can lead to disaster – witness heavy losses in 2022 – it can also ensure that gains from a few excellent shares are not watered down by more mediocre performers.
The Daily Mail’s returns were highly dispersed, including a nasty 15.3% loss on marine engineering specialist Harland & Wolff, the firm that once built the Titanic. Yet that didn’t sink the wider portfolio thanks in large part to a superb 135% rally in drug-testing specialist hVIVO.

2. The silver medal goes to the US publication Barron’s.
The magazine’s portfolio has performed well in recent years thanks to the long-running out-performance of its home market. That said, Barron’s team still demonstrated stock-picking savvy, with a 31% total return comfortably beating the benchmark S&P 500’s 24.5% in 2023 until the portfolio was liquidated in mid-December. Returns were boosted by “Magnificent Seven” members Amazon (up 67.8%) and Google-owner Alphabet (up 46.6%), but the weekly’s best tip was actually luxury housebuilder Toll Brothers, which more than doubled. Aluminium play Alcoa (down 29%) was its worst choice.

3. The Evening Standard takes bronze with a series of solid picks.
Only one, pawnbroker H&T, ended the year in the red as 2023 proved to be less miserable than some had feared. The Evening Standard’s other seven picks all rose. UK cybersecurity specialist Darktrace was the paper’s best call, gaining 41.5%. The London Stock Exchange also enjoyed a strong year, delivering a 30% gain.

4. The Sunday Times takes fourth place, regaining some pride after finishing second-last in 2022.
Two of the newspaper’s picks surged by 80%: private equity firm 3i and City broker Numis, which was taken over by Deutsche Bank. However, bad calls on luxury-fashion play Burberry (down 30%) and electronics specialist XP Power (down 34%) denied the portfolio a better overall performance.

5. Shares magazine’s portfolio secures a creditable mid-table finish with a 20.6% gain. Rather than relying on a few excellent picks “bailing out the others”, eight of its ten choices managed double-digit gains. Shares takes profits during the year on some of its portfolio, but the best share it let run to the end of the year was Dutch semiconductor specialist ASML, which gained 28.7%. The only loss came from insurer Prudential, down by 13.5%.

6. The Times’ Tempus column comes sixth, with a 17% gain that beat the London market. Its best pick was Premier Inn-owner Whitbread, which gained 44.8% in a year where demand for travel remained robust despite cost-of-living pressures. But slow trading at pest control group Rentokil Initial (down 15.4%) denied the portfolio a better overall placing.

7. The Motley Fool offered up 12 different UK tips for 2023, but few of them shone in a poor year for UK shares, leaving the portfolio more or less flat. Housebuilder Barratt Developments, up 42%, was its best call. Unfortunately, six of the tips ended the year down, with S4 Capital, Martin Sorrell’s digital advertising company, proving an absolute stinker with a 71.8% loss.

8. The Investors’ Chronicle drops from fourth last year to second-last in 2023.
The magazine chooses 50 tips each year, with five highlighted specially. Of this latter group, the worst choice was lithium play Albemarle, which lost 33% in a year when the electric vehicle battery sold off heavily. The best choice, with a 16% gain, was the AVI Global investment trust.

9. Finally, Interactive Investor’s Aim portfolio takes the wooden spoon for the second year in a row, even as it improved on the steep losses it made in 2022.
The loss is understandable as the portfolio’s benchmark, the Aim All-share index, ended the year down 8%. Management process automation software play, ActiveOps, cashed in on the artificial intelligence boom to deliver a 22.5% gain. But three of the other four picks ended the year in the red, with the worst performance from professional services network DSW Capital, which dropped 57.5% amid sluggish deal-making activity on global markets.

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