Midas participation tips: winners and losers in 2021

When we look back in 2021, what do we see? Closures, loss and suffering but also extraordinary resilience and spirit.

The UK has led the fight against Covid-19 with a mass vaccination program that hits the world, and companies have shown that they can resist and thrive, through adaptation, reinvention and hard work.

The emergence of a new strain of the Corona virus has taken a heavy toll recently, but every stock market index has advanced this year, from the FTSE 100, which includes Britain’s largest listed companies, to the start-up AIM market.

Winner: Zoo Digital dubs and subtitles for popular TV shows like Squid in South Korea

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

The vast majority of recommended stocks during the year outperformed the market indices, some by a significant percentage. Admittedly, there have been some turkeys as well, but they have to quit in the long run.

Among the winners, certain sectors stand out – healthy food, transportation, logistics and all things digital. Already on investors’ radar before the coronavirus pandemic, they are in the forefront of minds today – and likely will remain so for some time.

2021 winners…

Light Science Technologies

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

Light Science Technologies can help farmers increase the quantity and quality of local produce, especially fruits and vegetables.

The company pioneered a lighting and feeder system for greenhouses, multiple tunnels, and indoor farms so that produce could be grown year-round and also taste exceptionally fresh.

Light Science was released on AIM in October and recommended by Midas that same month at 12.45p. Shares are now 18.1 pence in volume, so they are up more than 40 percent in two months, driven by new contracts and a host of deals.

Midas rule: Light Science Technologies helps farmers grow more with fewer resources, saving them money, helping the planet and making better products. But young companies have their ups and downs, so at 18.1 pence, investors should sell some shares to hedge their bets. It doesn’t quite sell out, however, as Light Science is in an attractive market and its boss, Simon Deacon, is a seasoned businessman.

Trading at: AIM / Ticker: LSTH / Contact: lightciencetechnologiesholdings.com or 01332 410601

Indoor farm experts Light Science Technologies saw stocks surge 40% in just two months

Indoor farm experts Light Science Technologies saw stocks surge 40% in just two months

winstay

Wynnstay, an old fashioned agricultural company, provides animal feed, fertilizers, farm equipment and sound advice to arable and livestock farmers across the UK.

The British farming community has spent years in the doldrums, but the mood is starting to change. A new agricultural law has been put in place and consumers want to buy British products. Many are willing to pay more for local goods, allowing farmers to raise prices and invest in their businesses.

All this bodes well for Wynnstay, and the shares have risen nearly 30 per cent to £5.88 since Midas recommended the stock in February.

The prospects are bright, too. Chief Executive Gareth Davis, a man of no abundance, said last month that annual results would be well above expectations, with brokers now expecting a 33 per cent increase in profit to £11m for the year to October and a 6 per cent rise in dividends. Earnings to 15.5 pence, with further increases this year and next.

Midas rule: Wynnstay is a trusted partner for farmers across the country and stocks should continue to perform as shoppers choose British produce. At £5.88, the stock is worth holding.

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

Treatment

Healthy eating was considered a fad a few years ago. Now more and more people are jumping in the shopping cart and companies too, as sugar is linked to diseases from diabetes to heart disease. Therapy is the main beneficiary of this trend.

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

The treatment uses ingredients such as ginger to create aromas and flavors for food and drink

The treatment uses ingredients such as ginger to create aromas and flavors for food and drink

The treatment uses ingredients like lemon, ginger, and watermelon extract to create aromas and flavors for food and drink, from snack bars to iced tea.

Chief Executive Daemmon Reeve revealed a 41 per cent jump in profit to £20.9 million for the year ended September 30 and a massive 25 per cent increase in profit to 7.5 pence, a sign of his confidence in the future.

Midas rule: Treatment is like a gift that keeps on giving. Investors have already made more than seven times a return on this stock, but at £12.10 the price should continue to rise. Committed to it.

Traded on: Main Market / Index: TET / Contactt.com or 01284 702500

Clarkson

One of the most famous names in the marine industry, with a history dating back to the 1850s, Clarkson is one of the best brokers in the shipping business. The company arranges deals between ship owners and cargo carriers, moving cargo from crude oil to granulated toys to chemical compounds.

Container freight rates have continued to rise this year, but tanker and dry cargo rates have also improved, with total maritime trade expected to increase by about 20 percent between 2020 and 2022 to nearly 400 million tons.

