MIDAS SHARE TIPS 2021 WINNERS AND LOSERS: Our streaming hits and futuristic farms grew your money, but a cool textiles firm felt a chill

By JOANNE HART FOR THE MAIL ON SUNDAY

Updated:

When we look back over 2021, what do we see? Lockdowns, loss and hardship but also extraordinary resilience and spirit. 

The UK led the battle against Covid-19 with a world-beating mass vaccination programme and companies showed that they could fight back and flourish, through adaptation, reinvention and sheer hard work.

The emergence of a new strain of coronavirus has taken its toll recently but every stock market index has moved ahead this year, from the FTSE 100, comprising Britain’s biggest listed companies, to the AIM junior market.

Winner: Zoo Digital dubs and subtitles popular TV shows like South Korea’s Squid Game

Winner: Zoo Digital dubs and subtitles popular TV shows like South Korea’s Squid Game 

Of course, challenges remain – with workers and goods in short supply, shipping rates soaring and inflation rearing its ugly head for the first time in years. But Midas has managed to navigate most of these choppy waters. 

The great majority of shares recommended during the year have beaten market indices, some by a significant amount. There have, admittedly, been some turkeys too, but they should pull through over the longer term.

Among the winners, certain sectors stand out – healthy food, transport and logistics and all things digital. Already on investors’ radar before the coronavirus pandemic, they are even more front of mind today – and likely to remain so for some while.

2021 WINNERS...

Light Science Technologies

The UK spends around £50billion a year on imported food and, while some items will always have to come from overseas, there is a growing recognition that we could and should produce more at home.

Light Science Technologies can help farmers to increase the quantity and quality of homegrown produce, particularly fruit and vegetables.

The company has pioneered a lighting and nutrients system for glasshouses, polytunnels and indoor farms so that produce can be grown all-year round and taste exceptionally fresh too.

Light Science floated on AIM in October and was recommended by Midas that same month at 12.45p. The shares are now 18.1p so they have risen more than 40 per cent in a couple of months, spurred by new contracts and a pipeline of deals.

Midas verdict: Light Science Technologies is helping farmers to grow more with less, saving them money, helping the planet and delivering better produce. But young companies have their ups and downs so, at 18.1p, investors should sell some stock to hedge their bets. Don’t sell out completely however, as Light Science is in an attractive market and boss, Simon Deacon, is an experienced entrepreneur.

Traded on: AIM / Ticker: LSTH / Contact: lightsciencetechnologiesholdings.com or 01332 410601

Indoor farm experts Light Science Technologies saw shares rise 40% in just a couple of months

Indoor farm experts Light Science Technologies saw shares rise 40% in just a couple of months

Wynnstay

An old-fashioned farming business, Wynnstay provides animal feed, fertiliser, agricultural hardware and sound advice to arable and livestock farmers across the UK.

Britain’s farming community spent years in the doldrums but the mood has begun to change. A new Agriculture Act is in place and consumers want to buy British. Many are prepared to pay more for domestic goods, allowing farmers to raise prices and invest in their businesses.

This all bodes well for Wynnstay, and the shares have risen by about 30 per cent to £5.88 since Midas recommended the stock in February.

Prospects are bright too. Chief executive Gareth Davis, a man not given to exuberance, said last month that annual results would be significantly ahead of forecasts, with brokers now expecting a 33 per cent increase in profits to £11million for the year to end October and a 6 per cent rise in the dividend to 15.5p, with further rises pencilled in this year and next.

Midas verdict: Wynnstay is a trusted partner to farmers up and down the country and the shares should continue to perform as shoppers opt for British produce. At £5.88, the stock is worth keeping.

Traded on: AIM / Ticker: WYN / Contact: wynnstayplc.co.uk or 01691 825512

Treatt

Healthy eating was considered faddish a few years ago. Now more and more people are jumping on the bandwagon and companies are too, as sugar is associated with conditions from diabetes to heart disease. Treatt is a major beneficiary of this trend.

Initially recommended by Midas in 2014 at £1.59, we looked again at the company in January when the price was £7.50. The stock has since risen to £12.15, a more than 60 per cent rise this year alone.

Treatt uses ingredients such as ginger to make fragrances and flavourings for food and drink

Treatt uses ingredients such as ginger to make fragrances and flavourings for food and drink

Treatt uses ingredients such as lemon extract, ginger and watermelon to make fragrances and flavourings for food and drink, from snack bars to iced tea.

Chief executive Daemmon Reeve unveiled a 41 per cent jump in profits to £20.9million for the year to 30 September and a chunky, 25 per cent increase in the dividend to 7.5p, testament to his confidence about the future.

Midas verdict: Treatt is like the gift that keeps on giving. Investors have already made a more than sevenfold return on this stock but, at £12.10, the price should continue to rise. Stick with it.

Traded on: Main market / Ticker: TET / Contact: treatt.com or 01284 702500

Clarkson

One of the best-known names in the marine industry, with a pedigree stretching back to the 1850s, Clarkson is a top shipping broker. The company arranges deals between shipowners and cargo-holders, carrying goods from crude oil to cuddly toys to chemical compounds.

