A top 10 of stock picks for 2014 as markets end year on a high note: Our tips from last year managed an 11.4% gain. Will we fare as well this year as our reporters select a mix of established shares and new stocks?
(Guardian (UK) Via Acquire Media NewsEdge) Stock markets spent 2013 relishing the fix from the US Federal Reserve's supply of cheap money - all the time worrying about when it would come to an end.
Stimulus addicts grew increasingly concerned they might face cold turkey before Christmas, at the Fed's last meeting of the year. But in the event chairman Ben Bernanke trimmed the central bank's $85bn-a-month bond-buying programme by just $10bn (pounds 7.2bn) and promised to keep interest rates low for some while, thus continuing the support the markets craved.
The Fed's actions, as well as accommodative policies from other central banks, sent many markets to new all-time peaks during the year, including the S&P 500 and Dow Jones Industrial Average in the US and Germany's Dax, which ended 2013 up 26%, while Japan's Nikkei had its strongest year since 1972. Closer to home, the FTSE 100 came within 90 points of its record high in May, but never quite made it. This was partly thanks to its exposure to commodity companies which had been undermined by a weaker dollar - itself the result of the Fed's flowing money taps. Worries about a credit crunch in China also unsettled the mining sector since the country is such a large consumer of commodities. These were eased somewhat by the People's Bank of China injecting more liquidity into the system as the year ended.
Overall the FTSE 100 rose 14.4% during 2013, while our share tips managed a credible 11.8% gain although they disappointingly underperformed the market.
Asos, chosen by Terry Macalister, was the star performer, while also worthy of mention were Betfair and Home Retail Group.
However there was one choice in particular which let us down. Herbalife, which was rashly chosen as a short sell - in the hope of profiting from a falling price. In the event it gained ground, as accusations that it was a pyramid scheme - denied by the slimming powder company - failed to stick. In the calculations, this is shown as a 165% loss. My choice, Chemring, dropped 2%. It started brightly but October's US government shutdown hit its defence orders while it also ran into production problems.
Of course, 12 months is an arbitrary time period to track a share price, and in the real world investors would be likely to cash in their gains at different times of the year. Something to bear in mind as we move on to our selections for 2014.
We have chosen a mix of established and lesser known businesses. It is by no means a balanced portfolio. But it is a mix of companies we believe should do well in the months ahead.
For those who believe that new oil and gas finds still have a role to play in meeting world energy demand Salamander Energy - a FTSE-250 member - is worth a look.
The company is less than 10 years old and was set up by an experienced team as an independent exploration and production business purely focused on south-east Asia, where power demand is set to grow strongly.
Salamander, 111.75p, has just increased its estimate of oil in place at its core Bualang field off Thailand, has an interesting exploration gas well underway at West Kerendan onshore Indonesia and has just entered Malaysia.
Vodafone's chief executive Vittorio Colao pulled off the deal of the decade when he sold his company's biggest asset, a 45% stake in American mobile giant Verizon Wireless, for $130bn.
The British group's shares are trading at 12-year highs of 237p up by almost 50% since the beginning of 2013, as investors await not only the Verizon windfall, but a possible bid by AT&T. The American telecoms group is looking to secure a foothold in Europe and may have put in a call to Colao. Vodafone is now a smaller mouthful to swallow, and has pounds 17.7bn of newly disclosed tax assets to offset AT&T profits. Bernstein Research thinks the Americans could pay up to 280p a share. A counter bid from Japan's Softbank could send the price higher.
In a list of the world's most costly bets, UK gambling companies' punts on America rank highly. So now the theme of US betting liberalisation is back in vogue, is it another mug punter trap?
Maybe, but some US plans look better bets than others. Sportech, the company that runs our football pools, has licences in 26 states and provides pool betting services to 62 racetracks and 220 off-track venues.
It makes profits of pounds 16m and is valued at pounds 171m - a figure that many say does not fully include US potential or a likely pounds 95m VAT rebate. Worth a punt at 81.5p.
An upturn in construction markets in the US and to a lesser extent the UK should underpin growth at building materials group Wolseley. The company has about 80% of its business in these two markets, and after an unexciting 2013, its shares are looking more attractive at pounds 34.25. The management is focusing on building up market share and improving margins, and with a strong balance sheet, there is also the prospect of bolt-on acquisitions to boost the company's results. According to analysts at Morgan Stanley, seven or eight opportunities are under discussion, ranging between pounds 20m and pounds 70m.
