MARKET COMMENT
The Star Performers Of 2003

By Stuart Watson (TMFTiger)
December 22, 2003

Despite its nervy start, 2003 is set to be a bumper year for the stock market. The FTSE All-Share index is currently up around 18%, including dividends, which is significantly higher than the 11% average that the UK market has returned since 1918.

Not surprisingly, some shares have been outstanding performers this year. In 2002, just thirteen out of the roughly seven hundred companies in the FTSE All-Share produced a gain of 50% or more. In 2003, 174 companies managed this feat, with twenty producing gains in excess of 200%!

FTSE All-Share scorecard for 2003
Share price change	Number of companies
> +100%	58
+50% to 100%	116
+20% to +50%	254
0% to +20%	180
-20% to 0%	61
-50% to -20%	17
< -50%	3

Before we look at the top ten of 2003, a couple of honourable mentions. It was another good year for Lastminute.com (LSE: LMC). Despite its slide in the last few weeks, it still returned a gain of 120%. It topped last year's list, with an increase of 244%. Cable & Wireless (LSE: CW.) was the highest-placed FTSE 100 entry, posting an increase of 201%. Here are the top ten, in ascending order:

10. Torotrak (LSE: TRK), +305%

The developer of the Infinitely Variable Transmission system was one of many 'blue sky' technology shares to return to favour in 2003. Although its shares are still far below their peak price, it's been a good year for those punters who just shut their eyes and used the Force.

9. Filtronic (LSE: FTC), +352%

Despite a second year of falling sales, the semiconductor company ended its run of losses, even returning a small profit.

8. WS Atkins (LSE: ATK), +375%

This outsourcing group produced one of the worst profit warnings of last year, when its shares collapsed by more than 70% in one day.

7. WSP Group (LSE: WSH), +376%

The property consultancy firm had a bit of a nightmare in the second half of last year, but swift management action saw a return to form this year.

6. Alizyme (LSE: AZM), +410%

The developer of obesity drugs saw a number of positive developments in 2003. In the seven years since its flotation, it has yet to produce any revenues, but is still valued at £250m.

5. Gresham Computing (LSE: GHT), +445%

Shares in this software developer rose six-fold in the second quarter of this year. This was after Real Time Nostro, a system developed in conjunction with Cable & Wireless, got the nod from four clearing banks.

4. Datamonitor (LSE: DTM), +453%

Falling sales caused havoc with the shares of this market-research firm in the latter half of 2002. But, as with many companies in our list, it saw a return to profitability this year.

3. Amstrad (LSE: AMT), +461%

Alan Sugar proved the doubters wrong yet again. Sales of Amstrad's e-m@iler system helped boost sales, causing the electronics company to move back into the black.

2. Photo-Me Int'l (LSE: PHTM), +497%

Ever since an accounting discrepancy was uncovered back in 2000, the photo-booth manufacturer has struggled. Improved trading this year should see it return to the dividend list. Its shares didn't do too badly either.

1. Trafficmaster (LSE: TFC), +500%

One of the most popular tech shares of the bubble days, Trafficmaster is also 2003's top performer. The traffic-information company has seen its SmartNav system gain acceptance from a number of leading car manufacturers.

However, to illustrate the dangers of tech investing, it's worth noting that while Trafficmaster has done well, rival Minorplanet Systems (LSE: MPS) was the second-worst performer of the year, with a loss of 70%. The booby prize for 2003 goes to Goshawk Insurance (LSE: GOS), with a fall of 73.5%. (Note that a few companies have done even worse than this, but are in liquidation or are no longer listed.)

More: Top Ten Profit Warnings Of 2003.