5 Shares You Should Have Bought This Year

Many shares have defied a flat FTSE and all the economic worries.

We're half way into 2011 and the FTSE has dropped from 5,900 to 5,856 -- a loss of 1%. Not that the market has been flat all year of course.

Worries about Greece and euro-finances in general punctured the index in March and again in June, both times causing mini-corrections of about 8%.

If you now look at the FTSE's chart, you may even see a formation of a 'double top', which according to some traders is bearish for shares. But for the fundamental investors among you, the gilt-dividend signal has just flashed 'buy'. 

As always, there are two sides to every market.

So... can the index burst through 6,000 in the second-half of 2011... or has the post-crunch rally finally ran out of steam? Perhaps the market will flat-line for another six months. Don't be afraid of giving your prediction in the comment boxes below.

Of course, individual shares can register superior gains whatever the wider market is doing. Some lucky punters may have backed biotech Sareum (LSE: SAR), up 391% since the start of the year, or health website Fitbug (LSE: FITB), up 218%. But the flat FTSE generally kept a lid on outstanding performances -- just one member of the All-Share and 23 constituents of AIM doubled or more.

Five first-half winners that caught my eye

Here are five shares that have performed well so far this year. Rather than just select the largest winners of the first half, these five companies look to have something about them that may help build on their gains in the months and years ahead. 

Obviously a six-month time period is too short a space of time to measure genuine investing success, but shareholders in these five businesses won't be complaining!

Finding gear (at last)

Could 2011 finally be Torotrak's year? True, the specialist gearbox designer has tested the patience of long-standing investors as it racked up £43m of losses since 2000. But at least this 'blue sky' venture has shown resilience by surviving both the tech crash and banking collapse to see its shares recently hit a six-year high.

Tie-ups with Tata Motors, Volvo and Allison Transmissions, the firm's largest shareholder, have re-ignited this share during the last six months. Yet Torotrak still has a long way to go -- the last results saw sales of only £5m and a further loss. However, the dream of supplying parts to a mass-market manufacturer remains... and sustains today's £95m market cap.

Love this four-bagger

Cupid must surely be among the top-performing newcomers to the market in the last year or so. Floated exactly twelve months ago this week, this online dating agency has since seen its shares quadruple as the market continues its love-in with anything 'social media'.

Certainly Cupid's financial progress looks attractive. Sales at this business have gone from £1m to £26m in three years, with 2010 witnessing underlying UK turnover up 101% and overseas revenue growing to represent 42% of the top line. 

Right now a £187m market cap buys you forecast 2011 earnings of £7m -- equivalent to a premium P/E of 27. Well, nobody likes a cheap date!

Dining hat-trick

Could the Kaye family be looking at a hat-trick of winners in the restaurant sector? The people behind the success of ASK Central and Prezzo (LSE: PRZ) -- both ten-baggers for early investors -- currently have a 40%-ish stake in Tasty, which one day might replicate the success of those two earlier ventures.

Tasty itself started out serving dim sun a few years ago, but that format has since been put on ice and these days the firm concentrates on pizza. 

Tasty's £25m market cap gives you 14 restaurants that just about make a profit... while Prezzo has a £151m market cap, earnings of £10m and 160 sites. There lies the potential.

Buyback-ing property

You'd have thought a log-jammed property market would have been bad news for Rightmove. Not so. 

Shares in the housing website have gained this year as investors digested some wonderful 2010 figures -- sales up 26%, profits up 39% and underlying operating margins at an incredible 69%. Rightmove continues to register record visitors, too, despite the dearth of real-life buyers.

Should you invest at today's £1.2b market cap and trailing P/E of 33? Certainly Rightmove thinks its shares are worth acquiring. The company has been buying all this year up to £11, which looks a cavalier use of cash given the current rating... but the same could have been said last year when the buyback price averaged £7!

Chavtastic

Not every investment in the high street this year has been a disaster along the lines of HMV (LSE: HMV) or JJB Sports (LSE: JJB). In particular, Sports Direct has been a winner as the seller of cheapie tracksuits attracted greater custom in the penny-pinching climate. Recent sales gaining 10% and confirmation of a 28% profit improvement have all been reasons to cheer these shares on.

Hard to remember now, but it was only four years ago when Sports Direct upset the Square Mile with its limited reporting and a profit warning soon after its flotation. Back then you could easily pay a single-digit P/E... but how attitudes have changed. Now the a multiple of 14 supports a £1.3b market cap.

Your turn

So that's it for this half year. Five companies that defied the flat FTSE, all the euro-debt worries and the ongoing tricky economy -- confirming once again they'll always be winners whatever the wider markets are up to. 

If you've seen a share that's forged ahead during 2011, yet could still offer further upside, then let us know why in the comment box below!

More from Maynard Paton:

• My Favourite Emerging Market Share
• How I'll Invest This 72% Gain
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