Welcome to our 2008 Tips of the Year! After a reasonably successful 2007, when we , but failed to match the success of the previous year (see review article), we've picked eight shares that we think will prosper whatever the economic conditions.
Some themes run throughout the selections. One is emerging markets. We're not too convinced of the 'decoupling' argument - the theory that in 2008, developed economies will stagnate but emerging ones will continue to grow. But nevertheless, we like companies that are heavily exposed to emerging markets, such as Vodafone and Halma. We're also keen on companies that get lots of their revenue from the public sector (such as Mouchel) and on outfits like ICAP, which actually benefit from financial market turmoil because it creates the volatility on which they thrive. And you can see from the inclusion of Ferrexpo and European Goldfields that we think the commodities boom has some legs left on it.
So, without further ado, 2008's tips of the year are:
VODAFONE (VOD)
Emerging markets, mobile data and softening regulation all point to a year of growth ahead for mobile telecoms giant Vodafone.
HALMA (HLMA)
Halma's prospects in China, plus its defensive merits, make its shares a buy.
ICAP (IAP)
Icap's business looks set to benefit from continuing worries in the world's financial markets.
MOUCHEL (MCHL)
Mouchel is expected to grow earnings by almost 20 per cent for each of the next three years and its end markets are both buoyant and defensively positioned.
EUROPEAN GOLDFIELDS (EGU)
European Goldfields has several strings to its bow, not least a reserve of 10m ounces of gold and a track record of profitability.
FERREXPO (FXPO)
Increasing profitability looks set in stone for this Ukrainian iron ore miner.
PV CRYSTALOX SOLAR (PVCS)
Solar power is growing fast and PV Crystalox is one of the oldest and best positioned players in the sector.
SSP (SSPH)
Strong recurring revenue and international growth prospects make SSP a tip of the year.
