Ahead of the new round of Xmas tips for 2023, here we celebrate and commiserate with those who took part in the 2022 stock-picking contest.
At the halfway stage, there was a clear leader and two other tips standing in positive territory, and in the end we finished with a quartet of challengers in positive territory and one flat.
Looking through the wide spectrum of share tips and fund ideas, they tell the story of 2022 stock markets pretty well: the final standings are led by an inverse ETF shorting a tech fund, a UK mid-cap tech company taken over by a North American rival and a fund that aims to deliver positive returns whatever the market conditions.
Several stock pickers have shown admirable consistency (including me, remaining consistently poor), though there was quite a lot of moving around the table, with this year's winner having been in the relegation places in the final result of the 2021 tips contest, while last year's winner with a 158% gain finding himself only two places from the wooden spoon for 2022.
The new round of stock picks for next year will be published in the coming days – watch this space.
2022 winner: SARK ETF
Picked by Neil Wilson, chief market analyst at Markets.com
Price US$60.75 at close on 12 December, up 63% from the Xmas tip price of US$37.2 (from 29 Dec 2022)
Neil walks away with the 2022 trophy, having quickly raced into first place with his choice of the Tuttle Capital Short Innovation ETF, to use its full official name, which is a way to short Cathie Wood’s ARKK Innovation fund.
While the gains peaked in May and June, the Scotsman kept a good margin over the rest until the end, to avenge his lowly finish the year before and cap off a week in which no doubt he didn’t shed a tear when England were knocked out of the footie.
“It was a pretty clear-cut slam dunk to call the top of speculative tech as the inflation genie got out and the Fed was bound to pull the trigger on rate hikes…and even easier when you have Cathie Wood doing some absurd amounts of concentration for you,” he humble-bragged.
2nd: Micro Focus International PLC (LSE:MCRO)
Peter Higgins, private investor, co-host of the Twin Petes Investing and Investing Matters podcasts
Price 532p, up 30% from tip price of 409.2p
Podcaster Peter bags an impressive second place, with a big jump from fifth from bottom at the halfway stage after Micro Focus was taken over by Canada’s OpenText for £5.1bn. The reasoning Peter gave last December was that this “former UK tech darling was undergoing indigestion” after its own takeovers, with its shares trading at a level “significantly discounted to the sum-of-the-parts intrinsic value”. It’s good when a deep-pocketed trade buyer sees things the same as you.
Here's what Peter says now: “I am very pleased to have achieved 2nd place, during 2022 which was a horrible, dangerous and volatile year for all investors including those of the highest experience. Given I am merely a private investor competing in such a very strong, experienced field, I hope I've represented private investors well.
“As I held MCRO in my personal ISA portfolio, I am a tad disappointed with the recommended cash takeover offer at £5.32, plus this takeover means another UK tech co now falls under the ownership of an overseas peer. Did OpenText get a bargain? I very much think they did.”
On a more positive note, Peter almost doubled his money, including dividends, as he locked in what he says is the 51st takeover of one of his portfolio companies in eight years of ISA investing.
3rd: Ruffer Investment Company Ltd (LSE:RICA)
Peter Sleep, senior investment manager at 7 Investment Management
Price 311.5p, up 7% from Xmas tip price of 291p
Our other Peter finishes in the bronze medal position for the second year running, having slipped from a halftime position of second place.
He attributes part of his “relative success” in the last two years to seeing “evidence of a lockdown bubble in markets. I therefore took a contrary view and picked two conservatively run ideas that I thought would be suitable for smaller investors”. Look forward to more of the same when we publish the 2023 tips later this month.
4th Unilever PLC (LSE:ULVR)
Chris Beauchamp, chief market analyst at IG
Price 4,122p, up 3.2% from Xmas tip price of 3,996p
Chris was pleased to be one of just four stock pickers that maintained a positive share price performance over the year and in doing so he gains somewhat of an Arsene Wenger-like reputation for grabbing fourth place again.
As he says, “after a choppy first quarter, Unilever has clawed its way to positive territory, with its dividend and recurring revenues a compelling attraction in these difficult times. Plus, the firm looks to have protected its margins from the worst ravages of inflation, another reason for the stock’s rally since March. Overall, Unilever investors should be very happy with its performance given the tough year for many markets.”
Invesco DB Agriculture Fund/WisdomTree Agriculture
Vince Stanzione, financial trader, trainer and author of The Millionaire Dropout
Price US$19.73, flat from Xmas tip price of US$19.77
After bagging second place in 2021, Vince got off to a good start this year, with his agricultural ETF dashing higher, boosted by food concerns following tje Ukraine invasion, but this agriculture ETF was in positive territory for most of the year before a dip this month.
