MARKET COMMENT
The Star Performers Of 2002

By Stuart Watson (TMFTiger)
December 23, 2002

For most investors, it's been a toasty 2002. Back in July, we ran a poll asking how your portfolio had fared and only 6% of those who voted claimed to be up at that stage. With the UK market at roughly the same level as it was six months ago it's reasonable to assume not much has changed.

However, some shares have made headway in the past twelve months. Of the all the members of the FTSE All-Share throughout 2002 (currently it has some 700 companies), around one-fifth of them registered an increase in their share price.

Here's a breakdown of the winners.

Increase     No. of companies
<5% gain            46
5-10%               23
10%-20%             38
20%-30%             13
30%-50%             15
>50%                13

So it was a case of lucky thirteen. Blessed with the gift of perfect foresight you would have had the following shares in your portfolio on January 1, 2002.

13. Dixon Motors (LSE: DXM) +54%
The motor dealer was bought by a subsidiary of Royal Bank of Scotland (LSE: RBOS) in April of this year.

12. Enterprise Oil (LSE: ETP) +55%
Enterprise Oil is the first of four oil companies in this countdown. It also got taken over, in this case by the oil behemoth Shell (LSE: SHEL)(NYSE: SC).

11. Telecom Plus (LSE: TEP) +56%
The 'multi-service utility company' has continued to see its profits increase after its share price was hit by sector woes last year.

10. Robert Wiseman Diaries (LSE: RWD) +57%
The Scottish dairy company has fought back well since its profits growth stalled in 2000 and 2001. It hopes to sell 1b litres of milk this year. That's a lot of corn flakes.

9. Arcadia (LSE: AG.) +60%
The clothing retailer succumbed to a 408p per share cash bid from Philip Green this summer. This completed a remarkable comeback from a dramatic slump in its share price and record low of 38p in October 2000.

8. Stanley Leisure (LSE: SLY) +64%
Always bet on the bookie. The casino operator and bookmaker is another company to see its profits growth resume this year.

7. Brake Brothers (LSE: BKB) +66%
The catering supplier called it a day in 2002. The Brake family, who owned some 60% of the shares, secured 825p per share in cash, which was 20% below the share's all-time high posted in June 1998.

6. Paladin Resources (LSE: PLR) +68%
The second oil company in our list. Paladin was one of many small oil companies to tweak investors' interest in 2002. Paladin made nine acquisitions this year, including a £100m purchase from BP (LSE: BP.)(NYSE: BP) and Amerada Hess earlier this month. Fairly impressive for a company valued at less than £200m itself.

5. Premier Oil (LSE: PMO) +72%
Premier's gain has mostly come since September when it bought out two of its major shareholders, who owned 25% of its shares, by giving them stakes in some of its oil fields.

4. McBride (LSE: MCB) +76%
The household products company is another recovery story. It called off takeover talks last November because the price discussed was not satisfactory. The shares are still one-third of the peak hit in 1998 though.

3. Brown & Jackson (LSE: BRJK) +108%
The discount retailer has trimmed its range of outlets so that it can concentrate on its core Poundstretcher chain. It has also appointed a new boss in Angus Monro, the former CEO of Matalan (LSE: MTN).

2. Soco International (LSE: SIA) +136%
A discussion board favourite here at the Fool and the best performing of the four oil companies in our list. Like Premier, nearly all of its annual gain has been recorded in the last three months and that earned the company a place in the FTSE 250 in the latest reshuffle announced earlier this month.

1. Lastminute.com (LSE: LMC) +244%
The sole 'technology' company in our list and also the winner by a considerable margin. The shares hit a low of 19p last October but now trade at over £1. Profitability is within sight and the company has been able to use the money raised in its infamous flotation (at 380p) back in March 2000 to buy up smaller rivals.

Which companies will do best in 2003? It's safe to say they are probably the ones you'd least suspect. Perhaps a few more technology companies will turn the corner and start to deliver profits? But don't get too excited. The odds of picking the above portfolio from the FTSE All-Share were rather slim to say the least. If I've got my sums right, it was approximately 1,400 billion billion to one.

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