Daily Mail 2006 tips: More gain than pain
Each week Fleet Street share-picking veteran Brian O'Connor gives his view on hot stocks in Investment Extra. This week, he examines his recommendations from last year...
Picking the right time to review share tips is difficult. But it is time to examine the performance of the shares I tipped during 2006.
They were a strange mix of steel, uranium, gene silencing technology, green energy and air travel. But some of them worked well.
The best performer of the 35 outright tips I made over the course of the year was SR Pharma, the pharmaceutical group which works on 'silencing' some of the genes in the human body to suppress disease or aid recovery. SR has renamed itself Silence Therapeutics. Tipped at 18p in November, it is now 113p - a five-fold gain.
Recognising the uranium boom early - with the help of some excellent research from Jamie Strauss and Sacha Borthwick, the sector experts then at broker Hargreave Hale - gave the tips a big boost. UrAsia Energy, now merged with Canada's Uranium One, and Uramin both more than doubled.
More conventional winners were steelmaker Corus and Air Partner, which charters planes for business. Corus was tipped at the start of the year at an effective price of 308¾p allowing for its share consolidation. India's Tata Steel finally paid 608p cash after a bid battle.
Air Partner, which is benefiting from the delays and congestion at major airports, also broadly doubled.
A less happy outcome came from Amiad Filtration Systems, the Israeli water treatment company where the shares have fallen steeply, and incubator group Angle. With the exception of Air Partner, I would have done much better by avoiding the 'A' list.
The average performance of the 35 tips over the year was a gain of 39%. The FTSE All Share index is about 10% ahead of its average for last year, so the tips have beaten the market. The outcome is based on a quick count, not a fully audited set of accounts, and it includes some arbitrary decisions.
Accuma, the debt workout group, was tipped at 227½p in January 2006. After a series of setbacks, it is now 36¾p. On November 18 I advised selling it at 247½p (and also Debt Free Direct, an earlier tip, at 463&frac;12p).
I hope readers took the advice to sell, but I have included the full loss here. The key to good returns is to run your winners and cut your losses. Set a 'stop loss' level at 20% below your buying price and sell when it gets there.
SHARES ADVICE & TOOLS
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Shares which I advised to hold in an Isa for long-term income - BT, Vodafone, Royal Bank of Scotland - are not included in this review, nor are guest columnists' tips.
I also left out the more exotic Canadian and Australian uranium shares tipped - Paladin Resources and SXR Uranium. Each almost doubled. Including them would lift the average performance above 40%.
Tertiary Minerals, tipped at 10¼p, has been suspended since January over problems with its Saudi mining licence. I hope these will be solved, and it has other assets, but to be prudent I have assumed a 40% loss.
The actual gain at SR/Silence is shown in the table. When it reached 71½p, I advised selling enough to cover your costs. In working out the average gain, I took a lower figure for SR to reflect this.
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