Interactive Investor editor Lee Wild reports on the two ii portfolios of shares with the strongest historical track records through the winter months.
Aggressive Winter Portfolio
A mixed bag would best describe both portfolios in 2017/18. Workspace provider IWG – formerly Regus – made us a 15 per cent profit. It would have been more if a bid approach had been accepted, but management clearly feels the business is worth more than was on the table.
High street fashion chain JD Sports has been a great performer in previous winter portfolios, and this year a 9 per cent gain justified its inclusion. UK expansion and growing overseas is being rewarded by investors here, but the shares still look undervalued.
Equipment rental giant Ashtead is no stranger to our seasonal portfolios, and a near-5 per cent profit this time round compared well with the wider market. There is a sense, however, that the shares could have achieved more given US tax cuts, and a weaker pound will be a huge help to significant earnings generated there.
Of the two losers in this year’s higher risk portfolio, high-yielding Taylor Wimpey gave up less than 4 per cent as momentum drained from the sector following a strong run in the months leading up to the strategy start date, 31 October. Investors have done well out of the housebuilders post the EU referendum, and it’s been hard to make a ‘buy’ case as house prices stabilise.
Big disappointment this year was builders’ merchant Travis Perkins. Down 16.5 per cent over the six months, it was the worst performer in either portfolio. Things could have been so different, as it only just beat rival Howden Joinery into this basket of shares. For the record, Howden rose 16 per cent over the same period!
Consistent Winter Portfolio
InterContinental Hotels Group stood out in this year’s consistent basket of shares, generating a 10 per cent gain. Speciality chemicals company Croda International has been by far the best and most consistent performer and, while it ended the period below its best, the shares still added over 6 per cent - respectable given wider market returns.
Heat treatment specialist Bodycote promised much and is widely fancied in the City, but it lost 4 per cent over the six months. It remains one for the future. Meanwhile, there was sad news at caterer Compass following the death of chief executive Richard Cousins in a plane accident in Australia. The shares ended 5.6 per cent lower.
Biggest disappointment this time round was Irish building materials firm CRH. Like Ashtead, it does much of its work in the US, so will feel a big tax benefit as Donald Trump’s reforms feed through. The president’s promised infrastructure spending plan is not quite as successful, however, and CRH shares underperformed expectations. A 15 per cent rally from mid-April – still ongoing – came too late for this portfolio.
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This article was originally published on our sister website Interactive Investor.
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