| Share tips’ performance for the year ending | ||
| 31/12/16 | 31/12/17 | |
| Shares | 15.94% | 12.41% |
| Investors Chronicle | 7.79% | -3.21% |
| Barron’s | 2.53% | 26.16% |
| Money Observer | 4.26% | 18.16% |
| FTSE 100 | 14.43% | 7.10% |
| FTSE 250 | 3.71% | 14.01% |
Much like the newspapers, whose record we looked at last week, 2017 was a mixed bag for magazine share tipsters. US weekly Barron’s was the standout performer. In a year when the FTSE 250 returned 14% and the FTSE 100 managed a shade over 7%, Barron’s rewarded its readers with just over 26% by picking mostly US stocks. Its top pick was luxury specialist housebuilder Toll Brothers, while just one of its selections actually lost money – pharmaceutical giant Merck shed 7% in the course of the year.
UK monthly Money Observer was in second place. Its most successful choice was supplier of power control components XP Power, which had an excellent year. Its share price jumped by over 98% in 12 months, while science and technology consulting company Science Group returned 41.7%. Its biggest dud was Greene King, which lost over 16% after a difficult year where profits declined and the brewer and pub company warned of weak consumer confidence.
Shares magazine beat the FTSE 100, but failed to beat the UK mid-cap index with a rise of just 12.4%. Its best performer was business software provider Ideagen. Strong trading and rising profits led the share price up by over 57%. Sausage skin maker Devro returned 38%. Shares was undone by a poor performance from outsourcer Serco, which fell by almost 30%, while rig operator Capital Drilling lost 25%.
Bringing up the rear was Investors Chronicle, which lost over 3%. It did produce a couple of successes – consultancy RPS Group returned over 28%, for example, and Aviva made almost 6%. But they were more than offset by its losers. Worst was satellite operator Inmarsat, which lost over 33% after what the company described as “challenging” market conditions.
… and what they’re tipping for the year ahead
Barron’s
Car financing group Ally Financial is cheap – and looks like a potential takeover target ($28). The threat posed by Amazon to Google owner Alphabet’s search advertising business has been overplayed ($1,030). Health insurer Anthem should see strong earnings growth in the next few years ($224). The growth of artificial intelligence is boosting demand for Applied Materials’ semiconductor equipment ($52). Berkshire Hathaway’s “Fort Knox-like balance sheet” makes it one of the most defensive blue-chips (Class A Shares: $294,000). Delta Air Lines is the best-run major US airline and is doing a good job of countering the low-cost threat ($68). Oil and gas producer Pioneer Natural Resources should enjoy higher crude oil prices ($154). Some think that US Foods – America’s second-largest food distributor – is ripe for disruption, but thin margins and its existing client relationships should keep it safe ($30). The market is forgiving Volkswagen for “dieselgate”; expect more upside (€170).
Investors Chronicle
JD Sports is close to a three-year low, but it offers “an international growth story” in 2018 via its European and Asian operations (349.5p). There is a lot of “hidden value” in Phoenix Spree Deutschland’s Berlin housing portfolio (381p). Pub and brewing group Marston’s 6.6% dividend yield makes this IC’s income tip of the year (119p). Anglo-Dutch media giant Relx offers reliable growth and consistent quality (1,713p). Engineer Atlas Copco AB is a “low risk overseas” stock (SEK363.7). Analysts are gloomy on iron-ore miners for the year ahead, but Ferrexpo’s premium offering sets it apart (274p). Original content is valuable in the age of TV streaming, and Peppa Pig owner Entertainment One looks ripe for a takeover (302p). Wariness of outsourcers has hit Babcock International, but if sentiment improves “even a little” there could be “major upside” (676p).
Money Observer
Speculative tips: The head of Prudential’s Asia unit thinks it can double its profits over the next five to seven years – “growth at a good price” (1,827p). Own-brand products maker McBride has boosted margins and offers attractive growth prospects (226p). Electronics distributor DiscoverIE has a record order book and could deliver double-digit growth in the years ahead (331p). Lloyds Banking Group is in better shape than most of its rivals (65p). The City has been disappointed by past efforts to turn around M&S, but new chairman Archie Norman has a great track record (308p). Shares in Galliford Try did badly last year but it is now “the cheapest housebuilder around” (1,184p).
Value tips: Lift and cash-machine components maker Dewhurst should continue to prosper (713p). Big firms have been cutting marketing budgets, but advertising agency System1 has the entrepreneurial streak needed to weather the storm (400p). The specialised building products supplied by Alumasc should help it to outgrow the wider market (168p). The outlook for UK defence spending is hazy, but specialist Cohort has a strong position in key areas such as intelligence, electronic warfare and cyber-security (314p). Kitchen trade supplier Howden Joinery is expanding and dominates its niche (443p). Electronics specialist Solid State does high-end, specialised work in which it has few rivals; it makes “big profits for a small company” (443p).
Shares
AB Dynamics is in the thick of the electric-vehicle revolution (937.5p). For exposure to pharmaceuticals without the risks of drug development, buy Alliance Pharma (61.25p). Waste-management group Biffa’s market will only grow with the population, yet it is cheap (253.25p). Charter Court Financial Services should benefit from the robust buy-to-let mortgage lending market (251.75p). Funeral-services provider Dignity is a high-quality, cash-generative business (1,691p). Dixon Carphone has had a tough year, but strong market share and deep supplier relationships should help it to cope (190.25p). Fast-growing digital marketer DotDigital could hit 150p over the next 12 months (97p). The prospect of a resumed dividend is drawing more attention to publisher Future (394.75p). The rise of electric vehicles has put the market off emissions catalyst maker Johnson Matthey, but the group is strong in battery tech and health (3,066p). Sage is a relatively safe, cash-generative company – ideal for an uncertain year (785.5p).