Take A Look At Champion Shares

Champion Shares has a simple mission: to help you become a stock-market winner!

Champion Shares is The Motley Fool's share-tipping service. Its mission is simple: to help you become a stock-market winner! Champion Shares will tell you which shares to buy, why you should buy them.and when to sell them.

Here are the key points:

* Champion Shares is written by me, Maynard Paton;
* Champion Shares members receive at least twelve top share recommendations a year;
* Champion Shares is an electronic-only service, and;
* Champion Shares offers a free 30-day trial.

Let me explain more about Champion Shares.

Who am I?

I've been investing in the stock market since the mid-90s and my first writing experience was with the respected investment magazine, Analyst. I joined The Fool in 1999 and have written regular articles for the site ever since. I became sole manager of our old educational portfolio, the Qualiport, in 2001 and then launched Champion Shares in 2005.

At least twelve recommendations a year

From my experience managing the Qualiport , I believe what counts with any stock-market service is the quality and consistency of the recommendations. The way I see it, the greater the number of shares recommended, the greater the chance of producing an average (or worse) performance.

For Champion Shares, I aim to recommend only the very best investment opportunities, where I feel the odds are stacked heavily in your favour. I reckon 'at least twelve' recommendations a year offer Champion Shares members enough variety and flexibility without having to compromise on quality.

I also provide additional "ad hoc" recommendations from time to time. And with Champion Shares developed deliberately as an electronic-only service, subscribers get to hear about these opportunities with minimum delay!

What's more, I've purposely not tied Champion Shares down to one particular style of investing or one particular area of the stock market.

Basically, anything goes. Any company. Any size. Any sector. With every share fair game, I should never be stuck for good ideas!

The recommendations

My recommendations for Champion Shares fall into five broad categories:

1. Quality Leaders

Quality Leaders lead their industries and enjoy what I consider to be sustainable competitive advantages. They are simple to understand and generally enjoy predictable revenues and pricing power over customers. They also boast prodigious cash generation and are run by careful management.

When I ran the Qualiport, I only invested in Quality Leaders. These were the five constituents
of the Qualiport when we shut the portfolio down in September 2005:

* As at September 5, 2005. All figures exclude dividends.

According to my calculations, the Qualiport outran the FTSE All-Share by 18% during my stewardship of the portfolio. So I know that Quality Leaders can be great stock market performers.

2. Buried Treasures

I define Buried Treasures as small and sometimes obscure companies that have carved out a sound long-term record, often in a mundane sector. They are not industry kingpins and rely largely on talented management to progress. They also operate with conservative accounts and usually have high boardroom shareholdings.

Last November I tipped stockbroker Charles Stanley (LSE: CAY) as a Buried Treasure investment. The company had three attractive characteristics:

• it was small
  
  
• it seemed undervalued by the market
  
  
• it was led by a dedicated boss

Given those characteristics, I'm not surprised that the share has delivered solid gains since then.

3. Fast Growers

I classify Fast Growers as firms that are set to enjoy rapid earnings growth over the next few years. They are usually young companies that have short but successful track records. They mostly operate in 'emerging' industries where the long-term winners may not become apparent for some time. A number will be recent flotations and few will pay a dividend.

Whisper it, but growth companies could be making a comeback. Perhaps the archetypal Fast Grower at present is Google (LSE: GOOG) . As this article demonstrates, the search engine's stock was a bargain when it floated in 2004. Despite a price to earnings (P/E) ratio of nearly 60 at the time, the stock tripled over the next year.

My most successful Fast Grower pick so far has been Goals Soccer Centres (LSE: GOAL) . Goals operates five-a-side football centres where you can play a game of footie on high-quality pitches and relax in a nice bar afterwards. I saw Goals as a classic "roll-out" opportunity as the company expanded and opened more centres across the UK.

I've recommended several other growth shares for Champion Shares including a promising young technology business and a TV production company which made one of the most popular TV dramas of recent years. None of my other Fast Grower picks have performed as well as Goals, but I think they all have the potential to be medium-term winners.

4. Recovery Plays

I see Recovery Plays as companies undergoing corporate traumas, but their size, status and/or track record suggest they have a good chance of reviving. A scrapped dividend and/or losses may be involved, as well as fresh management perhaps to help spearhead the turnaround.

A textbook example of a Recovery Play is Royal DutchShell (LSE: RDSB) . I highlighted the oil giant as 'good value' when its troubles emerged early in 2004, and the shares have rallied well since then. As I saw it, Shell's 'safe haven' reputation had taken a knock, but it was still a major global player and oil was still a good long-term industry bet.

5. Special Situations

Special Situations are simply shares that do not fall into any of the above categories. Possibilities include cheap cash cows, takeover possibilities, short-term value plays and arbitrage situations. Special Situations may also include exchange-traded funds and investment trusts.

What now?

Obviously my past performance is no guarantee of future success. But certainly the Qualiport's outperformance in its few years -- it beat the market in 2001, 2002, 2003 and 2004 -- shows I'm experienced in recommending shares in an open and fully accountable manner.

When I've picked companies for Champion Shares, I've focused on shares that I believe will out-perform the market over the intended holding period of two to five years. Given my track record with the Qualiport, I'm pretty confident that Champion Shares will out-perform in time.

What's more, Champion Shares subscribers don't just receive a monthly tip. I write frequent commentary on my past picks in a twice-monthly update. I also publish research on interesting companies that may become Champion Shares picks in the future.

And on top of all that, there's a monthly webchat where you can ask me for my latest views on whatever interests you.

The Champion Shares website contains much more information about the service. In addition, new members can enjoy a free30-day trial. I look forward to welcoming you as a Champion Shares member.

Maynard owns shares in Associated British Ports, Halma, Johnston Press and London Stock Exchange.

Risk Warning

You run the risk of losing money when investing in shares. Prices may change quickly, they may go down as well as up and you may not get back the full amount invested. You should not invest using money you cannot afford to lose. We have taken all reasonable care to ensure that all statements of fact and opinion contained in this publication are fair and accurate in all material aspects. Investors should seek appropriate professional advice from their stockbroker or other adviser if any points are unclear. Champion Shares gives general advice only, and the investments mentioned may not necessarily be suitable for any individual.

For all subscription queries please e-mail The Motley Fool at ChampionShares@Fool.co.uk . Alternatively you can call us on 0845 226 3237.

Authorised by The Mchattie Group, St Brandon's House, 29 Great George Street, Bristol BS1 5QT. Tel: 01179 200 070 | Fax: 01179 200 071 | E-mail: enquiries@mchattie.co.uk