Stock-picking marvels

Currently, my weekly magazine column is released at 12 noon online every Monday in advance of hitting the newsstand. As a result, internet subscribers have a first-mover advantage to profit from any early share price moves in the company I am writing about. This has posed a problem for me and one which I requested your help to solve a couple of months ago. I have to admit that I was overwhelmed with the response and would like to thank everyone who took the time to reply. It is most appreciated.

On careful consideration, I have decided to continue releasing the majority of my articles during the week at random times and simultaneously alerting online readers via our daily e-mail. I will also continue to release one column a week at 12 noon on Monday. This has the benefit of enabling readers to allocate a pre-determined slot each week to view at least one of the columns on our website while also benefiting from my advice as and when I see a trading opportunity to capitalise on. A great example of this came about on the morning of Thursday 10 January when two of the companies I have been closely following, chip maker IQE (IQE) and Aim-traded investment company Trading Emissions (TRE), released bullish news which warranted an immediate update for what is now a rapidly growing number of online subscribers ('A tech share worth buying now', 10 Jan 2013).

Shares in both companies had risen by 20 per cent and 30 per cent, respectively, since my last updates a matter of weeks ago and I believed that readers would appreciate some real-time advice on these latest developments. My online article was published that afternoon and e-mails were sent out to our database of subscribers so that they could react to the news accordingly. The same thing happened on Friday last week when I noted some interesting developments in stamp and collectibles company Stanley Gibbons (SGI), housebuilder and land developer MJ Gleeson (GLE) and investment company Spark Ventures (SPK). This prompted yet another online article (Small cap wonders, 11 January 2013).

It was deja vu this week when retailer, Moss Bros (MOSB) issued a bumper trading statement and I noted an important share price break-out in marketing services firm Communisis (CMS). If you missed that article (Jumping the gun, 14 January 2013), or a trading play on Bollywood film producer Eros (EROS) (A share firnly in the picture, 15 January 2013) and Netcall (NET) (Jumping the gun: take two, 15 January 2013), they can all viewed by going to my home page on our website (www.investorschronicle.co.uk/comment/simon-thompson).

The other benefit of releasing articles in this way is that it enables a greater number of our readers to have the opportunity to buy into my individual share recommendations. For example, in the final quarter of 2012 I produced no fewer than 29 columns and three full-length features that included a combined total of 24 recommendations on shares, indices and traded options. I realise that there is little I can do about market makers marking up prices intraday once they are deluged by buy orders on the companies I am highlighting. However, having monitored the trades going through the market on all of these recommendations, I have concluded that, in aggregate, a significant amount of money was invested close to my advised buy in prices on virtually all the recommendations. True, not everyone will be able to buy in every share at my advised price, but by increasing my output at least more of you now have the opportunity. That said, there is little point me giving 24 recommendations in a three-month period if their subsequent performance does not match the level of research and time I dedicate to each one. On that score, we have done well as the average trade is showing a gain of 16.6 per cent on an offer-to-bid basis including some spectacular gains on the likes of Telford Homes (TEF), Moss Bros (MOSB), Molins (MLIN) and Henry Boot (BHY). In other words, even if you didn't manage to buy in at my recommended price in those articles, the subsequent share price performance has been so strong that everyone that did buy in should be showing substantial gains.

How Simon Thompson's recommendations have performed from the fourth quarter of 2012

Finally, my first-quarter housebuilding effect appears to be working again, with the sector up 7.1 per cent since the start of trading on 2 January. That's almost 6 points more than the gain on the FTSE 100. To recap, I advised using a classic long-short trade by buying shares in all the eight FTSE 350 housebuilders in equal measures and simultaneously buying a Deutsche Bank FTSE 100 short daily ETF (XUKS) to try and create the 'alpha' this trading strategy has consistently generated in the first three months of the year for the past 32 years ('Foundations of a rally', 10 Dec 2012). It's still not too late to buy into a sector whose prospects from my lens look as safe as houses for at least the first quarter of this year.

Table two: FTSE 350 Housebuilders' performance table