What the share tipsters are buying now

04.01.2008

by Tim Price

See more by this author

Related Articles

• Vitamins are big business: here's one share to watch
• Three alternative energy shares to buy now
• Gamble of the week: food producer’s improving outlook

FREE email from MoneyWeek

Discover the latest profit opportunities and understand what’s really going on in the investment world with our punchy daily email.  CLICK HERE

Our Most Popular Articles

• House prices record first annual fall since 1996
• The painful rise in the price of food
• Bargain shares among the small caps
• The UK will be in recession by next year
• What to do with your money during the bear market

This genius investor does dizzying levels of research to uncover...Half Price Shares!

Every January we face an onslaught of stocktipping. Measuring these tipsters’ success is a somewhat unscien­tific process, but here is an assess­ment of how last year’s tips fared – and a look at who might do well in 2008. 

As any shareholder will attest, 2007 was tough-going, and the headline gains (total returns of just over 5.5% for the FTSE All-Share Index) hide a multitude of sins. While industrial metals and mining groups typically thrived, there was no shortage of stocks and sectors (real estate, leisure goods, retailers, banks) that got demolished.

In reverse order of merit, The Sunday Times came out worst of the bunch. Any modest gains were more than wiped out by the losers, which included the now universally friendless BBA Aviation (–23%) and bar and club operator Luminar (–39%). 

The Observer did little better. Again, the modest winners were more than offset by losers, which included IT services firm Detica (–42%) and homebuilder Telford Homes (–25%). The Daily Express’s tipsters were, in turn, dragged down by their support for Barratt Developments (–61%) – what could they have been thinking? – while gains generated by The Daily Telegraph’s advocacy of Vodafone (+39%), for example, were largely undone by their commitment to Royal Bank of Scotland (–29%).  

Shares magazine saw an overall portfolio return in positive territory – albeit from a larger tip sheet than its rivals – helped by the outlier gains generated by insurance brokers Broker Network (+139%), which shows the benefits of individual, magnified returns. The Times’s portfolio just squeaked ahead of the All-Share, helped by supercharged returns from Aim-listed e-marketer Asos plc (+124%).

Which leaves the field to The Mail on Sunday – which benefited from oil and gas explorer Afren (+85%) but was punished by Barclays and Halfords – and to The Sunday Telegraph, which thrived on the back of diversified miner Anglo American (+23%) and broker ICAP (+56%), but was tarnished, again, by Barclays.

Finally, Investors Chronicle’s portfolio soared on the wings of BHP Billiton (+69%), Randgold Resources (+55%) and Aim-listed electronic instrument maker PM Group, which was acquired during 2007. By my reckoning, Investors Chronicle navigated best through the year. 

As for 2008, there is little consensus for the year ahead. But given the well-flagged problems for the economy, it’s primed to be a market for stocktippers over index trackers: again, avoiding losses will be as important as the (perhaps retreating) prospect of generating meaningful capital gains.

The Sunday Times, Shares magazine and The Daily Telegraph all search for value amid the wreckage of the banking or home­building sectors. I’m not convinced we are yet at such an easy turn­around – this much was suggested by 2007’s year-end doubts raised over banking giant Citigroup’s ability to retain its dividend.

The Independent fares better with energy and resource sector tips, such as BP and BG Group. But in all, rather than any of the UK press, for 2008 I favour a more international portfolio that can benefit from more durable trends, such as global infra­structure – the one compiled by US magazine Kiplingers, for instance, which includes Teva Pharmaceuticals (drugs), Cemex (concrete) and CONSOL Energy (coal). 

You can read the full list of who's tipping what in the latest issue of MoneyWeek. Click here to download the pdf now: Latest Issue

Tim Price is Director of Investment at PFP Wealth Management. He also edits The Price Report investment newsletter.

Free Daily Email sign up

Sign up here

Money Morning is the FREE daily email from MoneyWeek – a punchy round-up of the latest investment news and profit opportunities. DON’T MISS IT!