His backup pick of a similar London-listed ETF, WisdomTree Agriculture (LSE:AIGA) has done slightly better, climbing from just under US$6 to close yesterday at US$6.47.
“I had expected agriculture to do a bit better and with the various supply issues and after a strong start to the year helped by the Ukraine war, prices of agriculture have faded. I do still believe agricultural commodities have potential, but I have something different for 2023 so stay tuned.”
Vanguard US Equity Index Fund – Accumulation units (GBP)
Maria Nedeva, business school professor and creator of The Money Principle site
Price £714.7, down 8.2% from tip price of £778.345
Blogger Maria said she liked investing in funds as she found value stock investing “high maintenance”. She suggested a preference for two funds: Vanguard US Equity Index Fund, her entry in our Xmas tips contest, and Blue Whale Capital Growth Fund.
Having had the low-cost Vanguard fund in her own portfolio and with it not finishing a year at a loss since it was launched in 2009, this past year has been a bit of an anomaly and goes to prove the only boilerplate statement that past performance does in no way guarantee future performance.
Even though it includes over 4,000 stocks diversified across sectors, US equities as a whole have been sold off as the Federal Reserve ramped up interest rates, yadda yadda, we have all read the reasons. However, an 8% decline is far from horrendous compared to some others out there.
Invesco China Equity – Accumulation shares (GBP)
Darius McDermott, managing director of FundCalibre
Price 712.2p, down 9.5% from Xmas tip price of 786.95p
As Darius says, “well done to everyone that didn't lose money...that has not been easy in 2022!”
He picked the Invesco China Equity fund for 2022 and on the plus side, it was well ahead of the sector average of a 19.8% decline.
“This time last year it was all about your view on inflation, and it may well be the main factor again in 2023,” he says. Most – myself included – were surprised by the persistent and high nature of inflation this year.
“With recessions on the skyline and much heightened political tension, the tip for next year is very trick…” – and we’ll leave it there as a teaser for the new tips update coming soon.
VinaCapital Vietnam Opportunity Fund Limited (LSE:VOF)
Dan ‘Wilderness’, operator of The Financial Wilderness blog
Price 452p, down 12.7% from tip price of 518p
In Dan’s words, this was “a disappointing final quarter for the year for VOF which (in comparison to other investments) moved from holding up reasonably well to having something of an end of year slump.
“Whilst not my most successful pick for the single year, there’s still a lot of like here long term as a substantial opportunity – alongside the natural growth of Vietnam, it’s a beneficiary of US-China trade tensions.”
Legal & General Group PLC (LSE:LGEN)
John Kingham, investment writer and blogger at UKdividendstocks.com
Price 252p, down 15.4% from tip price of 297.8p
Although the abovementioned Unilever was a relative winner and the FTSE 100 was one of the few major indices to be close to positive territory over the year, not all of London's blue chip stocks enjoyed the same ride.
Even the shares of big solid life insurers have had a tough time in 2022, with LGEN down almost 35% by mid-October in what John called “bumpy” year – and even though, as he says, the business has performed well.
“L&G's dividend went up 5%, its balance sheet appears to be very strong and it has a dividend yield of about 7%, so I'm happy to hold."
CRH PLC (LSE:CRH)
Danni Hewson, AJ Bell financial analyst
Price 3,211p, down 18% from tip price of 3,906p
CRH was another FTSE 100 that did pretty well operationally but its shares were given a tough reappraisal in light of the wider stock market reset.
Here's what Danni says: “Inflation and impending recession don’t exactly create a solid backdrop for business and investors have rightly been wary about the impact those two things alone will have on the construction sector. CRH has seen sales of building materials in Europe take a big hit over the last nine months but that dip has been more than made up for by increased sales in the US and it’s building projects unit has thrived in a post-covid world.
“Looking ahead there’s a fair bit of choppy water to navigate, not least an anticipated slowdown in UK housebuilding, but President Biden’s Inflation Reduction Bill should provide substantial ballast and the company’s laser like focus on underperforming operations will help it keep revenues on point. It’s share price has suffered this year but it feels like a prime example of over-selling and the comprehensive share buyback is also a major point in its favour.”
Apple Inc (NASDAQ:AAPL)
Victoria Scholar, head of investment at Interactive Investor
Price US$144.49, down 19% from tip price of US$179.29
Two analysts from rival investment platforms are separated by only a slim few percentage points (ramping up the tension for the 2023 tips contest!).
Offering up her stock pick a year ago, Victoria apologised that it might be a “bit boring” (she wished!) but felt it was set to benefit from the post-pandemic economic recovery, and after a challenging 2021 the company was hoping for some respite from its supply chain and chip shortage problems.
