Stock Picks 2005
I'm not that keen on giving predictions, which is of course what happens at this time of the year.
well, it's all guesswork isn't it?
All the major finance houses give out grand and sometimes pompous predictions and they're usually wrong.
Tipsters and newspapers pick their selections for the year ahead and they often come unstuck - you can almost guarantee one or two of their picks will go bust.
So just remember - always do your own research and follow your own instincts. Don't just dive in and buy these New Year predictions.
And of course, regarding small companies, the Market Makers will be out to get you on the first day of the trading year and they will mark up these tips. Don't get caught out!
Despite my downbeat view on predictions... I have got five shares I think will do well in 2005.
I hold all these five shares and I'm already in good profits on them all but I reckon they are all still undervalued and there is more to come for all of them in 2005.
When I say 2005, I doubt I'll still hold any of them by the end of the year. Shares are for selling and I expect to be out with profits of 20-50% grabbed.
So here they are! Prices were mid price at the close on Monday Dec 20th
2005 Stock Picks :
- DART GROUP - Price 371p. Target 500p. I bought at 296p.
Dart transports both people and freight and has contracts with Royal Mail. I love the management here. A plane can be changed from carrying passengers to carrying freight in just a few minutes. Dart shares have already flown (excuse the pun) in 2004 but there is more to come from this big growth company.
- NORTHERN RECRUITMENT - Price 197.5. Target 250p. I bought at 186p.
It does what is says - it's based up north and it recruits! A market cap of only £34million against already declared profits of more than £3million with a strong outlook and bullish statements. The share price is way too low!
- RPC - Price 212.5p. Target 260p. I bought at 203p.
A boring package company, but an undervalued boring packaging company. They're getting something right as profits are booming. A possible takeover target too. Worth way more with a very low PE and market cap.
- ISOTRON - Price 510p Target 600p. I bought at 458p
This one has a great niche business - the sterilisation of medical products. The simple fact is, as more of us live longer, there are more operations and so more business for Isotron. A very bullish AGM statement recently shows there is a lot of growth still to come.
- HAVELOCK EUROPA - Price 134.5p Target 170p. I bought at 120p.
This company's profits are rising fast from spending on schools - one of its major businesses is supplying school equipment. The shares have had a good ride but it won't be long before they go up again. Good growth here along with a way too low market cap.
As for the FTSE in 2005? Sorry, but I don't see it going anywhere and I think it'll end up flat or a bit lower. I believe we are still in a long-term bear market. Still these days we can short so there will still be money to be made!
I wish you all a great Christmas and I'll be back here early in 2005 with a look back at 2004 and the lessons I learned from that trading year.