It was a far from vintage year for the stock market with the cost of living crisis, war in Ukraine, the tech crash, and political chaos all doing their bit to undermine confidence.
Sadly the Standard’s share tips were not immune from the turmoil with only two out of eight showing a profit at the year end. On aggregate we performed badly against the top tier FTSE 100, which was boosted by the strong dollar, but respectably in line with the more UK-focused FTSE-250.
We hope for better things in 2023 with a selection of tips ranging from pawnbrokers H&T to Bisto gravy maker Premier Foods. May they ride out the ups and downs of the markets more successfully than last year’s choices. We’ll get back to you in a year’s time.
Ocado
Ocado was the worst performing stock in the FTSE-100 last year as the lifting of remaining Covid era restrictions meant supermarket shoppers rediscovered the joys of trolleys, aisles and orders to remove items from the bagging area.
But a strong showing in the run-up to Christmas when sales rose more than 8% suggests there is life yet in online grocery shopping in the UK. However the bigger play is the opportunity to do tie-ups with retailers overseas. Few companies do robotic warehouses better than Ocado and if can repeat the deal it signed with South Korea’s Lotte Shopping last November there is still huge upside potential to its 718p share price.
Jonathan Prynn
London Stock Exchange Group
Shares in the London Stock Exchange Group have had a decent run —up 90% in the last five years to stand at 7214p. So you could say it would have made more sense to tip them then. But the party isn’t over. Just before Christmas Microsoft took a 4% stake in LSEG as part of a wider deal to generate cloud tech products.
You don’t have to fully understand this to think it must be a good thing. If Microsoft later decides it wants more than 4%, well, that’s a good sign too.LSEG chief executive David Schwimmer has a vision for the business that goes far beyond just serving as a stock exchange. And he is how CEOs should be. Reassuringly boring, but willing to move quickly when opportunities arise.
Simon English
HSBC
Asia bounced back quickly after the global financial crisis and has been backed by many pundits to do so again in 2023. HSBC generates more than half of its profits from the region and stands to benefit from the reopening of the Hong Kong border and spillover from China’s economic rebuild after Covid.
Higher interest rates have boosted the income outlook and boss Noel Quinn is promising higher distributions to shareholders, including a dividend payout ratio of 50%. Fragile relations between China and the West haven’t helped shares, which now trade at 568p. an all-time low of six times forward earnings.
Graeme Evans
Premier Foods
Premier Foods might lack fashion appeal and is unlikely to be the name most mentioned at the culinary cutting edge. But the maker of Bisto gravy powder and Bird’s custard looks well set for the looming recession that the Bank of England thinks will outlast 2023.
As hard-pressed consumers cut back on dining out, the St Albans-based stalwart stands ready with a tried and tested range of cook-at-home alternatives — from Batchelors soups to Sharwoods sauces — telling cost-conscious Brits that their kitchen can be “the best restaurant in town”.
With shares at 114p and sales up by more than 6% in the second quarter of 2022, the year ahead could be the icing on the cake for Mr Kipling’s parent.
Michael Hunter
Darktrace
With the threat of corporate cyber-attacks seemingly at a peak, 2022 should have been a bumper year for cybersecurity business Darktrace. Instead it was poor.
The firm was mired in controversy at the end of January as founder Mike Lynch was threatened with extradition to the US to answer fraud charges, although he vowed to contest any court proceedings that might be issued. Then September when US private equity firm Thoma Bravo pulled out of a deal to take the company private, sending shares plunging.
The stock hit an all-time low at the end of December, down about 73% from its peak in summer 2021. In the belief things can’t get much worse for Darktrace in 2023, I think things can only get better for its 285p share price and CEO Poppy Gustafsson.
Simon Hunt
H&T
Britain’s biggest pawnbroker looks like the ideal (macabre) stock pick as the cost of living crisis bites in 2023. There’s just one flaw: H&T already saw its shares jump by 50% in value last year to their current 475p.
Still, the firm that buys and sells gold and jewellery from its 250 High Street stores has many strings to its bow — unsecured lending, Western Union money transfer and watches — all the while pledge lending (swapping valuables for short-term loans) looks to see soaring demand. A recent £17 million fundraise gives it fuel for marketing and more bolt-on deals.
Long-term, I reckon this kind of financing will move off the High Street. But for 2023, H&T should be a worthy punt.
Lucy Tobin
