How our best tip this year saved readers from a 60pc loss

·4 min read
n illustration with a laptop and mobile phone shows the website of online fashion retailer ASOS - JUSTIN TALLIS /AFP
n illustration with a laptop and mobile phone shows the website of online fashion retailer ASOS - JUSTIN TALLIS /AFP

It is perhaps ironic that Questor’s best performer so far in a dismal year for the stock market has been the London Stock Exchange itself: its shares have gained 14.7pc since we tipped them in February.

Unfortunately, such wins have proved few and far between in the first six months of 2022. Just four of the 16 stocks tipped here for the first time in the period have gained, and on average those 16 tips have lost 5.8pc. On a like-for-like basis the FTSE 100 has fallen by 6.2pc, so we have the small consolation that we have outperformed the index by 0.4 percentage points.

It’s debatable whether this counts as an improvement over last year, which we described as “dismal” for this column when we summed up our 2021 performance in December. We reported then a smaller average loss from 2021’s new tips of about 2pc, but underperformance of the FTSE 100 by 7 percentage points.

Questor’s winners

Apart from our success with the London Stock Exchange, which we attribute to growing appreciation of its recurring revenues and scope to grow sales by 5pc or more a year, all our gains this year are in single digits.

Shares in Hunting, which supplies equipment to the oil and gas industry, have risen by 2.9pc since we tipped them in January. We might perhaps have expected more in view of the rise in the oil price and the West’s need to reduce dependence on Russian oil, and in Tuesday’s column we advised readers to hold on to the shares in the expectation of further gains.

We are also in the black with Beazley, the insurer, if only to the tune of 1.3pc since our tip in May. This can be seen as a creditable result in view of its own exposure to Russia. Finally, the iShares Physical Gold exchange-traded commodity has risen by 0.3pc since we made it part of a mini-portfolio designed to beat inflation in May.

Questor’s losers

Our worst performer so far this year has been Dr Martens, maker of the famous boots of the same name. Investors have voted with their feet and sent the shares 16.4pc lower since our tip in February. But analysts at Peel Hunt, the broker, called the stock “significantly undervalued” a month ago.

In early January we chose as our tip of the year Medtronic, maker of medical devices such as insulin pumps and defibrillators. Unfortunately it now trades 15.9pc below where we tipped it, although the strength of the dollar reduces the pain a little for British savers. Healthcare stocks have long‑term drivers and we retain our faith in Medtronic.

Springfield Properties, the Scottish housebuilder, has suffered a 13.5pc share price fall since we said buy in January. Sentiment is against the sector as interest rates rise but in an update last week we advised readers to hold in view of its low valuation and strong balance sheet.

As an investment platform, AJ Bell suffers when the stock market falls and its shares are 13.2pc below where we tipped them in March.

We recommended Mastercard last month as part of our series of American tips but the shares have already lost 12.1pc in dollar terms.

Six other stocks – National Grid, Severn Trent, Lloyds Banking Group, United Utilities, Newmont and BHP – have made single-digit losses since we tipped them.

Questor’s sells

We have had better luck with the stocks we have advised readers to sell or avoid, which numbered 18 in the first half of the year. All but three have fallen, by an average of 19.4pc.

The biggest fall we avoided was 60.2pc for Asos, the fashion brand, although we must admit that our advice was addressed only to investors who held the shares for their inheritance tax exemption, which vanished with their move from Aim to the main market.

Carnival, the cruise line, has lost 51.1pc since we advised readers to abandon ship in February, while B&M European Value Retail, the discount chain, has slumped by 37.8pc since our advice to sell in March.

JD Sports Fashion, GB Group, Keystone Law, Tekmar, Wood Group, Inspecs, Harworth, Informa and Hollywood Bowl are among other heavy fallers after sell tips from Questor.

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