COMMENT
The Shares You Should Have Bought This Year

By David Kuo (TMFDragon)
December 16, 2005

"Hindsight is always 20/20" ~ Billy Wilder

It's that time of year again when we can reflect quietly on what might have been if only we had bought the right shares (here are our lists for 2002, 2003 and 2004). For instance, your portfolio could be considerably healthier if you had foreseen the astounding rise in oil prices. In fact, three of the top one dozen risers in the stock market this year are oil explorers. Additionally, a host of other drillers that include JKX Oil (LSE: JKX), Burren Energy (LSE: BUR) and SOCO International (LSE: SIA) are bubbling just below.

So here then are the top twelve best performers from the FTSE All-Share Index and the Alternative Investment Market with market values above £100m.

Pos.	Company	Gain This Year
1.	Crosby Capital (LSE: CSB)	+302%
2.	Stanelco (LSE: SEO)	+202%
3.	Nautical Petroleum (LSE: NPE)	+194%
4.	Elementis (LSE: ELM)	+181%
5.	BTG (LSE: BGC)	+162%
6.	Autonomy (LSE: AU.)	+155%
7.	Equator Exploration (LSE: EEL)	+149%
8.	SCi Entertainment (LSE: SEG)	+138%
9.	Dana Petroleum (LSE: DNX)	+131%
10.	Ashtead Group (LSE: AHT)	+130%
11.	Entertainment Rights (LSE: ERT)	+127%
12.	CSR (LSE: CSR)	+122%

Four-bagger Crosby Capital with its dual headquarters in London and Hong Kong tops the table with a 302% rise this year. The merchant bank, which has invested heavily in oil and gas assets in the Middle East and Pakistan, has seen its portfolio significantly enhanced by record-high energy prices.

North Sea oil explorers Nautical Petroleum and Dana Petroleum have benefited from higher crude prices too. Meanwhile, Equator Exploration, which only joined the market in December 2004, has just started drilling for oil in Nigeria.

While oil has been a boon for oil explorers, the long-awaited recovery in chromium has been advantageous for Elementis. Earlier this year, the company said it increased prices by as much as 20% due to tight oxide supplies. The price hike is expected to bolster annual profits.

Demand for eco-friendly packaging materials has helped Stanelco bound into second place on our list. Stanelco, which makes the environmentally beneficial FrogPack wrapping, has recently linked up with McDonald's supplier Perseco to develop innovative packaging.

It's been a roller-coaster year for BTG, which finds, develops and commercialises new discoveries. From a low of 81p, its shares have rallied over 160% thanks to positive clinical trials from a clutch of development drugs. These include medicines to treat varicose veins and diabetes. Autonomy has perked up considerably too, thanks to a strengthening of the software market.

SCi Entertainment's dramatic rise this year is due in part to a bid from a mystery suitor, and Ashtead's impressive performance can be pinned down to a continuing recovery of its finances. Elsewhere, global demand for Postman Pat has lifted Entertainment Rights, while CSR has soared on demand for its Bluetooth products.

So which shares should you buy for 2006? We can't tell you for certain of course but we've rounded up ten that we think look promising in this month's issue of Champion Shares. Sign up here for our free trial to find out what they are.