For our Xmas investment tips competition we ask stock market professionals, writers, bloggers and vloggers to suggest their top picks for the year ahead.
This year’s ideas include several share picks, a handful of funds and investment trusts and one cryptocurrency selection.
As this is also a friendly competition of sorts, pitting this bunch against each other (and me) to see whose tip will do best over the coming 12 months.
Here is the list of fifteen, in alphabetical order, followed by the full explanations below, along with their ‘starting prices’ at 11am in London on 29 December or for US-listed options the closing price the night before).
- Apple – Victoria Scholar @ Interactive Investor
- Cordel Group – Andrew Hore @ AIM Journal
- CRH – Danni Hewson @ AJ Bell
- Games Workshop – Dan Lane @ Freetrade
- Invesco China Equity – Darius McDermott @ Fundcalibre
- Invesco DB Agriculture Fund – Vince Stanzione, financial trader
- Legal & General – John Kingham @ UK Value Investor
- Metahero (Hero token) – Andy @ Operation Crypto
- Micro Focus – Peter Higgins @ Conkers Corner
- Purplebricks – Oliver Haill @ Proactive Investors
- Ruffer Investment – Peter Sleep @ 7 Investment Management
- SARK ETF – Neil Wilson @ Markets.com
- Unilever – Chris Beauchamp @ IG
- Vanguard US Equity Index Fund – Maria @ The Money Principle blog
- VinaCapital Vietnam Opportunity – Dan Wilderness @ The Financial Wilderness blog
Victoria Scholar, head of investment at Interactive Investor
Victoria, who is taking over from colleague Richard Hunter who came fifth last year with his bank tip, has gone for a wee US$2.8 trillion name you might have heard of. “I’ve gone with Apple” says Victoria, apologising that it might be a “bit boring”.
“The tech giant looks set to benefit from the global economic recovery while it is also well positioned as a hedge against further restrictions as Omicron looms. After a challenging 2021, Apple could start to get some respite as its problems with the global supply chain and chip shortages subside, which should underpin demand for its shares. On top of that, excitement around its upcoming AR/VR glasses and reports about a foldable iPhone could also generate further enthusiasm among its loyal customer base. Apple also looks poised for a US$3 trillion market cap, a major milestone that could spark further buying.”
Andrew Hore, editor of The AIM Journal
Tour de France fan Andrew carried off our yellow jersey for 2021 with a big lead, a la Slovenian marvel Tadej Pogačar or, for older fans, Eddy Merckx.
This is what he says about his new tip for 2022: “Cordel, previously known as Maestrano, has developed software-as-a-service services using LiDAR (Light Distance and Ranging) technology, which can significantly cut the cost of rail track inspections. It has already won contracts in Australia, the UK, Japan and North America, where the potential is enormous. Arden expects Cordel to move into profit in the year to June 2023. At 11.5p, that could put the shares on 16 times prospective earnings with potential to fall to three the following year. The forecasts could be optimistic, but there is no doubt that momentum is building up.”
Danni Hewson, equity analyst at AJ Bell
Danni is another newcomer for 2022, taking over from colleague Ryan Hughes who delivered a solid mid-table finish last time, and plumping for a FTSE 100 building materials group.
“There aren’t many certainties in the Covid era,” she says, “but President Biden’s infrastructure bill does give investors something tangible to hang their hats on and construction company CRH looks a pretty solid prospect. I’ve been told many times to judge the forward momentum of an economy by the amount of tarmac being laid. As the US is upping its spend on highways and bridges by 44% it should be a real boon for market leader CRH, which has an impressive order book, helped by a bolt-on acquisition strategy. While there are inflation headwinds and construction is a cyclical activity, on a long-term basis it should remain attractive for investors looking for a business with solid cash generation and impressive growth prospects.”
Dan Lane, senior analyst at Freetrade
Another making his debut, Dan is going for the FTSE 250-listed tabletop gaming star.
“Games Workshop had a cracking run over lockdown thanks to Warhammer fans clearly making the most of isolation to paint and assemble their armies. There could be a bit of a hurdle to that continuing next year though, and the share price already knows all about it,” says Dan.
“In the short term, the company needs to address the ire of fuming fans after efforts to protect its intellectual property by sending cease and desist letters to community members creating Warhammer fan fiction online resulted in a boycott. A foray into the digital space will be integral to keeping revenues high if supply chain issues stick around, while relationships with the likes of Sega and Frontier Developments could unlock even more value if the battle with fans remains only a skirmish and users stay with the company after the pandemic.”