Clarkson is ideally placed to take advantage of these developments. Boss Andi Case said this month that 2021 profits would be at least £65m, ahead of expectations and up 40 per cent year on year. A 5 percent increase in dividends was also set to 83 pence, marking 19 consecutive years of dividend growth.

Midas rule: Clarkson shares are up nearly 40 per cent to £37.05 since they were recommended by Midas ten months ago. Shareholders looking for short-term gains can make some profits. Long-term investors should stick to this good business.

Traded at: Main Market / Index: CKN / Contact: clarksons.com or 0207334 0000

Container freight rates have exceeded their limit this year

Container freight rates have exceeded their limit this year

digital zoo

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

Running is in vogue. It’s also becoming increasingly international, with more non-English speakers and more foreign language entertainment as well, such as the South Korean hit Squid and the Spanish thriller Casa de Papel (Money Heist).

Zoo Digital has brought together a global network of actors, directors and translators to dub or translate movies and TV series so that everyone can enjoy them. The group also uses smart technology, making dubbing faster, cheaper, and more flexible than competitors can offer.

CEO Stuart Green last month reported higher revenue and said he was confident of strong, sustained growth for many years to come.

Midas rule: Midas recommended Zoo Digital in January at 79p, since it went up to £1.10. There is more to go. The zoo is well connected, their technology is ahead of the pack and this Sheffield-based company should continue to deliver. Even new investors can buy some shares at current levels.

Traded at: AIM / Ticker: ZOO / Contact: zoodigital.com or 0114241 3700

Rit Industries

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

Industrial Reit, formerly known as Stenprop, is an industry leader, with around 100 well-located industrial parks, comprising 1,700 individual units. These businesses are very popular with small businesses, rents are up about 5 percent annually and the outlook is bright.

Industrial companies have also developed an online leasing system so that new tenants can register and move in without resorting to attorneys, agents, or other intermediaries.

Midas rule: Industrial stocks were £1.36 when recommended by Midas as their pick for 2021. They are now almost 50 per cent higher at £2.04 and should continue to rise. Dividends are attractive as well, which makes this stock a long-term hang-over.

Traded at: Main Market / Index: MLI / Contact: industrialsreit.com or 020 3918 6600

2021 losers…

Gorgeous textile company HeiQ felt cool – but it’s in a good place to come back

Frustratingly, the value of this 2021 Midas tip has halved to 87p since the start 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 company even signed a partnership with Lycra last summer to develop an eco-friendly, biodegradable alternative to polyester.

However, HeiQ was severely affected by the global shortage of raw materials and high freight rates. CEO Carlo Cintrons had to put off orders until sales and profits fell in the half-year and shares have fallen steadily since then.

Midas rule: Investors were very disappointed with HeiQ’s performance, including Centonze, which owns about 10 percent of the stock. With that, at 87p, the price should recover. Many of the issues that plagued HEIQ this year have been resolved and customers are still excited. Investors should not sell now.

It is traded at: Main Market / Symbol: HEIQ / Contact: heiq.com or 00 41 56250 6850

Source

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

As one of the first private companies to receive government accreditation for its PCR tests, SourceBio surged early last year but then fell to £1.25 as Covid-19 cases fell. Shares are still lower than they were at the start of the year, but at £1.64 they are already starting to resist.

SourceBio rose early last year, but then fell to £1.25 as Covid-19 cases fell

SourceBio rose early last year, but then fell to £1.25 as Covid-19 cases fell

SourceBio was recently named Best Provider for Day Two PCR Tests for Travelers by Who? The journal, and from 2,000 tests per day a few weeks ago, the group is now processing more than 7,000 tests per day — with numbers rising rapidly.

But SourceBio is much more than just a Covid testing company. The group works with a network of professional pathologists, to help overstretched hospitals evaluate conditions, such as skin or bowel cancer.

Its laboratories are at the forefront of the DNA sequencing that makes personalized medicine possible. There are also specialized facilities for the safe storage of medicines. The group has around £20 million in the bank and intends to use it to develop the business both organically and through acquisition.

Midas rule: SourceBio stock has underperformed but should recover. The company may be best known for its PCR tests but its credentials spread much more than that. At £1.53 existing investors should hold. New investors may choose to jump in at this point.

Traded at: AIM / Ticker: SBI / Contact: sourcebiointernational.com or 0115973 9012

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