The FTSE 100 rose another 3% in November, but these five shares did much better.
After October's reverse, it was all systems go again for the market in November, with the FTSE 100 hitting a new yearly high of 5,383 mid-way through the month. Jitters over Dubai's debt saw it come off that high, including losing 3.2% on one day last week, the index's biggest daily fall since the end of March.
However, to put things in some perspective, the leading index is up precisely 50% from its March 2009 lows, a truly stunning performance.
As to what's next for this market, who knows? Will it surge even higher from here, breaking through 5,500 by year end, or will it slump back below 5,000 and ruin our Christmas dinners? Answers in the comments box below, please…
Anyway, as ever, there were some bright shining lights. If you'd bought these five shares at the beginning of November, you'd be feeling rather pleased with yourself.
I generally try to highlight companies of interest rather than necessarily the biggest risers on the month, with hopefully one or two of these companies set for an exciting future.
The shares you should have bought
Obviously a one-month time period is too short a space of time to measure investing success. Share price gains could be due much more to luck than to good management. But whatever the reason, investors in those five companies won't be complaining!
Why such juicy gains?
So why did the companies listed above move so much in just a one-month period?
It has been an eventful month for real estate group Minerva, with its shares jumping 54% to 55.5p largely on the back of a 50p per share cash bid for the company by South African Nathan Kirsh's KiFin.
KiFin already own 29.9% of Minerva, and their offer was a 30% premium to the prevailing share price, and also valued Minerva at a small premium to its stated net asset value as at June 2009. Still, the board of Minerva weren't impressed, saying the "offer represents an opportunistic and unwelcome attempt to acquire Minerva at a price which significantly undervalues the Company and its future prospects."
The shares trade above the cash offer, indicating the market thinks a higher bid may be in the offing. Minerva has recently renegotiated its banking facilities, giving it a little more flexibility as it works through this property downturn. You can't help but think the bid is opportunistic, but yet Minerva have much to do in the coming years to prove Mr Kirsh wrong. It should be an interesting ride.
Battery power
Backup battery manufacturer China Shoto has been one of those companies that always looks cheap, especially compared to its growth rate. Perhaps it has something to do with it being a Chinese company. Perhaps it has something to do with CEO Mr S Yang owning 47% of the company. Or perhaps it has something to do with falling profit margins and a sharply slowing growth rate.
Whatever it is, November was a good month for China Shoto shareholders, with the share price jumping 59%. Chris Menon here at The Motley Fool highlighted the company at the end of October, saying at 210p, "it certainly seems an attractive prospect…" With the shares now at 329p, investors who followed this advice will be well chuffed.
If…
Like many other commodity companies, Ukrainian iron ore pellet miner and manufacturer Ferrexpo has been on a tear, with its shares jumping 35% to 200p. Doing the trick was its interim management statement where it said it was producing at full capacity, and saw strengthened demand in its core markets.
As for the future, I'd suggest an investment in Ferrexpo is somewhat akin to having a stab in the dark. If steel prices stay high, if the global economy continues its recovery, if inflation takes off, and if there is political stability in the Ukraine, there might be further strong gains ahead. Do you feel lucky?
A rare and welcome trading statement
Small pharmaceutical entity Alliance Pharma surprised the market in November by announcing they expect profit for 2009 to significantly exceed previous expectations. In these recessionary days, such statements are incredibly rare, and the shares deservedly jumped 31% in the month of November.
The shares trade on a forward P/E of around 9, making them appear cheap. It does have a fair lump of debt, but Nigel Wray owns over 11% of the company. Alliance Pharma might be one to keep an eye on for the future.
A fast growing retailer
Dunelm is a rare beast. Like Alliance Pharma, it too recently said it will achieve a full-year result ahead of previous expectations. The specialist homewares retailer announced like-for-like sales have risen an amazing 15.1% in the first 17 weeks of their financial year.
Dunelm's value range is obviously a massive hit with cash-strapped, bargain-hunting consumers. Unfortunately the shares aren't similarly in the bargain bin, deservedly trading at a premium forward P/E of 16. If there is a market wobble in the coming months, this is certainly one company you might want to pick up in any 20% off sale.
Finding the shares that might take off next
What does all this prove? Two things…
1) Share prices can take off, sometimes unexpectedly, at unexpected times, and by surprisingly large percentages. Even though November wasn't a great month for the wider market, some good gains were still made.
2) Patience is required. Some of the companies mentioned above have seen their share prices absolutely hammered from their 2007 and 2008 peaks. But all need not be lost. Just because a company has lost 60% or 70% of its value, doesn't mean it can't rise from the ashes and enrich investors who were brave and skilful enough to buy when all about them were panic selling.
More on the economy and the markets:
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> Bruce Jackson doesn't have an interest in any of the companies mentioned in this article.