Invesco China Equity – Accumulation shares (GBP)
Darius McDermott, managing director of FundCalibre
For a new pick for this year, says Darius, whose pick last year provided a gain of 14%, says his tip for this year is “contrarian again”, in the form of the Invesco China Equity open-ended fund.
“Having been the leading market in 2020, that very much reversed this year, and the Chinese stock market has massively underperformed. Regulatory interference from the government had hit a number of sectors but I think the sell-off has been overdone. The Chinese government doesn’t want to stop investment, it just wants to avoid anti-competitive practices and to avoid a bubble. This fund is run by a very strong and experienced team and is naturally underweight the mega-caps favouring under-researched opportunities further down the cap scale, it can now also invest in the very exciting A Share market.”
Invesco DB Agriculture Fund (NYSE:DBA)
Vince Stanzione, financial trader, trainer and author of The Millionaire Dropout
Vince, who came a strong second in the final 2021 table, is picking an exchange-traded fund for 2022. (And for those that cannot trade US listed ETFs, he suggests a similar one is WisdomTree Agriculture (LSE:AIGA).)
“The Invesco ETF is a basket of 11 agriculture commodities including coffee, corn, soybeans sugar, cocoa, live cattle and a small amount of cotton. (https://www.invesco.com/us/financial-products/etfs/holdings?audienceType=Investor&ticker=DBA) While agricultural commodities have bounced in 2021 they are still very depressed when you factor in inflation and food prices that I believe will continue to rise in 2022. Agriculture has various input costs including oil, fertilizers and labour, all of which are moving higher and yet to be seen in final crop prices. Whatever your views on climate change, we are seeing extreme weather around the globe, making farming and crop prices extremely volatile. DBA was up over 20% in the past year and I expect to see at least the same gains in 2022. Agriculture commodities are not tied to the stock market, so even if stocks are weak they can move higher, after all we still need to eat!”
John Kingham, investment writer and blogger at UK Dividend Stocks
John’s pick last year, Admiral was up 25% in August but endured a tough finish despite strong operational performance.
“My pick for 2022 is my largest personal holding,” he says. “The company has a uniquely integrated business model and a strong position in the global pension risk transfer market, and its track record of growth is not reflected in its low valuation and 6% dividend yield. Being known as a life insurer during a pandemic doesn’t help, but L&G is mostly a pensions business so the pandemic is expected to be a net tailwind.”
Andy Robinson, vlogger at Operation Crypto
Andy, another of our newcomers, has been vlogging about cryptocurrencies on his YouTube channel since 2017 as well as via various social media platforms.
“Recently Facebook has rebranded to Meta, in order to push forward with the future vision of the Metaverse,” explains Andy. “MetaHero is a cryptocurrency project I have been keeping a close eye on since its launch mid-2021, looking to be the gateway into the Metaverse. Through the use of ultra-HD photogrammetric scanning technology, Metahero and WDW (Wolf Digital World) have partnered to bring on the next 10mln new users to cryptocurrency. Gaming, fashion, medicine, NFTs, social media, VR/AR, and the Metaverse are all destinations of scanned people and real-world objects. With the rapid growth of Metaverse assets within the cryptocurrency industry I feel this project is the one that stands out from the rest, fundamentals and technicals are lined up and looks very interesting heading into 2022.”
Better known perhaps as @Conkers3 on Twitter, Pete’s tip last year delivered a 15% total return including dividends.
For 2022 he’s going for Micro Focus, which as he says, “is a former UK tech darling that has been undergoing indigestion and persistent reversal of fortunes since its 2017 $8.8bn (£6.6bn) badly timed and still-not-righted purchase of Hewlett Packard’s software division. Going forward the board and management either have to address their revenue declines by boosting its artificial intelligence, machine learning, SaaS, Cloud and Amazon Web Services revenues, or the company faces the risk of an opportunistic predator making a cheap takeover offer. Given the current share price is significantly discounted to the sum-of-the-parts intrinsic value, then those investors buying MCRO now at £3.375p could be rewarded handsomely, I think.”
