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Our 2021 Picks: How did we get on in October?

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October was a month defined by increasing inflation and commodity prices.

While cryptocurrencies were on the move, it was interesting to see gold and silver prices were not responding to the numbers coming out of developed economies. There is arguably a level of impatience at work here with some investors – we noted in 2008-09 that the gold and silver boom market took a while to develop.

We suspect that many investors are waiting to see whether inflation is really going to stick around, or whether this is an artificial effect created by pandemic support schemes and money pumping out of central banks. The argument here goes that central banks could start to hike rates once they are confident that economies are emerging from the lockdowns in relative good health, and inflation will be put back in its kennel.

October was also defined by companies still complaining about the impact of supply chains being disrupted. We suspect that impact of the pandemic is now easing. We had hoped for some more upside on our ETF trade – Breakwave Dry Bulk Shipping (BDRY) – but that has been struggling of late. We added it at 30.14 and as of 29 October it was close to our trailing stop loss.

BP

We added BP [LON:BP] to the Tactical Trading portfolio on 1 October. We wanted to have an oil giant in the portfolio to reflect our strategic views on the oil and gas price. We thought they would be major contributors to inflation over the winter months. Looking at how BP was performing against its pre-pandemic share price, we could see it was still some way off. Bear in mind BP was trading around 500—580p before the pandemic struck. On 1 October it was still below 340p. At the same time oil has caught up with its pre-pandemic price levels.

Marshall Motor Holding

We discussed Marshall Motor Holding [LON: MMH] on the recent Master Investor small caps webinar. This one went into the longer term Buy & Hold portfolio. We liked the metrics on Marshall Motor Holdings (it has cash and is using it to buy new stuff) and the fact that it is well positioned to exploit the demand for second hand cars. This is probably not a SIPP stock as the second hand car dealership boom story likely has a six month shelf life. Let’s see what the next set of results looks like.

Airtel Africa

We added Airtel Africa [LON: AAF] to our Buy & Hold list following some good results and momentum in the share price. We expected there would be some short term profit taking. Revenues are up and the company seems well-positioned to capitalise on the growth of demand for telecoms across the African continent. We like the long term infrastructure story in Africa, especially telcos, which have really changed life for millions of Africans already. Another solid Africa play next to our First Rand pick.

Removed from our pick lists in October – Brigadier Gold, Rritual Superfoods (29 October)

Tactical trading portfolio

These are shorter term equity and commodity trades which we can see playing out within one to three months. We will sometimes keep these on longer if the trade is still quite range bound but we are anticipating further upside. These trades have the tightest risk parameters.

Company/Instrument Start price Current price* Percentage change
Raytheon Technologies 73.3 88.86 +21.2%
Sosander 15.8 27.0 +71.4%
Lloyds Bank 40.4 50.22 +24.2%
Glencore 272 365.25 +34.3%
S4 Capital 5.8 7.26 +25.2%
Breakwave Dry Bulk Shipping 30.14 30.04 -0.3%
Bumble 55.19 52.52 -4.8%
Trainline 338.6 316.8 -6.4%
Hugo Boss 52 54.06 +4%
BP 337.95 350.20 +3.6%

*Prices as of close of play on 29th October 2021

Longer term buy and hold portfolio

These are positions where we see a longer term growth scenario, usually in the small to mid cap space, but sometimes larger companies. We will typically be keeping these stocks on the list for at least six months and often longer. Consequently our risk tolerance is higher for these positions than for the trading list.

Company/Instrument Start price Current price* Percentage change
Remedy Entertainment 14 40.00 +189.9%
Harvia 8.86 53.2 +500.5%
Yellow Cake 211.50 351.50 +66.2%
ITM Power 260 489 +88.1%
MTI Wireless 47.0 68.0 +44.7%
QT Group 86.40 140.42 +62.5%
Nordnet 152.20 164.65 +8.2%
The Panoply 268 260 -3%
First Rand 5229 5801 +10.9%
Turkish Airlines 13.86 15.28 +10.2
Generac Holdings 430.34 498.56 +15.9
Live Nation 81.78 99.98 +22.3%
Bellway 3474 3313 -4.6%
Morgan Sindall Group 2600 2275 -12.5%
Spectris 3948 3764 -4.7%
Marshall Motor Holding 273.0 292.0 +7.0%
Airtel Africa 109.6 109.6 0%

*Prices as of close of play on 29th October 2021

Venture portfolio

These are companies which we see as having long term and considerable growth prospects. Due to their size and the nature of the business they are in, we feel that our normal risk management constraints should not be applied to these stocks.

Company/Instrument Start price Current price* Percentage change
Nano One 1.13 4.27 +277.9%
Taat Global Alternatives  1.26 2.65 +110.3%
Kodiak Copper 0.24 1.19 +395.8%
Euro Manganese 0.44 0.53 +20.5%
Thunderbird Entertainment 1.05 4.88 +364.8%
Pineapple Power 3.25 8.60 +164%
ProStar 0.89 0.46 -48.3%
Wedgemount Resources 0.50 0.35 -30%
Cypherpunk Holdings 0.21 0.25 +19%
Minnova Corp 0.35 0.14 -60%
Red Moon Resources 0.82 1.47 +79.3%
Cloudbreak Discovery 4.50 2.05 -54.4%
Zoglo’s Incredible Food Corp 0.43 0.24 -44.2%
EnWave Corp 1.01 0.99 -2.0%
Net Zero Infrastructure 0.045 0.036 -20%

*Prices as of close of play on 29th October 2021

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This article does not constitute investment advice. Make sure you do your own research or consult a professional advisor.

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