Steady rather than spectacular. That's the verdict to date on the performance of Investors Chronicle's , the collection of eight disparate shares featured in the magazine of 7 January that we reckoned could do good things in 2011.
'Good' rather than 'great' was our adjective of choice because this year we did something different – we split up the eight by investment style. So, some of them – our blue-sky tip of the year (Chariot Oil & Gas) or our growth stock of the year (NCC), for example – might have been expected to motor. Others, however, were more likely to produce a stolid performance; the likes of our income stock of the year (Aviva) or our 'old reliable' pick (Tesco). As a result, the average of all eight would inevitably be good rather than great.
However, the average of the eight has outstripped the performance of the FTSE All-Share index. On an offer-to-bid basis (ie, the actual prices at which investors could have been able to buy and sell), the average price of the eight is up 6 per cent. Over the same period, the All-Share, which isn't encumbered by bid and offer prices, has risen just 1 per cent.
As is so often the case, there are star performers, a dog, then the also-rans. The star – with its share price up 29 per cent – is palmoil producer Asian Plantations. With our tip price of 203p pitted against estimated underlying value of 500p per share, the potential for the shares to rise was always real. And within weeks the price topped 300p. It has drifted down since then in the absence of much news from the company, which is developing 15,000 hectares of land in Malaysia. But, as far as we know, Asian's planting plans remain on track. So, given strong demand for palm oil – a wonderfully versatile crop that can be used in anything from detergents to mayonnaise to biofuel – we are happy to stick with our buy recommendation.
The dog looked like being recovery stock of the year Charter International, which is not recovering as fast as we had hoped. That much was made clear by a profits warning in May in which Charter said that its weldingequipment supplies operation, ESAB, was suffering as steel consumption failed to meet expected levels.
Nor did it help that ESAB faced fierce competition from bigger rivals. Charter may yet recover, especially as its other division – Howden, which sells fans and heater exchangers for power stations – comes into its own late in the economic cycle. But the profits warning created sufficient doubt for us to take its shares off our buy recommendation at 584p. The price has since bounced all the way back to 812p as Charter has become a target for bid speculation and its shares are still worth holding.
Of the also-rans, the really frustrating one has been Chariot Oil & Gas. That's because, within weeks of our tip, the share price had jumped more than 50 per cent in anticipation of an announcement that the company had signed an agreement with a major oil producer to help develop its oil fields in offshore Namibia. But that announcement still hasn't materialised and the share price has dropped 39 per cent from its 2011 peak, although Chariot's bosses remain as bullish as ever. So the problem may be over-egging expectations and, as the underlying story is compelling – Chariot could be sitting on 10bn barrels of oil – our recommendation is still to buy.
Of the others, the best performer has been cyber security specialist NCC. Its shares are up 21 per cent and, , there is little reason to suppose that the company's strong performance won't continue.
Tesco's share-price performance has been a bit disappointing, as has the faltering pace of its sales growth in the UK. But, longer term and globally, there is every reason to think that Tesco will continue to trundle out remorseless growth, albeit at only a steady rate.
Aviva has done all that one would expect from an income stock of the year. Even if its share price remains at its current level, then, adding in a prospective 6.6 per cent yield, which was available at the start of the year, the total return for 2011 will be approaching 15 per cent – not to be scoffed at.
British Empire Securities & General Investment Trust was always a safety-first bet – the trust, after all, focuses on shares that trade below their underlying net asset value. And so it has proved. The price has trundled along with a 4 per cent rise, while the discount to net assets has stretched a touch to 6 per cent.
Shares in property investor Metric Property, our newcomer of the year, are unchanged on our tip price, but the retail specialist says it continues to find opportunities to use its capital.
