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Our 2020 Picks: How did we get on in December?


A month that saw many loose ends tied up, December was a surprisingly straightforward end to what has been an unprecedented year.

We saw Covid19 vaccinations underway, some further clarity on the US Presidential Election and a Brexit deal that removes much of the economic uncertainty that a no deal would provide. The financial markets breathed a collective sigh of relief as the prospect of a more certain 2021 came in to view and a seasonal upturn over the Christmas period, a Santa Rally of sorts, even materialised.

Of course, as I write, 2021 has kicked off with further lockdowns across the globe with spiralling numbers of Covid19 cases around the world. Economic growth, which looked set to begin in earnest in 2021 may stall, until governments are able to take greater control of the pandemic. The financial markets, however, remain unperturbed.

2020 provided opportunity for investors. Short sellers couldn’t lose in March and value investors enjoyed rich pickings in April and May. Here at The Armchair Trader, we have been closely watching for key themes and we have seen an increasing reliance on digital services and a focus on sustainability and the environment. These themes suggest that the world may be changing and we expect them to continue in 2021. We will continue to seek out exciting opportunities.

The Armchair Trader’s December picks

China seems to have been the first economy to shrug off the pandemic and is getting back to work. It is no surprise that of the Asia single country investment trusts listed in London, that the top performers are focused on China. The leader of the pack is the JP Morgan China Growth & Income [LON:JCGI]  which has done extremely well this year, up nearly 100% over 12 months. A massive achievement, given these unprecedented times. The Armchair Trader team feel that China will continue to outperform in 2021 and we added JPMorgan China Growth & Income to our picks during the month.

A stock that caught our eye in December was Euro Manganese [TSXV and ASX: EMN], a battery raw materials opportunity situated in the heart of Europe, within striking range of several of the current and projected sites for mass production of strategically important electric vehicles batteries. The business is well positioned to benefit from the rapid growth in demand from European buyers of high-purity manganese output. Full scale production is anticipated in 2024, by which time we expect the EV manufacturing industry in Europe will have travelled a long way towards creating heavy demand for its output. A placing has raised CAD11.4m which will be used to further progress its Chvaletice Manganese Project in the Czech Republic.

There seems to be a lot of positive sentiment sloshing around UK stocks with the expectation that the UK economy will slowly climb out of the morass in 2021. Investors are paying attention to some of the stocks which have been heavily sold off during the pandemic. Among these is the airline sector, and especially IAG [LON:IAG]. In the current climate, its a bit of a risk but we think the company is simply too big to fail and is the sort of entity governments will want to bail out should the need arise. This takes a significant slice of risk out of the IAG stock equation

Here at The Armchair Trader we believe that the market for medicinal cannabis products is already approaching its second wave. The key for investors is finding the right companies amid the mix, mature businesses or those which have a new angle of approach. We think Christina Lake Cannabis [CSE:CLC] is well-positioned for the next phase in growth of high end cannabis and hemp-derived products as there is further regulatory liberalisation in Europe and the US in 2021.

Our Nordic specialist, Raine Lahtinen has been watching Finnish used car sales dealership group Kamux [HEL:KAMUX] since the summer and their Q3 results and webcast call on November 13th prompted us to add the stock to our December picks. The group has ambitions to be a leading used cars sales dealership in Europe and we think they are serious.

Bitcoin has been blazing a trail this year on the back of significant institutional support in 2020 and we see this trend continuing as we head in to 2021 with the cryptocurrency likely to have another record-breaking year in 2021, with prices expected to rise 50% and possibly double with its current momentum.

Our final pick of 2020 was Pineapple Power [LSE:PNPL] a Special Purpose Acquisition Company (SPAC), which listed in the UK on 24th December. We first wrote about them back in September and have been following their progress. The company is particularly interested in pursuing acquisition opportunities in the clean energy technology sector, an area that we see gaining significant ground in the coming years. This could prove to be an exciting opportunity.

Here’s how our picks are performing

Company/Instrument Start price Current price* Percentage change
Nano One 1.13 6.09 +439%
Remedy Entertainment 14 39 +182%
Harvia 8.86 24.5 +177%
Kodiak Copper 0.24 1.66 +592%
Thunderbird Entertainment 1.05 3.2 +205%
Citycon 6.33 7.93 +25.3% 5.56 7.12 +28%
Yellow Cake 211.50 249 -17.7%
Copper 2.90 3.52 +21.3%
Gold 1931 1895.1 -1.9%
ITM Power 260 516 +98.5%
Sotkamo Silver 0.31 0.31 +/-0.0%
Taat Lifestyle & Wellness 1.26 3.1 +146%
Bushveld Minerals 11.8 19.5 +65.3%
Nio 27.9 48.74 +74.3%
Brigadier Gold 0.28 0.26 -7.1%
Orsted 1014.5 1243.5 +22.6%
MTI Wireless 47.0 72.5 +54.3%
JPMorgan China Growth & Income 624 686 9.9%
Euro Manganese 0.44 0.48 9.1%
IAG 165.3 159.8 -3.3%
Christina Lake Cannabis 0.83 0.75 -9.6%
Kamux 12.6 13.6 +7.6%
Bitcoin 22846.4 28990 +26.9%
Pineapple Power 3.25 4.88 +50.2%

*Prices as of close of play on 31st December 2020

Removed from The Armchair Trader’s current watchlist for next month: Gold Resource Corp Reason: triggered the 10% loss rule we set on these stocks.

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This article does not constitute investment advice. Do your own research or consult a professional advisor.

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