Oliver Haill, UK news editor at Proactive Investors
Looking back at my electric cars ETF tip last year, which parked up with a mid-table 17% return, I have also recently been mulling my own ISA and SIPP portfolios. While the performance of the funds I own has been satisfactory, many of them were bought quite a few years ago and I’m no longer happy with some of their ethical and sustainability characteristics. However, most of the replacements will be long-term picks and if I want a top tip with the potential to top the table next year, I’m thinking a comeback stock could be one to go for.
“So, casting about for a steaming pile of profit warnings, I immediately think of Purplebricks. I’m sure there will be more pain to come, but I’m taking a punt that things improve operationally by this time next year and some verve returns to the bombed-out shares, which are down around 90% over the past four years and valued at less than half of annual sales.”
Peter Sleep, senior investment manager at 7 Investment Management
Peter’s tip for the past year was a big US name and it bagged him a third-place finish, but this year he is plumping for a London-listed investment trust.
“If the markets do well this pick will put me last in the list,” he says. “Ruffer, by design, try to put together a fund that will do well in extreme adverse events like last year’s COVID outbreak. It is done by holding a selection of index linked bonds, gold and derivatives. For instance, when the stock market fell apart in March 2020, RICA sailed serenely on. In 2020 RICA showed a very respectable return of 8% versus the FTSE All Share that dropped by nearly 17%. RICA adds real diversification and interest from one of the most differentiated management groups in London.”
Neil Wilson, chief market analyst at Markets.com
Last year, the impassioned Scot went for the FTSE 100 based on a big recovery coming, which in a sense is still, slowly, ongoing. “I was going to go for an obvious one,” Neil says, “but for fun I’m going to go with SARK ETF [Ed – the full title if want it is Tuttle Capital Short Innovation ETF) – the way to short Cathie Wood and her ARKK fund. Largely because I think Tesla has to massively derate sooner or later – shorting it has been a mug’s game but I’m calling time now and Tesla is a +8% holding in ARKK. Fed tightening next year should impair the fund and higher inflation and higher rates should mean these big long-growth disruptors are squeezed. Also I think it’s a good way for investors to hedge exposure to big momentum type tech if they cannot short.
“However, as this ETF may not be available to UK investors, I’d pick British Airways owner IAG on return to normal travel…ha!”
Chris Beauchamp, chief market analyst at IG
Chris has a good history in this competition, coming fourth last time, and this year the keen chorister is singing the praises of one of London’s biggest companies.
“The shares are still 23% down from their 2019 record highs, having been left out of the market rally this year. But 2022 still looks to be a better year for the global economy, and the solidly dependable nature of its business means it should still find a place in many portfolios,” he says. Pricing pressures have taken their toll, but a cooling of CPI increases next year should help ease the problems, while a continued rebound in global economic activity should lift consumer spending as well. A compelling monthly chart, where the uptrend remains intact, should provide an attraction for technical traders too as well as fundamental investors.”
Vanguard US Equity Index Fund – Accumulation units (GBP)
Maria Nedeva, business school professor and creator of The Money Principle site
“I am a great believer in investing in funds, and index funds specifically,” says Maria, another blogger we are welcoming to the list this year. Having flirted with value stock investing and found it “high maintenance”, Maria says she finds index fund investing doesn’t take over your life to anywhere near the same extent.
“During 2022, I would be investing mostly in two funds: Vanguard US Equity Index Fund [which will be her entry in the competition] and Blue Whale Capital Growth Fund. The Vanguard fund is one I have in my own portfolio and it has not finished a year at a loss since it was launched in 2009. It is low-cost and includes over 4,000 stocks diversified across sectors, self-renewing with companies that fail to meet the stringent inclusion conditions replaced. The Blue Whale fund was launched in 2017 and has since returned an annualised 20.8%. It is a low-cost managed fund including up to 27 shares at any time, which are diversified by location and sector, and meticulously researched.”
Dan ‘Wilderness’, operator of The Financial Wilderness blog
One more new addition is Dan, who first discovered the world of investments by entering a virtual stock picking competition, so he should be in comfortable territory.
His picks is one of three London-listed country-specific investment trusts focused on Vietnam, a frontier market whose economic growth has averaged 7% for the past six years. “Whilst the fund has seen substantial growth, Vietnam is increasing strategically building itself into the globalised economy with avoiding some of the issues that can occur in regions like China. It’s a nice mix of diversified investment within the trust and even offers a dividend as a bonus.”