We asked a variety of stock market professionals, investment writers and bloggers for their top investment ideas for the year ahead (and beyond).
The tips were published just before Christmas and this is the first quarterly update to see who among this bunch (and me) is doing best so far. Initial prices were taken as of midday 24 December 2020 and the update was at 4.30pm in the UK on 31 March.
Ladies and gentlemen, it looks like we have a winner already – is the game over before we’ve even got halfway?
Andrew Hore, editor of the AIM Journal, plucked a smallcap life sciences company from London’s junior market for his share tip and with a 200% gain so far, it’s not done bad for anyone that liked the sound of his argument.
It looks like a few people did – because the shares took off in the days after the article was published.
Andrew said SkinBioTherapeutics PLC (LON:SBTX), a developer of microbiome-based skin treatments, highlighted the clinical study of psoriasis treatment AxisBiotix that was due to begin in the first quarter, plus potential in areas such as cosmetics with partner Croda.
Indeed, AxisBiotix kicked off enrolment for its food supplement consumer study in January and in February started work with more patients than expected following high levels of demand from psoriasis sufferers and people suffering non-psoriatic conditions.
Half-year numbers revealed a comfortable cash position of £5.5mln as of December and management said they expect significant progress in both the food supplement and cosmetic programmes during the year.
As with all stocks, past performance is no guide to the future, but safe to say this one has a healthy lead with three quarters of the year to go.
SBTX: up 200% so far (from 15.5p to 47.5p)
With charms including management focused on the long-term, low costs, multiple European businesses just turning profitable after a decade of building scale, proven ability to move into adjacent markets and potential cash returns on the back of disposals, John also highlighted a double-digit historic growth rate and a dividend yield of 5%.
As predicted, Admiral sold its confused.com price comparison web site at the end of December and followed this with a strong set of results last month, having benefitted from lower claims as people drove less during the coronavirus lockdowns, rewarding shareholders with a bumper dividend of 86p.
ADM: up 35% so far (from 2,293p to 3,101p)
Vince Stanzione, author of the bestseller The Millionaire Dropout, was glowing in his recommendation of uranium.
A “very credible and clean way to generate electricity”, was his theory, now almost 10 years after the Fukushima Daiichi nuclear disaster.
Cameco Corp (NYSE:CCJ, TSE:CCO) was his tip as the safest uranium play, which is up 26%.
CCJ: up 26% so far (from US$13.56 to US$17.14)
After a surprise swing to profit in the third quarter and with one of the best capital ratios in the sector and with the regulator having opened the door to a return of dividend payments, he saw NatWest as offering a potentially tasty yield of over 4%.
While there were risks, with the shares having declined by around a third last year, he looked past the pandemic to a “garden [that] could be rosier than many are currently thinking”.
Looking good so far.
NWG: up 16% so far (from 169.5p to 196.25p)
Legendary investor Warren Buffett’s gigantic conglomerate, which owns over 40 companies from railways and airlines, to insurers, banks and a major shareholding in Apple, has continued to rumble higher in the first quarter.
While underperforming in recent years as investors sought out higher growth stocks like Tesla or Amazon, leaving BRK at a sizeable a discount to the sum of its parts – it has made some early gains in 2021, including making around 30% uplifts from holdings in the likes of Bank of America, American Express, Kraft Heinz and General Motors, offsetting the near 7% Apple slump.
BRK.B: up 14% so far (from US$224.24 to US$256.44)
The investment company offered investors access to a UK market that he said was “at an interesting inflexion point”, having lagged global markets for a number of years but the apparent ‘conclusion’ of Brexit creating a chance that investors would look to these shores and for that discount to close.
The fund’s manager Alex Wright focuses on solid but out of favour companies, with many still seeing such value in the among the LSE’s ranks.
FSV: up 12.5% so far (from 239.5p to 269.5p)
Oliver Haill at Proactive Investor – well my pick, the iShares Electric Vehicles and Driving Technology ETF (LON:ECAR), is up 9%, so not doing terribly but not as good as it was a few weeks ago – before the tech sell-off in late February.
A punt on electric vehicles was never blue sky thinking and this has been backed up in the early months of this year we have seen story after story about the old lags of the car industry taking off the handbrake on their electric ambitions.
Volkwagen (or is it Voltswagen?) has led the old-school pack, helped by some ambitious battery investment and some bullish backing from brokers.
The ECAR thematic ETFs offers a great way to invest in the sector or idea as a whole and has exposure to these legacy carmakers, who are still behind Tesla but look like catching up in the coming few years.
Some of these old boys, Kia Motors, GM and Ford, are second, fourth and fifth biggest weightings in the fund and are up 35%, 37% and 36% respectively, though this has been balanced by the biggest holding being Tesla, which has done a bit of a U-turn since Christmas.
ECAR: up 9% so far (from US$7.01 to US$7.63)
Neil Wilson, chief market analyst for Markets.com, pointed his index finger at the FTSE 100, expecting “a big recovery” on the back of the UK vaccine roll-out, general liquidity in the market and an expected 2021 dividend yield of 4%.
What’s more, UK stocks looked inexpensive, trading at around a 10-15% p/e discount to the broad European market and at a 35% discount against the US based on a two-year earnings outlook.
The Footsie got off to a barnstorming start to January but has made like a recalcitrant child on a country walk since then.
Maybe later in the year it will grow up.
FTSE 100: up 3% so far (from 6,502 to 6,713.6)
He recommended the asset manager for its resilience and strong fundamentals that include net profit margins above 27%, a return on investment of almost 35%, 195p of dividends since 2014 and yield above 5% for 2021.
Plenty of time left for it to show the way.
POLR: up 0.6% so far (from 692p to 696p)
Chris Beauchamp, chief market analyst at IG, opted for a safety themed pick of Halma Group PLC (LON:HLMA), which has been flat so far.
While a FTSE 100 company, this safety equipment firm probably flies under the radar of some seasoned investors.
Struggling for direction so far in 2021 probably befits this consistent performer as investors and markets also struggle to decide which way sentiment should move them.
As Chris notes, Halma has a strong record of dividend increases but was not cheap, but he was tempted by the apparent alignment of “fundamentals and technicals”.
As with the rest, we will need to wait until the end of the year at least to see if this turned out to have been a sound idea.
HLMA: down 1% so far (from 2,398p to 2,374p)
Darius McDermott, managing director of FundCalibre, chose the Man GLG Income Fund unit trust, which has yet to get going yet.
Darius picked this fund for its value-driven focus on the UK, a “cheap, unloved, and under-owned” market. With cash offering near zero the fund was seen as being “ideally placed to benefit from a pick-up in sentiment and economic recovery”.
It’s still very much early days as far as a fund investment goes.