QUALIPORT
Introducing Champion Shares

By Maynard Paton (TMFMayn)
September 14, 2005

Goodbye Qualiport, hello Champion Shares!

Champion Shares is the exciting new share recommendation service from The Motley Fool! 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 will be written by me, Maynard Paton;
* Champion Shares members will 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 and costs £149 per annum thereafter.

Let me explain more about Champion Shares and its recommendations.

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 want 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 should offer Champion Shares members enough variety and flexibility without having to compromise on quality.

Now, if I promise at least one Champion Shares recommendation a month, what happens if I can't find anything? Sure, it could be a problem. But in my favour, 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!

In fact, I'm focused 100% on finding (and monitoring) great market opportunities for Champion Shares members. So I may very well provide additional 'ad-hoc' recommendations from time to time. And with Champion Shares developed deliberately as an electronic-only service, you'll get to hear about these opportunities with minimum delay!

The recommendations

My recommendations for Champion Shares will fall into five broad categories:

1. Quality Leaders
Quality Leaders are essentially Qualiport-type companies. They lead their industries and enjoy 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. Read more.

Obviously the best starting place to outline the possible returns from Quality Leaders is the Qualiport itself. This is how the current constituents have performed following my purchases:

Share	Date of purchases	Average gain (%)
Johnston Press (LSE: JPR)	Sep 2001 (x2)/May 2002	+87
London Stock Exchange (LSE: LSE)	Dec 2002/Nov 2003/Oct 2004	+74
Emap (LSE: EMA)	Sep 2001 (x2)	+51
Halma (LSE: HLMA)	Mar 2003	+39
Associated British Ports (LSE: ABP)	Jun 2004	+19

(All figures exclude dividends)

According to these calculations, the Qualiport outran the FTSE All-Share by 18% during my stewardship of the portfolio. I still intend to keep close tabs on the shares held by the Qualiport and on the portfolio's watch list. But from now on, only Champion Shares members will be able to discover when I recommend a purchase or sale.

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. Read more.

Good examples of Buried Treasures are the following four companies, all of which I recommended in the Fool's Value Investor newsletter:

Share	Recommended	Gain (%)
FW Thorpe (LSE: TFW)	April 2004	+43
Lincat (LSE: LCT)	December 2004	+27
S & U (LSE: SUS)	August 2004	+15
T Clarke (LSE: CTO)	June 2004	+41

(Extracted from the Value Investor scorecard, dated 1 Sept 05. All figures include dividends. Average gain from all Value Investor recommendations: 10%)

From now on, only Champion Shares members will be able to benefit from my Buried Treasure recommendations!

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. Read more.

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 last year. Despite a price to earnings (P/E) ratio of nearly 60 at the time, the stock has since tripled.

In fact, back in April 2003 -- right at the start of the current bull run -- I highlighted eight growth companies trading on reasonable valuations. This is how they've performed since:

Share	Price then (p)	Recent price (p)	Gain (%)
Capita (LSE CPI)	251	372.5	+48
Reliance Security (LSE: RSG)	525	540	+3
Galen	415	862**	+108
HIT Entertainment	192	300**	+57
Bloomsbury Publishing (LSE: BMY)	185*	362.5	+96
Majestic Wine (LSE: MJW)	123*	273.5	+122
SCS Upholstery (LSE: SUY)	196	343.75	+75
Domino's Pizza (LSE: DOM)	100	320.5	+221

(*Adjusted for share splits **Acquired. All figures exclude dividends)

The Internet, 3G, microchips, software and healthcare are just some of the rapidly growing areas I'm investigating for Champion Shares members. In addition, I'm increasingly finding new issues as a fertile hunting ground for ground-floor opportunities in promising, fledgling sectors.

4. Recovery Plays
I see Recovery Plays as companies undergoing corporate traumas, but their size, status and/or track record suggest they 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. Read more.

A textbook example of a Recovery Play is Royal Dutch Shell (LSE: RDSB). I highlighted the oil giant as 'good value' when its troubles emerged early last year. Since then, the shares have rallied from an adjusted 1,297p to around 1,837p, a gain of 42% excluding dividends. 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.

A good example I think of a Special Situation is Stanley Gibbons (LSE: SGI). Back in July 2003, I discovered the stamp dealer was worth about the same as its balance sheet, which essentially meant the famous brand, reputation and earnings capacity were in for free. There was no illustrious record to rely on, but the market for stamps was booming and 'gut feel' suggested the shares would do well. They've since approached four-bagger territory.

What now?

Obviously my past performance is no guarantee of future success. But certainly the Qualiport's outperformance in the last 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.

The Champion Shares website contains much more information about the service. In addition, new members can enjoy a free 30-day trial. If you do join but then think Champion Shares is not for you, you can cancel your trial within 30 days and you will not pay a penny.

I look forward to welcoming you as a Champion Shares member -- and helping you become a stock-market winner!

> Click here to go to the Champion Shares website.

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

Final portfolio value

Holding	Number of shares	Closing price 12/09/05 (p)	Value (£)
Associated British Ports	681	494.25	3,365.84
Emap	372	842	3,132.24
Halma	1,920	155	2,976.00
Johnston Press	1,608	503	8,088.24
London Stock Exchange	2,018	586.5	11,835.57
Cash			584.40
Total			29,982.29