Before we publish our Xmas tips for 2024, it’s time to take stock of the festive picks from 2023's contest and hail our new champion.
This time last year, the third running of this friendly competition, we asked a select bunch of stock market professionals, investment writers and bloggers to suggest their top investment idea for 2023.
Looking back at the previous year's winners, the 2021 race saw an AIM tiddler beat a uranium giant and a topsy-turvy 2022 tournament was topped by an inverse ETF of Cathie Wood's flagship ARK fund.
It’s safe to say 2023's competition has delivered a clear and obvious winner – in what was a difficult year for investing unless you backed what has come to be known as the ‘magnificent seven’ US tech mega-caps or had been keeping a closer eye on the anti-obesity drugs market.
1st: NVIDIA – William Farrington, journalist at Proactive
Tipped at $153.40, closed at $483 – gain of 215%
Proudly for this publication, it was one of our own journalists who emerged victorious in 2023 – Willam 'Billy' Farrington, who tipped one of those very Mag-7 names: Nvidia Corporation (NASDAQ:NVDA).
A share price gain of over 200% for the Aussie axolotl fancier and punk-loving biker was a cool 190 points ahead of the next challenger and more than 200 above the third-placed competitor.
In his reasoning, Billy pinned his colours to Nvidia’s mast after its share price, like most of its big-tech brethren, crashed nearly 50% in 2022 following chaos in the semiconductor supply chain and the crypto mining sector.
But this year's champion said he is “reluctant to take too much credit for my stellar Nvidia stock pick this year, as I initially expected the group to make good on its fascinating Omniverse digital twin technology”, happily acknowledging that Nvidia’s ballistic rally was more on the back of its dominating presence in the artificial intelligence (AI) hardware industry.
Still, it was a great run for the shares, backed up by record revenue beats through the year.
“We may have peaked though,” Mr Farrington states (Ed: can someone check if he means Nvidia or his stock-picking ability).
As several of the other pickers have done, we offer big congratulations to the winner and a very well done to all those whose tips delivered positive returns in what many said was a very difficult year.
2nd: Delta Air Lines (NYSE:DAL) – Sam North, eToro
Tipped at $32.5, finished at $30.32 for 24% gain
As it was, second place was taken by another newcomer, Sam North of eToro, with his pick of Delta Air Lines (NYSE:DAL) based on the airline industry continuing its own rebound.
Delta outdid all the other US airlines, so there was not just a rising thermal-lifts-all-airlines element to this pick.
If we had the FTSE 100, FTSE 250 or MSCI World as our benchmarks, then this selection also outperformed their respective +1%, minus 0.7% and +18% respective performances over the period.
However, anyone who’d been gone all robo-adviser and plumped for the Nasdaq Composite would have been close to second place, with Japan’s Nikkei 225 in similar, ahead of the S&P 500 or MSCI World battling for second or third.
3rd: Fidelity Japan Fund – Dan ‘Wilderness’, The Financial Wilderness blog
Tipped at 550p, rising to 625.1p for 13.7% gain
Third place was quite different, in being a Japan fund, which was what proved an astute punt from Dan ‘Wilderness’ in his second year.
His argument, that the cheap yen creates a lot of buying power despite Japan’s macroeconomic difficulties, creating some export advantages and potential for value-increasing takeovers, has coincided with other factors in a year when Japanese stocks hit a 33-year high after years in the doldrums.
Dan said he was very pleased with the performance outmatching the sluggish UK markets and Japan had featured as a significant highlight of the year as he enjoyed a honeymoon in the country too – “got to exercise a bit of personal oversight over those investments!” as he told me.
He still sees Japan-focused funds offering further growth thanks to the still-weak yen.
Slow and steady
Slightly further down the list but still notably in positive territory in a year when more than half the tips were not, Peter Sleep, who had finished in the top three in the previous two years’ competitions.
He said he is happy with the outcome, with his Man GLG Income fund choice nearing a 9% gain in a lacklustre UK market.
“With this sort of competition, where you can pick a volatile instrument like a single stock or a diversified fund, the winner, and the last placed contestant, is sure to be one of the volatile instruments,” Peter sagely adds.
“The two UK core funds, the Man GLG Income fund and the Mercantile Investment Trust both did equally well with the other funds not too far behind.”
