Around this time last year, Boris Johnson had just won the general election by a large majority, and it seemed like a new era was about to begin.
A few cases of a strange virus have been reported in China, but few people noticed. For most economists and stock markets, the virus was an Asian problem.
That changed when February ended and Covid-19 began to hit Europe. Lockdowns became the new normal and stocks fell.
Fast Lane: Car racing video game maker Codemasters has more than doubled its share price in a year
Today, the FTSE 100 index of the UK’s largest publicly traded companies is nearly 15 percent lower than a year ago, the FTSE 250 is down nearly 7 percent, and many stocks in the junior AIM market have had tough times too.
Fortunately, Midas has largely managed to stay on the winners’ side and outperform the broader stock market.
Granted, there have been some disappointments but these have been outweighed by strong performances from dozens of strong UK companies.
The 2020 Best Achievement Award goes to Codemasters, the video game company for car racing enthusiasts.
The program includes the Formula 1 series and a number of other titles that include fast cars and crazy races.
Midas recommended Codemasters as one of its top picks for the year in January. The stock was valued at £ 2.78, it was clear that gambling was growing in popularity and CEO Frank Sagnier was optimistic about the future.
But even he couldn’t have predicted how Covid-19 would change the dynamics for companies like his.
Successive bans have forced billions of people to stay at home. Many have turned to video games to pass the time, and Warwickshire-based Codemasters has benefited from it.
Sales and profits rose, new games were enthusiastically received and the share price moved in spring and summer.
Midas has managed to largely stay on the winners’ side and outperform the broader stock market
In the past few weeks, the turbocharger has been increased to £ 6.65 as Codemasters has been the subject of two takeover bids. In November, Take Two Interactive, which owns the rights to the Grand Theft Auto games, launched a cash and shares offering with each Codemasters share valued at £ 4.85.
Earlier this month, California-based Electronic Arts rushed to Codemasters with a cash offering of £ 6.04 per share to £ 945 million.
The most recent deal was recommended by Sagnier and his board of directors, but some investors are hoping that Take Two or a third party will come back with a higher bid. For this reason, the shares have been above the Electronic Arts offer price since the California offer was announced on December 13.
Mida’s verdict: Hopes are high, but there is no certainty that an all-out bidding war will break out for Codemasters. Shareholders who bought earlier this year have been amply rewarded with this stock. All but the most adventurous should stop while they’re ahead and sell. Even those determined to see this fight through to the end should sell at least half of their stocks now.
Technology pioneer Boku has also benefited from home-stranded consumers. The software helps people pay for video games, music, and hundreds of apps on their phone bills – and millions of them have done just that in the past few months.
Midas recommended the deal in March when stocks had gone through a rough patch and fell to 59p.
They have since risen to £ 1.44 after strong interim numbers and a series of optimistic statements from CEO Jon Prideaux. Earlier this month, he announced that 2020 results would be better than expected, and brokers are now forecasting annual profit to more than double to $ 9 million (£ 6.5 million).
Boku connects more than 200 wireless operators worldwide with companies such as PayPal, Netflix, Microsoft and Spotify
Strong growth is also expected for 2021 and beyond, as Boku isn’t just a Covid-19 benefactor.
The company connects more than 200 wireless operators worldwide with companies such as PayPal, Netflix, Microsoft and Spotify so that phone users can quickly and securely purchase services from these companies. User numbers are growing rapidly and there is strong potential for further growth from the core business and related areas.
Mida’s verdict: No one has ever lost their shirt by selling stocks for a profit, and at £ 1.44, smart investors could decide to cut their holdings and transfer some cash. But they should keep some of the inventory in the hopes that Prideaux will keep delivering.
Golden Prospect precious metals
In difficult times, gold comes into its own. The precious metal soared to over $ 2,000 a troy ounce in the summer and although the price has fallen to around $ 1,875, it’s still up nearly 25 percent over the past year.
Golden Prospect Precious Metals, which invests in small and medium-sized miners, has done even better.
Safe haven: The price of gold rose by almost 25 percent last year
Midas recommended Golden Prospect on March 1, when the markets were just starting to get nervous and the stock was 29p. The company has made some smart investments since then, and stocks are up 80 percent to 53p, which gold far outperforms itself.
Like gold, copper is up more than 25 percent this year to stand at $ 3.55 a pound. The metal price is often viewed as an indicator of economic activity and there is hope that growth will recover in the years to come, driven by an increase in construction and infrastructure spending.
Copper price gains have bolstered Canadian miner Taseko, whose shares are up more than 40 percent to 93p since Midas recommended them at 65p in August.
However, the company has also benefited from several internal initiatives, with CEO Russell Hallbauer making significant progress on expansion plans.
Mida’s verdict: Gold does well in tough times. Copper benefits from robust economic growth. In today’s uncertain world, it can make sense for investors to hedge their bets. Golden Prospect and Taseko have exposure to both metals and are well-run companies themselves. Stop.
… and a single turkey
Loser: Bakkavor supplies most large supermarkets with freshly prepared food
Looking back at 2020, all but a handful of Midas recommendations are successful.
But our Turkey of the Year is Bakkavor, which supplies most large supermarkets with freshly made groceries like pizza, salads, fancy bread, and chilled – not frozen – ready-made meals.
Its February recommended stock was £ 1.35, down more than 40 percent to 80p as the company struggled with changing consumer habits and blocking rules in China, a key market.
In the UK, households have cooked more, spent less on ready meals and opted for longer lifespans to limit the number of shopping trips that hit all Bakkavor’s sales.
In China, the group supplies cafes and other grocery stores, many of which were temporarily closed during the year.
Additionally, Bakkavor was previously considered a fair dividend stock.
However, CEO Agust Gudmundsson waived the final payout and suspended the interim payment when he unveiled Bakkavor’s sad-looking half-year results in September.
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