WE celebrated another successful week for our tips with two fresh share recommendations when we carried out our usual review of progress on Wednesday morning.
Defence giant BAE Systems, with a stock-market value of some £19 billion and model train-maker Hornby, valued at less than £28 million, may come from opposite ends of the investment spectrum but we believe both share the potential to outperform the stock market in coming months.
BAE is something of a gamble if Donald Trump delivers on his promise to step up US defence spending but has a safety net in the form of generous dividends which are set to be increased in line with earnings growth.
Any sort of dividend is still a distant dream for investors in Hornby who last received a payout in 2013 but chief executive Steve Cooke is dangling the promise of better times ahead as he carries out a radical restructuring to cut unprofitable lines and surplus stock while refocusing on UK operations. As usual we have set a stop-loss level for both shares at which we advise followers to consider selling on any setback.
The decision to release more funds for new investments came after all four of our investment portfolios scored further gains.
Best performance came from the 2017 selections which doubled profits during the week to reach its highest valuation so far thanks to a surge in support for property group SEGRO ahead of its annual results as well as major dollar earner Micro Focus. The 2014 list also perked up to show a rise of one per cent while the other two portfolios showed smaller rises over the week. We were pleased to see recoveries by some of our more disappointing selections, with Sainsbury’s eliminating previous losses and fellow supermarket Wm Morrison staging a three per cent rally on hopes of a boost to profit margins from vegetable shortages caused by poor weather.
Clydesdale Bank owner CYBG and Avon Rubber also improved, although Lloyds Banking slipped back on news it is reviewing payment of compensation for HBOS customers hit by the recent £245m fraud scandal.
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