Peter added that it is “good to see that other areas of the world like Japan do well after so many years in the doldrums so hats off to Dan Wilderness”.
4th place to 9th: mid-table finishers
Just Group PLC (LSE:JUST) – Oliver Haill, Proactive – 78.3p to 85.1p for 8.7% gain
Man GLG Income fund – Peter Sleep, 7IM – 329.3p to 357.5p for 8.6% gain
Mercantile Investment Trust PLC (LSE:MRC) – Ian Cooper, Brewin Dolphin – 193p to 207p for 7.3% gain
The Walt Disney Company (NYSE:DIS) – Neil Wilson, Markets.com – $86.67 to $92.83 for a 7.1% gain
Shell PLC (LSE:SHEL, NYSE:SHEL) – Chris Beauchamp, IG – 2352p to 2500.5p for 6.3% gain
iShares Core Global Aggregate Bond UCITS ETF – Victoria Scholar, interactive investor – $4.33 to $4.31 pretty much flat
'I will try to do better'
On the other side of the coin, the choice of insurer Direct Line Insurance Group PLC (LSE:DLG) for John Kingham of the UK Dividend Stocks blog, “turned out to be a bit of a disaster” last year, he freely admits, as the business failed to raise premiums enough and was forced to suspend its dividend.
But John still believes in his pick and still owns shares in the business, saying, “this is a good example of why diversification is so important. I will try to do better in 2024!"
Further down is another Peter, of the Higgins variety and known to his social media and podcasting followers as Conkers3, was not able to follow up his second place the previous year but remained sanguine about it.
“In the voice delivery of Craig Revel Horwood, ‘Spirent – what an absolute disaaaster darling’,” he says.
Having selected Spirent in “the hope of a recovery in its fortunes and the outside chance of takeover”, a 57% plunge shows that these chances remained locked outside during 2023 – though plenty of other UK mid- and small-cap companies continue to be targeted for overseas trade buyers and private equity.
A little further down the list, but not far on a total return basis, is Vince Stanzione, who finished second and fifth the last two times.
His choice of South African thermal coal mining stock Thungela was not a Rippon or a ripper, enduring a poor year due to transportation issues, but he highlights that the stock paid two dividends of £2.15 a share. (Ed: OK, Vince, but that would probably have put you in 14th instead of 15th.)
Coal prices are down from the 2022 highs, but Vince says he still holds Thungela stock, adding that “they can still mine profitably however the rail issues Transnet is holding them back”.
With his tip of Digitalbox PLC (AIM:DBOX) coming in last place, Andrew Hore, who won the 2021 contest by the way, says "there is recovery potential".
He noted that the digital media publisher, which owns titles such as The Daily Mash, The Poke and TVGuide.co.uk, not long ago reported interim revenues ahead of expectations, but has been held back by poor second-half traffic numbers.
"So, there has been no recovery in the second half. A small profit is expected this year, but it could recover to £440,000 in 2024. Recent acquisitions should start to contribute," he adds.
Better luck for 2024, Andrew!
10th and below
TM CRUX UK Smaller Companies fund – Darius McDermott, FundCalibre – 107.2p to 99.16p for a 7.5% decline
Fidelity China Special Situations PLC (LSE:FCSS) – Danni Hewson, AJ Bell – 238p to 207.5p for 12.8% decline (6.35p dividend)
Direct Line Insurance Group PLC (LSE:DLG) – John Kingham, UK Dividend Stocks – 219p to 188.5p for 13.9% decline
Burberry Group PLC (LSE:BRBY) – Dan Lane, Freetrade – 2,025p to 1,489.5p for 26.4% decline (44.5p divi)
Spirent Communications (LSE:SPT) – Peter Higgins of TwinPetesInvesting podcast – 265p to 115.1p for 57% decline (6.26p divi)
Thungela Resources Limited (LSE:TGA) – Vince Stanzione, trader and trainer – 1,454p to 587.98p (£2.19 in divis) for 60% decline
Golden Rim Resources Ltd (ASX:GMR, OTC:GMRMF) – Peter Hodgkins, private investor – A$0.03 to A$0.012 for 60% decline
Digitalbox PLC (AIM:DBOX) – Andrew Hore, The AIM Journal – 8.75p to 3.22p for 63% decline