Time for my annual blog on the investment year in view. It’s a bit late, but then I’m late on everything at the moment.
Last year’s recommendations worked out well. Gold, recommended at $875, rose throughout the year. As I write it is at $1,100, up around 26%. I gave three stock tips; Sportingbet are up 140%, Phorm are up 33% and Hydrodec are down 60%. In the words of the great philosopher Meatloaf, two out of three ain’t bad.
Calling the big stuff is complicated now and I wouldn’t know where to start. Oil is at $75 – my gut thinks it might fall a little but with so many strong forces at work I think I’d be a fool to try and call it. This may be the year when the true wealth of China and India starts to hit home – I’m not sure how this plays out, but it might see gold higher.
I’m concentrating on a few equity stories – at least I can get my head around some of these businesses.
I picked Phorm (PHRM) last year and I’m sticking with them. I believe in this business more than ever – their technology is complex and hard to replicate and they potentially drive a lot of revenue. It’s an all or nothing play – if they get moving they could become massive overnight, but they have no business as things stand and if they don’t get moving they are going to zero.
Two years ago Phorm managed to get to £35 on the back of hype alone. They are currently at £3.80 – there is potentially plenty of upside here. They have been locked in a battle with privacy campaigners (see Wikipedia) for a while now which has intensified the regulatory spotlight and kept the business at bay. I don’t think the arguments against them have any real bite and they should ultimately be able to satisfy most of the regulators they come up against – the current price action has a strong feel to it.
I’m also sticking with Hydrodec (HYR) for another year. They ran out of money last year, which wasn’t a clever thing to do in this bad market – the share price was caned and remained depressed for the whole year. They’ve made great strides this year, striking an exceptionally important deal with a large Japanese company called Kobelco and getting approval to operate their technology in Japan. I don’t see why they won’t have a big year in 2010.
Lastly I’ll have a small punt on Character Group (CCT). They are designers and distributors in the toy industry – they had a great year last year and ended up with three of the top selling Christmas toys (Go Go Hamsters, HM Armed Forces, Princess Pippa’s Palace). They announced big profits five days ago and their share price jumped up, but since then it has fallen and is now below where it was before the announcement (74p).
They’re on a roll at the moment and they have product lines that still have time to run. They’ve had a good year pricewise and there’s been some profit taking, but if they can break out of their current trading band they could have a decent run up.