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Tips of the Year 2013

Tips of the Year 2013

You'll often hear it said that stock-picking is a mug's game - that you can't beat the market and that you're better off buying a market tracker. Obviously we'd disagree with that and, looking at the past performance of our Tips of the Year, with good reason - we've beaten the market in five of the past six years, in some by a considerable margin. Our focus on fundamentals continues to pay off, even in the often topsy-turvy world of monetary intervention.

The outperformance has been somewhat narrower this year, but as you can read in our Tips of the Year 2012 review, our selection would also have generated a higher average dividend yield than the market, a quite deliberate policy on our part.

In a low-yield environment, we've adopted a similar approach this year - and while the quest has been made more difficult by the stampede for income, it's surprising how many high-quality dividend stocks are still to be found. Half of our eight 2013 Tips of the Year currently offer a yield in excess of the market average of 3.7 per cent.

A word of warning, though: although we research every one of our share tips thoroughly, and draw on the opinions of the many analysts also researching these companies in depth, they are nevertheless still just ideas that should form the starting point of your own research, or similarly validate research you may have already conducted yourself.

Our eight Tips of the Year should not be treated as a portfolio, either. You'll notice that we follow a category-led approach to our Tips of the Year, and limit ourselves to one in each - something that anyone running a live portfolio would never do.

However, it does mean that there's something here to suit every investment style, whether you're looking for growth, or income or capital preservation. And we've also offered up some alternative ideas, which also tick the right boxes, in each category for you to consider researching.

TIPS OF THE YEAR 2013:

■ Millions of people around the world rely on this company without even knowing it and that's what makes these shares such a reliable investment.

Our value stock of the year specialises in pushing land through the planning process. Consented

land like this is in demand and the company has a significant land bank to draw on.

■ Strong free cash flow, rising revenues and a great track record make this one of the most attractive income stocks in the FTSE 100.

Demand for these shares remains strong, bolstered by the search for yield, and the excellent dividend stream which management assures will continue.

■ Look past the risk and what this company offers is a market leading position, predictable earnings and a fat yield of more than 8 per cent.

This Aim company is no racy investment. It's got a long track record of judicious management and offers a well covered dividend.

■ There's every chance this accident-prone conglomerate will be the subject of a bid target, especially now that it's removed the last couple of barriers to a takeover.

■ Saudi Arabian deserts could be the next hot destination for gold explorers thanks to growing evidence they hold plenty of the yellow metal and our blue-sky tip of the year is leading the international hunt to find it.

 

Read the tips of the year 2012 review.

 

FUNDS:

Fund tips for 2013

Fund tips for 2012: the results

What lies ahead in 2013? Ask the managers

Track the best returns of 2013

What advisors are tipping for 2013

What advisers are tipping for 2013

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By John Hughman,
04 January 2013

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