Container shipping prices have been going through the roof this year but tanker and dry cargo rates have improved too, with overall seaborne trade expected to increase by nearly 20 per cent between 2020 and 2022 to almost 400 million tons.

Clarkson is ideally placed to benefit from these developments. Boss Andi Case said this month that profits for 2021 would be at least £65million, ahead of forecasts and up 40 per cent year-on-year. A 5 per cent increase in the dividend to 83p has been pencilled in too, marking 19 consecutive years of dividend growth.

Midas verdict: Clarkson’s shares have risen by about 40 per cent to £37.05 since Midas recommended them ten months ago. Shareholders in search of short-term wins could bank some profit. Longer-term investors should stick with this quality business.

Traded on: Main market / Ticker: CKN / Contact: clarksons.com or 0207 334 0000

Container shipping prices have been going through the roof this year

Container shipping prices have been going through the roof this year

Zoo Digital

More than 200million people now subscribe to Netflix worldwide and the company expects to add at least another eight million by the end of this year, with rivals such as Amazon Prime and Disney+ adding new subscribers daily too.

Streaming is in vogue. It is also increasingly international, with growing numbers of non-English speakers and more foreign language entertainment too, such as the South Korean smash hit Squid Game and the Spanish thriller Casa de Papel (Money Heist).

Zoo Digital has amassed a global network of actors, directors and translators, to dub or subtitle films and TV series so that everyone can enjoy them. The group employs clever technology too, which makes dubbing faster, cheaper and more flexible than rivals can offer.

Chief executive Stuart Green last month announced soaring revenues and said he was confident of delivering continued strong growth for many years to come.

Midas verdict: Midas recommended Zoo Digital in January at 79p, since when they have risen to £1.10. There is further to go. Zoo is well connected, its technology is ahead of the pack and this Sheffield-based company should continue to deliver. Even new investors could buy a few shares at current levels.

Traded on: AIM / Ticker: ZOO / Contact: zoodigital.com or 0114 241 3700

Industrials Reit

Industrial warehouses were once the preserve of old-fashioned, low-growth manufacturers. E-commerce has changed all that. Today, firms use these warehouses to sell, store and distribute their wares online, from toys to plants to takeaway kebabs.

Industrials Reit, formerly known as Stenprop, is a leader in the field, owning around 100 well-located industrial estates, housing 1,700 individual units. These are immensely popular among small businesses, rents are rising by some 5 per cent annually and the outlook is bright.

Industrials has also developed an online lease system so new tenants can sign up and move in without recourse to lawyers, agents or other intermediaries.

Midas verdict: Industrials shares were £1.36 when Midas recommended them as a top pick for 2021. They are now nearly 50 per cent higher at £2.04 and should continue to rise. Dividends are attractive too, making this stock a long-term hold.

Traded on: Main market / Ticker: MLI / Contact: industrialsreit.com or 020 3918 6600 

2021 LOSERS... 

Cool textiles firm HeiQ felt a chill – but is in prime place for a comeback

Frustratingly, this Midas tip for 2021 has halved in value to 87p since the beginning of the year. 

The company develops products that make textiles cooler, warmer, stronger or more efficient and customers include household names such as Burberry, Uniqlo and North Face. The firm even signed a partnership with Lycra last summer to develop an eco-friendly, biodegradable alternative to polyester.

Yet HeiQ has been hit hard by the global shortage of raw materials and soaring shipping rates. Chief executive Carlo Centonze has had to delay orders so sales and profits fell at the half year and the shares have fallen steadily since.

Midas verdict: Investors have been bitterly disappointed by HeiQ’s performance, including Centonze, who owns around 10 per cent of the shares. At 87p however, the price should recover. Many of the issues that plagued HEIQ this year have been resolved and customers remain enthusiastic. Investors should not sell out now.

Traded on: Main market / Ticker: HEIQ / Contact: heiq.com or 00 41 56 250 6850

SourceBio

When Midas recommended testing and diagnostics business SourceBio last January, the shares were £1.70. 

As one of the first private companies to receive government accreditation for its PCR tests, SourceBio rode high early last year but then slumped to £1.25 as Covid-19 cases fell. The shares are still lower than they were at the start of the year but, at £1.64, they are really starting to fight back.

SourceBio rode high early last year but then slumped to £1.25 as Covid-19 cases fell

SourceBio rode high early last year but then slumped to £1.25 as Covid-19 cases fell

SourceBio was recently named best provider of day two PCR tests for travellers by Which? magazine and, from 2000 tests a day a few weeks ago, the group is now processing more than 7,000 daily – with numbers rising fast.

But SourceBio is much more than a Covid-testing company. The group works with a network of professional pathologists, helping over-stretched hospitals to assess conditions, such as skin or intestinal cancer. 

Its laboratories are at the forefront of DNA sequencing that makes personalised medicine possible. And there are specialised facilities too, for the safe storage of drugs. The group has around £20million in the bank and intends to use to develop the business organically and through acquisition.

Midas verdict: SourceBio shares have underperformed but they should recover. The firm may be best known for PCR tests but its credentials spread much further. At £1.53, existing investors should hold. New investors may even choose to jump in at this point.

Traded on: AIM / Ticker: SBI / Contact: sourcebiointernational.com or 0115 973 9012

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