How the UK press’s share tipsters fared in 2020, and what they’ve picked for 2021
In a turbulent year for markets, the UK press’s share tipsters acquitted themselves well. Here's how they fared, and what they're tipping for 2021.
|Share tips for the year ending...|
|The Sunday Times||12.17%||-20.1%||30.8%||7%|
|The Daily Telegraph||21.53%||-13.4 %||9.6%||-1.3%|
In a turbulent year for markets the share tipsters acquitted themselves well, with all but two beating the FTSE 100 and FTSE 250. That said, given that the FTSE 100 slumped by 14.3% in 2020, beating the London market did not necessarily mean making any money.
Things were happier for those who braved the small-cap Aim index, which returned 14.4% in 2020. New entrant Interactive Investor’s Aim-focused portfolio reaped the rewards with an impressive 70.1% gain, placing it head and shoulders above the competition. Its best tip was battery specialist Ilika (see page 28). All its other tips also made money, save for industrial equipment supplier Northbridge Industrial Services, which fell by 27%.
Money Observer’s 12 tips came in second place, with games developer Team17 gaining 150% in a year when lockdowns turbocharged the video games industry. British gas owner Centrica proved its worst idea, slumping by 41%. Nevertheless the 21.7% overall return is a creditable showing for Money Observer’s last ever portfolio; sadly, the publication no longer exists.
The Daily Mail took the bronze even though most of its tips lost money. Marks & Spencer was its worst pick, falling by 37%. Barclays and RBS also ended 2020 nursing double-digit losses after another miserable year for banks. However, the portfolio was rescued by S4 Capital. Sir Martin Sorrell’s newish advertising venture rocketed by 155% in 2020, showing that occasionally one inspired choice can make (or break) a portfolio.
It was a disappointing year for US magazine Barron’s. While its 9.9% gain looks impressive to British eyes it was far short of the US benchmark S&P 500’s 18% total return. Barron’s attributes that to the emphasis it placed on value stocks; S&P 500 value shares returned -1% last year, while growth stocks set the pace with a 31% total return. Royal Dutch Shell, which fell by 34.4%, was its worst idea but the portfolio saved face with a 49.7% gain from Dell Technologies, its best performer. The Sunday Times leads the middle of the pack with a solid 7% return. Nasdaq-listed phone chipmaker Qualcomm was its top tip, soaring by 83% as the 5G rollout gathered pace. Brickmaker Forterra proved to be anything but “safe as houses”. It slumped by 30.3%.
The Sunday Times’ daily stablemate did a worse job, shedding 10.1% but still beating the FTSE 100. Safety and hazard detection business Halma was its top idea, gaining 15.7%, appropriately enough for a year where hazards were on everyone’s minds. Yet Jupiter Fund Management was “clobbered by falling markets” and finished down 31.1% to make it the paper’s worst pick.
As Shares notes, the trouble this year was that portfolios were produced with a “reality” in mind that the pandemic then “entirely overturned”. The magazine had some good picks – LED lighting specialist Luceco made a 117% return. Yet Lloyds Banking Group proved a stinker and Shares compounded the error by selling out in mid-September to crystallise a 63.4% loss. The stock has since rallied by 48%.
The Daily Telegraph held onto Lloyds until the bitter end, but with a 41.7% loss for 2020 as a whole it was still the paper’s worst tip. Happier times were found with video games specialist Sumo Digital, which rallied 85%. The closure of hotels dented profits at Johnson Service Group, the Investors Chronicle’s tip. The laundry firm slumped by 36%. But a bullish call on copper miner Antofagasta proved on the money. It gained 54% as prices of the industrial metal soared.
How are the mighty fallen
The Evening Standard topped the table on its first appearance in 2017 and repeated the feat in 2018. Yet a 19.8% loss is its worst performance to date and wins it the wooden spoon this time. Its 2020 portfolio opined that “the world will always need oil”, making BP a “solid punt”. But lockdowns and net-zero pledges have shaken that logic, with BP plummeting by 48.7% last year. Ted Baker proved a rotten tip, with an excruciating 71% loss making it the Standard’s worst. The paper’s tipsters were ahead of the game on the gold rally, however, with a 73% gain at miner Fresnillo their best idea. In past years The Guardian and The Independent have often fared poorly in recent years and they now seem to have finally given up, with no tips forthcoming for 2020 or 2021.
Annual share tip portfolios should not be taken too seriously. The comparison between portfolios is inexact as some publications liquidate their picks in mid-December. Long-term investors try to avoid buying and selling after just 12 months, but the following ideas do at least provide some food for thought.
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