Here's a small-cap, mid-cap and large-cap to buy now.
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The shares in question are currently on my Champion Shares 'buy list'. As you may already know, my Champion Shares selections beat the FTSE All-Share during 2005 and 2006 and I believe I can extend that record into 2007. I'm hoping the shares on my buy list will lead the way to another successful year.
To give you a taste of my Champion Shares recommendations, here's a brief summary of a small-cap, mid-cap and large-cap currently on my buy list:
Tip for 2007 No 1 (first recommended in October 2005)
I'd describe this share as a well-managed small-cap. The long-time boss enjoys a sizeable shareholding and in the past decade has delivered a decent dividend record and harboured a cash-rich balance sheet. I've been pleased with this firm's progress since my original recommendation -- recent results highlighted profits up 30%.
The main drawback here is probably a dependence on the stock market. During the last bear phase, earnings almost disappeared and the share price was hit particularly hard. But I believe the current bull-run has further to go and reckon this company's track record and sub-market P/E support a long-term investment.
Tip for 2007 No 2 (first recommended in November 2005)
I believe this share is a quality mid-cap. It appears to enjoy a leading position in its markets and, in my view, earns very good margins and generates plenty of cash. But despite a respectable track record and a proven leadership team, trading throughout 2006 was not brilliant and the firm's outlook for 2007 is not the best either.
For the patient, though, I reckon this share could be a decent long-term bet. Recent acquisitions, further cost cutting and any upturn in what is a cyclical industry could all help improve earnings beyond 2007 and may spark a P/E re-rating.
Tip for 2007 No 3 (first recommended in October 2006)
This share is a large-cap that is not listed on the London market. Don't worry though -- the company is a very famous name and its shares can be bought easily through the stock exchange's International Retail Service.
In my opinion, this global business enjoys an industry-leading position, decent sales growth potential and net cash in the bank. But the industry is dynamic and this business has at times lost out to rivals in the past. Recent results were a little below market expectations with margins coming under pressure, though I'm confident this business can progress over the long haul.
What now?
Though I cannot offer any promises, I hope these three shares will be among the big winners of 2007. But I could be wrong and, as with any stock-market investment, they could lose you money over time.
Once you've joined the Champion Shares community through this 30-day free trial, this member-only page will reveal the above trio of tips -- and all my other recommendations -- in full.
Of course, Fools currently enjoying the Champion Shares service will receive new recommendations throughout 2007. Next year's first tip is due to be published on Wednesday, January 10th. For a limited time only, new members can enjoy a year of Champion Shares tips for just £99 -- a 33% discount on the standard price.
An earlier version of this article was published on December 23rd, 2006.
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.
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