Top tips from 11 leading strategists

Jul 06, 2006

Every month MoneyWeek holds a Roundtable where we invite experts to discuss the markets - both home and abroad - and offer a few tips to readers. How are they doing?

Dan Denning, editor, Strategic Insider

Denning is still an enthusiastic buyer of Newmont Mining, the shares being around the same price they were in February. With spot gold prices seemingly set to stay above $400, he says, the unhedged producers are heavily geared to further price rises, which may come as the dollar weakens into 2005.

Bill Bonner, editor, The Daily Reckoning

Bonner is also a Newmont fan. Buying the shares, he says, is not so much an investment decision as an insurance decision. There are times in markets when the best you can hope to do is not lose money, and this feels like one of those times. Newmont shares could go down in the short run, but don’t sell. “You wouldn’t cancel a life insurance policy just because you didn’t die.”

Sebastian Lyon, fund manager, Troy Asset Management

Lyon is still a buyer of British Telecom for its yield of 4.7% and its cost-focused management. He has also tipped Shell in our Roundtables, but feels this is currently a little “overbought”. That said, he would be happy to buy on any price weakness and “would not be a seller”.

Arild Eide, senior fund manager, RAB Capital

Eide would still be buying Greek shipping firm Tsakos Energy Navigation (first tipped in July at $33.36, now trading at $36.50). The firm is a good operator in an industry where earnings are going gangbusters.

Barry Norris, manager, Neptune European Opportunities Fund

Everything tipped by Norris so far has been a success, and he would still be a buyer of Maurel et Prom (currently e137.5, up 25% since it was tipped in September) and of Frontline (currently 2,750p), which has returned 59% since it was tipped in May - and that’s not including the hefty dividend payout. At Maurel et Prom, positive news continues to come in from the M’Boundi oil field, while rising tanker rates will continue to support Frontline.

Thomas Bulford, editor, Red Hot Penny Shares

Bulford tipped Invox, which specialises in promoting card-based competitions. The firm announced good results to June 2004 and, following the integration of a recent acquisition, is busy exploiting its database and extracting better terms from its telecom suppliers. The dividend yield is 6.3%, which alone makes the shares highly attractive.

Euan Stuart, director of Japanese equity sales at Macquarie Securities

Stuart would still be a buyer of Invensys, tipped in July. Since then, there have been rumours of a takeover and the price has recovered somewhat. Stuart would also be an even more enthusiastic buyer of Sainsbury’s than ever before. Sainsbury’s shares have fallen 0.37% since he tipped them at 282p in July and “could fall a bit lower when they announce a trading update in a few weeks”, but after that, things will either improve or a buyer will emerge.

Tim Price, a senior investment strategist at Ansbacher Wealth 

Price tipped Anglo American in May and Tesco in June. Anglo is up about 15% since then, and Tesco has jumped about 17%. “I would still be buying both stocks,” says Price. “Our investment approach is predicated on prudent growth whilst endeavouring to avoid capital losses. In this context, I would still be buying both companies. Anglo is still benefiting from global raw-material demand, especially from China. Tesco is wiping the floor with rivals like Sainsbury in food and M&S in just about everything.”

James Ferguson, former Japanese market stockbroker

Ferguson tipped Lloyds TSB back in July. Since then, the shares have risen 0.09%. However, they still offer an excellent yield of 7.8% that doesn’t look like it is going to be cut any time soon.

Pelham Smithers, economist at Smithers & Co, independent research and consultancy firm

Smithers tipped Shell in May at 390p and “would still be a holder of Shell (now at 417p), as it is clear that its expectation of prolonged high oil prices is a reasonable one”.

Robert Catto, senior investment manager, Williams de Broe

Catto would still be a buyer of Aim-listed company Pursuit Dynamics, which he tipped in April and July. The company has a technology that condenses steam in a contained area to create a vacuum. This can be adapted to do everything from powering boat engines to heating a tomato soup in two minutes to fighting fires. It’s a great technology and there is a great management running the firm responsible for it. Also still worth buying is Benitec, tipped in July, which is in the business of ‘gene silencing’, a hot area in the biotechnology sector. It has a tiny market capitalisation and comes with high risk, but has a potentially enormous upside

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