Share Tips Update: Palo Alto Networks, JD Sports, Ichigo, Attendo

The Armchair Trader’s stock picks have been doing well in January, possibly thanks to the surge in equity valuations as investors speculated on the prospect for an early Fed cut. We sold out of three sub-performers, and one company has now been acquired.

Interestingly many small caps opportunities continued to struggle. This seems more like an across the board phenomenon. My personal theory is that this is partly down to risk tolerance, with many larger investors who typically take aggressive positions in small caps remaining on the sidelines. Inflation has been a big concern, but also the headlines from the Middle East in January did not help.

Palo Alto Networks

Our US stock picker Raine Lahtinen chose Paolo Alto Networks NASDAQ:PANW in January, following the excellent showing of this stock in 2023. Last year Paolo Alto was up close to 111%. Raine warned that “PANW is expensive and has to grow up to this multiple.” But the company is a recognised leader in the red hot area of cyber security. CEO Nikesh Arora was at the Davos WEF conference in Switzerland in January and talking freely about the company’s strategic ambitions, which sound very much like they have come out of the Big Tech / Microsoft playbook.

JD Sports

Our FTSE 350 stock pick of the month was JD Sports LON:JD., a familiar presence on the UK high street. James Coffey rated this a “best in class retailer.” While investors have been tossing many traditional bricks and mortar retailers aside, James reckons the company is a neglected gem. Since 2004 its shares are up sixtyfold and it has capitalised on the massive interest in expensive trainers in the 16-20 demographic in the UK. JD Sports has also been spending heavily to acquire international footwear chains like Finish Line, DTLR and Shoe Palace.

Ichigo

Japan remains one of the hot markets for 2024 thanks to the easy money policy being pursued by the Bank of Japan at the moment. I still like the look of the Japanese real estate market, and especially sustainable property conglomerate Ichigo [TYO:2337]. It has a portfolio of companies in the property market, especially rental developments, that are welded together with a strong social responsibility and sustainable construction mission. But it is also dabbling in other areas, for example it owns an anime studio and it now also working on the prospects of property-linked NFTs in Japan.

Attendo

In Europe I picked Nordic healthcare provider Attendo, which is is listed in Stockholm. Attendo specialises in close care for people suffering from the various age-related dementia diseases that are now sweeping through Europe’s ageing but wealthy population. Attendo [STO:ATT] is a leading provider of care services in the Nordic region, with operations in both Sweden and Finland. It also works closely with younger clients with disabilities. I think Attendo also stands to benefit from reforms being made in the way all the Nordic countries are spending their healthcare budgets.

Sold: Octopus Renewables, Syrah Resources, Torq Resources. Acquired: Novo Nordisk has now completed the acquisition of Biocorp.

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So how are our picks getting on?

James Coffey’s FTSE 350 portfolio

*Prices as of close of play on 31 January 2024

Raine Lahtinen’s US stocks portfolio

*Prices as of close of play on 31 January 2024

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.

*Prices as of close of play on 31 January 2024

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.

*Prices as of close of play on 31 January 2024

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.

*Prices as of close of play on 31 January 2024