I hold around 20 UK stocks in my self-invested personal pension (SIPP), but three stand head and shoulders above the rest.
Coincidentally, I bought all three in November 2023, and they’ve all hit the magic 100% mark in the Gain/Loss column of my online SIPP. What a month that was!
This is brilliant and I love ‘em but it does leave me facing a problem. They’ve all failed to kick on since hitting that milestone.
A secondary issue is that one of them is now worth almost 9% of my entire SIPP, so I’m heavily exposed to its fortunes.
3i Group flies
That stock is 3i Group (LSE: III). Shares in the FTSE 100-listed private equity manager have rocketed 357% in five years, and continue to fly, up 39% in 12 months.
Established in 1945, 3i has a brilliant track record of buying companies, building them up, pocketing dividends then selling them at a profit.
It has a huge success on its hands in discount retailer Action, which has grown so fast it now makes up more than 75% of 3i’s total £23.6bn portfolio.
Now I’m worried 3i may be a little too Action-packed. I’m not sure what its exit strategy is or whether it even wants one.
Another issue is that shares in the investment trust are trading at a massive 69% premium to their underlying net value.
I’m still sitting on a 97% gain, and common sense suggests I should at the very least reduce my exposure. Trouble is, it’s hard to kiss success goodbye.
Costain is cheaper
I’m a bit less concerned about the second double-my-money stock, construction specialist Costain Group.
Costain has also idled since hitting the 100% mark but still looks cheap, with a price-to-earnings (P/E) ratio of just 8.3.
There’s lots to like here. Its forward work position, a key industry measure, jumped £1.5bn to a record £5.4bn in 2024. The shares are up 44% in the last 12 months.
Construction can be a volatile sector, so that’s a concern. Also, our cash-strapped government may struggle to fund infrastructure development.
However, Costain looks solid, with net cash of £180m against a £330m market cap. With its forward work piling up, I’d rather buy more than sell.
Just Group stumbles
FTSE 250 insurer Just Group (LSE: JUST) has also been going gangbusters, up 42% over the last year.
However, the shares have fallen 12% in the last three months, after full-year results published on 7 March fell well short of estimates.
Adjusted pre-tax profit fell by 7.3% to reach £482m, mostly due to lower non-operating items. Underlying operating profit climbed 34% to £504m and group chief David Richardson remains upbeat.
He noted that the company had more than doubled profits in just three years, a process supposed to take five. Just still looks incredibly cheap with a P/E of just 4.1. The trailing yield is a low 1.68%, but the dividend policy is progressive, with a 20% hike in 2024.
I bought for the long-term, and since I hold a modest stake, I’m not selling. I might even take advantage of the recent dip. Providing I can bring myself to trim my position in 3i.