Last year's tip, Ruffer Investment Company, did what was asked of it. It provided protection in an uncertain investment world where the medium and long-term effects of central banks' hyper-activity are anybody's guess. This year it's time to crank up the risk level - but only marginally. US firm Stryker is one of the world's largest medical equipment companies, with a specialism in artificial hips and knees. It has enjoyed 33 years of unbroken sales growth, has revenues of almost $9bn, sells its products in more than 100 countries and invests heavily in research. Terry Smith, fund manager at Fundsmith, has been proclaiming Stryker's virtues for ages. The shares at $75.15 are priced at about 17 times earnings - not cheap, but it's definitely a quality company.
Apple hasn't been doing much recently. The Californian company transformed mobile phones (and ruined Nokia and BlackBerry) with the introduction of the iPhone in 2007. It invented a new class of device, the tablet, with the iPad in 2010.
Since then it has released upgrades of both devices and they are now the company's biggest revenue drivers, but it has not introduced a ground breaking product.
Apple fanatics, and there are lots of them, reckon the company has at least three new products in the pipeline: the iWatch, iTV, and iOS for cars. If these have half the impact of the iPhone and iPad they could transform the company again. Now could be a good time to get in on Apple stock. After a spectacular 500% rise between 2007-2012, the shares at $558.4 have barely changed in the past year.
Could 2014 be the year when Lloyds Banking Group declares a dividend for the first time since the 2008 financial crisis? Such a move could further help sentiment in the shares, which rose nearly 60% in 2013 as the mood towards the bank shifted dramatically.
The management, led by Antonio Horta-Osorio, has begun talks with regulators about resuming payouts to shareholders and indicated that the bailed out bank intends to be a high dividend paying stock. That could start in February when the bank reports its results for 2013. While clobbered by the cost of compensating customers mis-sold payment protection insurance and facing scrutiny of its bonuses and sales tactics, the prospect of a dividend seems undiminished, according to analysts. A poll by Thomson Reuters puts the average dividend forecast at 0.2p for 2013 and 2.4p for 2014. The government wants to sell off the 33% stake it is holding after disposing of its first tranche in September. The chancellor will be hoping the dividend makes the shares, now 78.88p, more attractive.
One of the big surprises in Britain's economic recovery has been unemployment's rapid fall. In the three months to October the jobless rate dropped to 7.4%, the lowest since April 2009. This is good news for Hays. The recruiter's shares have had a strong run, rising to 129.8p from 83p in June. Hays' management called the recovery early but has stayed cautious. If the UK really takes off, Hays will be booming and it also has opportunities in its other big markets of Germany and Australia. The dividend yield of about 2% won't attract income investors but the prospect of capital growth should boost the shares in 2014.
The International Air Transport Association - the trade body for airlines expects global profits of $19.7bn (pounds 12bn) next year, up from $16.4bn, largely due to cheaper fuel. So why not pick an airline? Flybe has had a horrible time since floating at 295p in 2010. The shorthaul carrier now trades at 107p but a new chief executive in Saad Hammad wants to focus on niche routes - ie keeping out the competition. The carrier, as Britain's largest domestic airline, is also a tangential bet on the health of the UK economy, which should do nicely next year.
Investors remain stubbornly optimistic about the consumer market despite obviously tough times on the high street so it is tough to find a bargain in the retail sector. While kids were more likely to have wanted a tablet computer than a bike this Christmas, Halfords may still be worth a spin.
Matt Davies, who joined as chief executive last year, has a strong pedigree at Pets at Home and the problems at Halfords play to his strengths - efficiency and customer service. Halfords also has plenty of room for improvement online, one of the few parts of the retail market in growth. Meanwhile, 2014 sees the Tour de France begin in Yorkshire, keeping the UK's fascination with cycling going. Like many retail stocks, Halfords has seen a good run. But the shares have fallen back from an annual high of 493p to 446p. They are relatively pricey at nearly 16 times earnings but still yield more than 3% despite a big dividend cut this year. On balance, self-help should see Halfords find growth where other retailers struggle.
The Guardian business team's share tips for 2014 include computer firm Apple, thought to have at least three innovative products in the pipeline; one of the world's largest medical equipment maker Stryker, specialising in artificial hips and knees; airline Flybe based on bullish profit forecasts from the trade body International Air Transport Association and FTSE250 stock, Salamander Energy, an oil exploration outfit
(c) 2014 Guardian Newspapers Limited.
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