Last year will perhaps be remembered as the year when Covid turbulence came back with a vengeance.
To add further uncertainty, some of the strongest performers from the previous year crashed, while rumours of private equity bids boosted many others.
Investors sought stability and predictability as Covid-induced nerves continued to buffet stocks.
Looking good: Revolution Beauty is an affordable and expanding global brand that sells in stores, but maintains its own online identity
Here, The Mail on Sunday team look back to assess whether their hunches bore fruit – or withered on the vine – and provide some food for thought for 2022.
Neil Craven Deputy City Editor: Revolution Beauty
I have spent the past two years tipping high street shares where I thought management efforts – and a bit of luck – could bring a turnaround, first in Marks & Spencer and then, last year, at WHSmith.
M&S let me down a little – slumping in the first year and then recovering this year as a pandemic survivor and (finally) delivering its turnaround story.
The WHSmith shares, meanwhile, flatlined this year. But, if the early signs of a less disruptive year are to be believed, then perhaps hold on a little longer for them too. With online pureplays down on their luck, I think it’s their turn.
But who to pick when most have specific issues difficult for investors to ignore from employment legislation (Deliveroo) and corporate governance challenges (THG aka The Hut) or supply chain issues (AO World, Boohoo and Asos)?
Revolution Beauty offers a bridge between both but without the pitfalls of either. No rents to pay and (let’s assume) no nasty corporate governance or margin surprises.
The shares floated at £1.50 each in July but with little new news since, have drifted from £1.70 in August to £1.23 last week.
An affordable and expanding global brand that sells in stores, but with its own online identity, it is a growing entity in a beauty market that can only, surely, benefit from a receding pandemic.
Alex Lawson, Senior City Correspondent: Inchcape
The car industry has been turned on its head over the past year, with the price of used cars even outstripping that of new vehicles.
A pandemic-fuelled worldwide shortage of semi-conductor microchips used in cars’ electronics systems has led to fewer vehicles being produced, making supply of certain models scarce.
Car dealership chain Inchcape has operations in 32 countries, as well as more than 100 dealerships in the UK
This has pushed car dealership chain Inchcape into top gear, with shares up 41 per cent to £9.10 in the past year. Further Covid chaos in 2022 looks set to fuel further gains.
What’s more, analysts reckon Inchcape has about £1.25 billion of firepower it could use to carry out mergers and acquisitions.
It has operations in 32 countries, as well as more than 100 dealerships in the UK, so further expansion could rake in big revenues. If that cash isn’t splashed out on deals, expect healthy dividends.
Let’s hope it fares better than my tip last year. Irish biotechnology firm Amryt Pharma develops promising treatments for rare diseases but has opted to delist from the London Stock Exchange’s junior AIM market this month to attract investors to its Nasdaq-listed shares in the US.
Harriet Dennys, City Correspondent: Centrica
The British Gas owner’s boss, Chris O’Shea, told The Mail on Sunday last month that investing in Centrica has been an ‘unhappy experience’ since 2013, when the stock peaked at more than £4 before a seemingly terminal plunge.
But O’Shea is battling to reignite value by streamlining the business, investing in cleaner energy products and improving customer service.
Frosty investors are thawing, with shares up 55 per cent since August at 72p.
Buying into the shares would not only buy into the stability of the energy market’s biggest player, but a turnaround story unfolding under new management.
Last year, I tipped budget airline Wizz Air, which soared 22 per cent from £45.64 to peak at £55.65 in March but ended 2021 down 8 per cent as the arrival of Omicron saw travel stocks crash.
Luke Barr, City Reporter: IAG
It may well be the optimist in me, but surely the only way is up for International Airlines Group (IAG) in 2022.
The British Airways operator’s share price has endured a torrid time of late, with its value in mid-December (£1.26) falling even lower than way back in March 2020 (£1.47) at the first lockdown.
Grounded: British Airways operator IAG’s share price has endured a torrid time of late, with its value in mid-December (£1.26) falling even lower than way back in March 2020 (£1.47)
Admittedly, hopes of an uplift are pinned largely on the pandemic improving over the next 12 months.
While it may be a wobbly start to the New Year given Omicron-induced turbulence, there is the expectation that passenger demand will come roaring back by spring.
IAG has already warned investors that it does not expect to see pre-pandemic levels of passenger demand until 2023; although with its share price at such lows (currently £1.42), and the public’s Covid sentiment shifting, I am willing to take a more optimistic approach. I mean, who doesn’t need a holiday?
Emma Dunkley, City Correspondent: Liontrust
I am tipping this roaring fund manager for a second year in a row.
The FTSE 250-listed group leapt a whopping 69 per cent in 2021, from £13 to £22. And all the factors that fuelled its success are even more relevant in the year ahead.
The fund group has been a predator in the land of acquisitions under chief executive John Ions.
Liontrust snapped up smaller rival Majedie last month. With more consolidation on the cards among asset managers, Liontrust is well-placed to pounce again.
Liontrust is one of the few fund managers bucking the trend of customers withdrawing their cash to park money in cheaper tracker funds: it raked in £2.1 billion in the six months to the end of September, up a fifth on the same period from the previous year.
It has also benefited from the focus on ‘green’ investments in the year that Britain hosted COP26, the global climate change summit. This agenda is not going away.
Hamish McRae, City Columnist: Gold
This year will see a surge in inflation. So what has been the best long-term hedge against that?
I suggest it is gold. Right now this traditional role of gold has been challenged by cryptocurrencies, but they carry huge risks.
Gold sovereigns are free of capital gains tax, and the Royal Mint is quoting about £3,400 for ten.
Perhaps it is better to ride out this unpredictable market with a little certainty rather than adding yet more risk.
You will not make a fortune but I hope do better than my pick last year, Rio Tinto, down 11 per cent.
The giant resources company did pay a huge dividend, but that was small recompense for a disappointing share performance.
Risers and fallers of THE week
The Footsie closed the week up just 0.2 per cent at 7,385 as Covid dulled end-of-year trading.
FTSE 100 biggest risers
- Dechra Pharmaceuticals 4.93%: Pharma stocks see strong demand
- Segro 3.16%: £425 million of offices bought in Slough
- Flutter Entertainment 3.11%: Buyers hail £1.6 billion acquisition of Sisal
- JD Sports Fashion 3.03%: Hopes pinned on bumper January sales
- Next 2.59%: Analysts optimistic about strong sales
FTSE 100 biggest fallers
- International Airlines –2.84%: BA scraps Hong Kong flights until March
- BP –2.18%: Price of oil plunges on New Year’s Eve
- National Grid –2.05%: Negative sentiment to electricity distributor
- Shell –1.35%: Oil price drops 1 per cent on Friday
- Kingfisher –1.23%: Worries at DIY stores’ performance grow
AIM biggest risers
- Napster 63.04%: Investors buy shares on low volumes
- Bidstack 38.30%: Deal with entertainment platform hailed
- Great Western Mining 32.50%: Gold price rally helps Nevada miner
AIM biggest fallers
- Craven House Capital –23.08%: Investors digest recent losses at bank
- Mosman Oil & Gas –17.65%: Final results dishearten shareholders
- Vela Technologies –14.00%: Disruptor’s half-year figures disappoint