These names have helped the Fool's Champion Shares service outrun the market.
It seems we're all investing geniuses now. Since the FTSE 100 tumbled to nearly 3,500 in early March, shares everywhere have been on a tear. Just look at the following table:
And that's just the top ten performers in the FTSE All-Share. Another 82 names in the wider index -- plus an amazing 175 on AIM! -- have doubled or more during the past five months. I bet you wish you'd piled in back then.
What have I tipped?
Sadly I didn't buy any of the top multi-baggers, but during early March I did stress to my Champion Shares members that "I'm seeing plenty of quality businesses marked down right now". At the time I re-tipped fund managers Ashmore (LSE: ASHM) and City of London Investment (LSE: CLIG), and spread-bet specialist IG Group (LSE: IGG), for the service.
Here are the relevant entries from yesterday's Champion Shares scorecard:
| Tipped | Share | Buy price** | Latest price** | Dividends** | Gain** | FTSE All-Share change** |
|---|
| 11-Mar-09 | Ashmore | 119p | 239.5p | 3.7p | +104.3% | +30.5% |
| 11-Mar-09 | City of London Inv | 124p | 220p | 0.0p | +77.4% | +30.5% |
| 11-Mar-09 | IG Group | 183.25p | 324.4p | 0.0p | +77.0% | +30.5% |
Sure, I missed out on those Pendragon-type returns. But I was looking to limit the downside, having no idea whether, say, Barclays would go the way of Northern Rock or, say, Topps Tiles would be another Woolworths. So I told Champion Shares members:
"Cash-strong balance sheets and shareholder-aligned leaders prompted these re-tips. I doubt we'll be troubled by government bailouts, emergency rights issues or pension rows here. Furthermore, [the re-tipped] shares seem very depressed and -- with their finances generally tied to the health of the markets -- could recover earlier than the wider economy."
The latest scorecard
Anyway, those March re-tips have supported the overall Champion Shares scorecard:
| Date | Average Champion Shares tip** | FTSE All-Share** |
|---|
| 11 August 2009 | +3.8% | -2.7% |
However, I must point out some of my earlier recommendations have played just as significant a part in the overall performance. While it's easy to make a profit in a bull run, I think it takes more skill to make money -- or at least not lose too much! -- during a bear phase. In particular, I'm pleased how these tips have progressed over time:
| Tipped | Share | Buy price** | Latest price** | Dividends** | Gain** | FTSE All-Share change** |
|---|
| 14-Jun-06 | Microsoft (Nasdaq: MSFT) | 1,181p | 1,402p | 73.7p | +25.0% | -3.9% |
| 10-Oct-07 | FW Thorpe (LSE: TFW) | 556p | 540p | 20.1p | +0.7% | -24.3% |
| 23-Apr-08 | Charles Stanley (LSE: CAY) | 219.75p | 240p | 15.3p | +16.2% | -18.3% |
Once again, common features of these three tips included cash-flush accounts, shareholder-pro bosses and modest valuations.
Of course not every Champion Shares selection has been a success. Like most people I guess, I have backed my fair share of crunch casualties. I still have nightmares about these entries on the Champion Shares scorecard:
| Tipped | Share | Buy price** | Sold price** | Dividends** | Loss** | FTSE All-Share change** |
|---|
| 09-Nov-05 | Johnston Press | 472p | 115.25p | 24.9p | -70.3% | +25.9% |
| 08-Feb-06 | Jarvis (LSE: JRVS) | 86p | 19.25p | 0.0p | -77.6% | +17.3% |
| 08-Aug-07 | CSR (LSE: CSR) | 695p | 202p | 0.0p | -70.9% | -32.0% |
I should point out that any of my existing tips -- including the ones named in this article -- may eventually be removed from Champion Shares at a loss as well.
Good companies, cheap prices
All told, I'll continue to use a simple, fundamental approach to find potential winners for Champion Shares -- whether the FTSE is heading for 5,000 and beyond or back to 3,500. In my experience, taking a business-focused perspective and backing companies that sport cash-strong balance sheets, owner-orientated managers and modest valuations remains the mostly likely route to prolonged investment success.
While I'd like to think my approach keeps me clear of possible trouble areas, I admit I could miss out on further multi-baggers. Still, I'm confident my slow-but-sure investment style could help rebuild your portfolio after last year's turmoil. I'd encourage you to read this introduction to Champion Shares and learn all about my recommendations through this one-month free trial. My latest tip is published tonight.
* Returns are based on mid prices between 3 March 2009 and 11 August 2009, and exclude dividends and costs.
** Champion Shares returns are based on mid prices taken on publication of the 'buy' advice and include due dividends but exclude costs. FTSE All-Share returns are based on the FTSE All-Share total return index, which includes re-invested dividends and excludes costs, and taken on publication of the 'buy' advice. Returns include all current and 'sold' recommendations, and are calculated using closing prices on 11th August 2009 or at the time of the 'sell' advice.
For all Champion Shares subscription enquiries please e-mail ChampionShares@Fool.co.uk or call 0845 226 3237.
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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