As recent issues with its major iPhone supplier in China have shown, such issues have been very hard to shrug off even for a multi-trillion-dollar behemoth.
On top of those problems, Victoria notes that “rising inflation and the threat of recession in its key markets are dampening demand for the iPhone, its most important product as we head towards Christmas. Plus, Apple is also grappling with a negative translation effect from the greenback’s strength which is reducing the dollar value of its international sales. Despite this, Apple still managed to beat expectations on the top and bottom line in its [latest] quarterly results.”
Games Workshop Group PLC (LSE:GAW)
Dan Lane, senior analyst at Freetrade
Price 7,295p, down 28% from tip price of 10,080p
A lower-mid table finish on his debut season - just outside the bottom three - for Dan, but below rivals Victoria and Danni.
“It’s tough to watch quality characteristics get punished,” he says. “Games Workshop still has them in abundance but product delays and cost price inflation almost immediately heaped the pain on my pick at the start of last year.
“I said the company would need to repair its relationship with fans over being a bit overzealous on controlling the IP (sending cease and desist letters to community members creating Warhammer fan fiction online did seem a bit overkill). But, even though everyone’s broadly friends again, lower profits and licensing revenues halfway through the year killed off any fight the shares had left for H2.
“It’s far from game over though and, at around 16x earnings, the stock’s even more appealing this time around. GAW has more than enough cash on hand and margins are exceptionally healthy, even after a slight dip. Given how much household budgets have been squeezed, and how much they’re likely to be in 2023, that’s a remarkable feat.
“There’s still no real competitor in the space and if the company can finally confirm freight costs and inventory provisions have normalised, and it’s making decent money from licensing deals, 2023 could be a different story completely.”
Cordel Group PLC (AIM:CRDL)
Andrew Hore, editor of The AIM Journal
Price 7.75p, down 29.5% from tip price of 11p
Andrew finished top of the table last year but finishes a chastening third from bottom this time – a not-unusual peril of specialising in small cap shares.
Here’s his thoughts on the company now: “Surveying and Corridor.ai analysis platform operator Cordel has won contracts with rail companies in the UK and US, but revenues are taking longer to build up than expected. The new deal with Ricardo’s rail subsidiary could be highly important for long-term prospects because of the international reach of the partner. In the year to June 2022, revenues increased from £1.69mln to £2.27mln, while the loss was maintained at £1.2mln. There was still £989,000 in the bank at the end of June 2022.
“Cordel could get near to breakeven this year. The share price has slumped from 11.5p to 7.75p, but the long-term prospects still look good.”
Purplebricks Group PLC (AIM:PURP)
Oliver Haill – your correspondent
Price 9.5p, down 61% from Xmas tip price of 24.3p
From lower mid-table last time to one place off the bottom spot, at the very least you could say that I'm playing the perfect host by not embarrassing my guests by outshining them with my dazzling ability.
At the time I said I was looking for a comeback stock to try and bag big gains. Poking through piles of profit warnings my stock-picking pokey-stick came up with Purplebricks on the end of it, which I liked as it was valued at less than half of annual sales.
“I’m sure there will be more pain to come,” I successfully prophesied, but when it came to the operational improvements and returning verve, I was more Nosferatu than Nostradamus.
There may be a boost to the shares coming next week if, like activist investor Lecram, you believe that chairman Paul Pindar is a big reason for the company's failings. A shareholder meeting has been requisitioned to take place next Monday, 19 December, to try and remove him and appoint Harry Hill, the former chairman of Rightmove and Countrywide instead.
Metahero (HERO/USD)
Price US$0.003751, down 97% from tip price of US$0.1404
Proactive’s William Farrington is picking up the piece after Andy Robinson, vlogger at Operation Crypto, chose Metahero last year.
“It should come as little surprise that Metahero’s HERO token absolutely tanked in 2022,” says my eminent colleague. And tank it did, with a loss of more than 97% and its market capitalisation terms going from around US$650mln to less than US$20mln.
“With the project leveraging Ultra-HD photogrammetric scanning technology to scan people and real-world objects into the metaverse, the investment case for Metahero absolutely had its merits at the tail end of 2021, when the metaverse seen as the next big thing and Metahero appeared to be a viable pick-and-shovel play.
“But the metaverse concept has since fallen by the wayside, in no small part due to the laughing stock that Meta, formerly Facebook, has become.
“The tech also has severe scalability issues, with the scanning chamber requiring a 10 by 10-metre space to work. How on Earth does Metahero expect ‘to accelerate the mass adoption of crypto by bringing in the next 10 million users with next-gen 3D technology’, when that technology is the size of a small apartment?”