2016 Recommendations Review
2016 will long be remembered…..
It is one of those tumultuous years, reminiscent of 2008 in its trials and tribulations. It will be remembered for political upheaval, the “Brexit” vote, the arrival of Theresa May as PM and the election of the maverick Donald Trump as POTUS. 2016 began with worries about the Chinese slowdown and Fed rate hikes. Those were quickly eclipsed. It ended with a vast array of new challenges and concerns.
2016 proved the old adage that “equity markets climb a wall of worry”. This was made possible in 2016 by “Brexit”’s toxic effect on sterling’s external value. The pound devalued, dropping to 31 year lows v the USD and six months on, after a few failed rallies, sterling remains very depressed. Will 2017 see the pound recover? In our view, overseas investors remain very concerned over the UK/EU relationship, a factor likely to weigh on sterling.
Global equity market valuations are stretched. The US zero interest rate policy “ZIRP” is ending, a factor likely to increase bond yields, encourage a higher USD and repatriation of overseas funds back to the USA. Tighter monetary conditions will arrive in the UK in due course possibly during H2 2017.
How did our recommendations do?
| Security | Date | Rec. | Entry Price | Target / Hit Target | Gain/ Loss (%)*+ |
| Powershares Cleantech** | 14/1/2016 | Buy | US$26.84 | US$35/ No | 26.2 |
| Aldermore | 14/1/2016 | Buy | 197p | 315p/ No | 19.3 |
| Barclays | 14/1/2016 | Buy | 195p | 280p/ No | 20.7 |
| Breedon | 14/1/2016 | Buy | 70p | 85p/ No | 2.8 |
| Compass | 14/1/2016 | Buy | 1132p | 1300p/ Yes | 14.8 |
| Johnson M | 14/1/2016 | Buy | 2458p | 3400p/ Yes | 38.3 |
| Senior | 14/1/2016 | Buy | 206p | 330p/ No | -5.1 |
| First Solar** | 28/1/2016 | Buy | US$64.14 | $90/ No | -46.7 |
| Lloyds BG | 15/2/2016 | Buy | 56.7p | 65p/ Yes | 15.9 |
| SPDR Gold** | 26/2/2016 | Buy | US$117.93 | $135/ No | -5.0 |
| Hochschild | 26/2/2016 | Buy | 67p | 95p/ Yes | 41.8 |
| Barclays | 2/3/2016 | Hold | 160p | 160p/ Yes | – |
| Dunelm | 7/4/2016 | Buy | 947p | 1100p/ No | -15.5 |
| ICAP | 25/4/2016 | Buy | 478p | 520p/ Yes | 8.8 |
| JPM Japan | 25/4/2016 | Buy | 298p | 330p/ Yes | 10.7 |
| SSE | 25/4/2016 | Buy | 1482p | 1700p/ No | 3.6 |
| Lok n’ Store | 18/5/2016 | Buy | 330p | 400p/ Yes | 21.2 |
| Pennon | 18/5/2016 | Buy | 809p | 950p/ No | 1.3 |
| Talk Talk | 18/5/2016 | Buy | 251p | 350p/ No | -31.8 |
| GSK | 19/7/2016 | Buy | 1646 | 1800p/ No | -4.0 |
| Topps Tiles | 19/7/2016 | Buy | 107 | 150p/ Yes | 40.2 |
| DFS Furniture | 19/7/2016 | Buy | 211 | 300p/ No | 6.6 |
| RBS | 2/8/2016 | Buy | 184 | 250p/ Yes | 35.8 |
| Carpetright | 8/9/2016 | Buy | 237 | 350p/ No | -30.8 |
| Vertu Motor | 8/9/2016 | Buy | 49.75 | 60p/ No | -15.5 |
| Astra Zeneca | 3/10/2016 | Sell | 4957p | 4500p/ Yes | 10.1 |
| Dechra Ph | 3/10/2016 | Buy | 1328p | 1600p/ No | 1.4 |
| GSK | 3/10/2016 | Buy | 1635p | 1800p/ No | -3.3 |
| Hikma Ph | 3/10/2016 | Hold | 2023p | 2023p/ – | – |
| Shire Ph | 3/10/2016 | Buy | 4992p | 5150p/ Yes | 3.2 |
| Babcock | 19/10/2016 | Buy | 992p | 1150p/ No | -3.8 |
| Mediclinic | 19/10/2016 | Buy | 898p | 1200p/ No | -13.1 |
| TUI AG | 19/10/2016 | Buy | 1051p | 1250p/No | 11.3 |
| First Group | 18/11/2016 | Buy | 111p | 130p/ No | -6.3 |
| Greene King | 18/11/2016 | Buy | 758p | 900p/ No | -6.1 |
| Halfords | 18/11/2016 | Buy | 325p | 400p/ No | 7.1 |
| N Brown | 23/11/2016 | Buy | 197p | 250p/ No | -16.6 |
| Next | 23/11/2016 | Buy | 4996p | 5500p/ No | -18.7 |
| One Savings | 14/12/2016 | Buy | 348p | 450p/ No | 0.0 |
| Virgin Money | 14/12/2016 | Buy | 296p | 375p/ No | 9.8 |
+Calculated from recommendation date to either close on 5th January 2017/ or to the price target was met
*Gains/ Losses do not include dealing & compliance costs, stamp duties etc
**No adjustment has been made for FX movements.
Conclusion
The 2016 research reports were drawn from a diverse range of sectors and companies – an approach we intend to continue in 2017.