Share tips – the Yorkshire Post's top tips for stock market success in 2022

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A £1,000 punt on his tip, power producer Drax, would see you sitting on £1,613 today. That is a massive rise of 61.3 per cent.

A punt on our city editor Ros Snowdon’s tip, upmarket banger firm Cranswick, would also have made a healthy profit as it closed the year up 5.2 per cent.

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The curse of our deputy business editor Greg Wright appears to be waning. His tip, surveillance firm Synectics, only fell 5.9 per cent, which is one of Mr Wright’s best performances over the years.

Drax has transformed the power station to become the biggest decarbonisation project in Europe

His tip for 2022 is Braveheart Investment Group. Braveheart, we’re really sorry. Mind you, a broken clock is right once a day, so maybe this is the year he shakes off his dreaded curse.

A punt on business reporter Ismail Mulla would see you down 2.6 per cent, which was bad luck. His tip was Severfield, Britain’s biggest construction steelwork contractor, which had a good year with a record UK and Europe order book.

Business reporter Lizzie Murphy probably wants to forget her tip – DeepVerge closed the year down 22.6 per cent.

Mark Casci – Business Editor

Drax

It is with some degree of regularity that I write about the need in Yorkshire for us to cast aside our natural inclination to be modest and bashful about our success and achievements

It is a hard ask and one I suffer from frequently.

However, as I sit down to write my share tip for 2022, and reflect on my recommendation for 2021, I must really grasp the nettle and heed my own advice.

My 2021 backing for the Drax Group has been an unmitigated triumph. The North Yorkshire power firm closed out the year up 230 points ahead of where it started on January 1, an increase of 61 per cent.

Croda

The increase in the value of shares in Drax comes after a powerhouse year for the firm.

Its Bioenergy with Carbon Capture and Storage (BECCS) programme to decarbonise the country, for so long subject to many false dawns, now looks set to bear fruit.

The company has selected a preferred partner with Japan’s Mitsubishi that will see Drax license MHI’s unique carbon capture solvent, KS-21 to capture CO2 at its power station near Selby, North Yorkshire.

The firm is confident that the Government will finally back its decarbonisation plan and its chief executive is on record with myself and other financial journalists that it has enjoyed positive discussions with ministers.

Avacta

CBI chief Tony Danker told me earlier this year that he believes Yorkshire has the potential to not only lead the country but indeed lead the planet on green energy and climate change mitigation.

I would submit that Drax’s BECCS plan forms a key pillar of this potential and see only good things for the firm going forward, something the market clearly shares. This follows a distinct purple patch for my share tips in recent years, with both Sumo Digital and Team 17, the previous picks for the last two years, also having delivered healthy returns for investors.

As such my tip for 2022 is going to be under some considerable scrutiny and I am acutely aware that, very often, there is only one way to go when you reach the top. After some considerable deliberation I have decided to stay in the renewable space.

My tip for 2022 is Pensana, a relatively new firm, is currently ensconced in creating a facility near Hull to process rare earth.

Rare earth is the key compound in the production of both the dynamos for wind turbines and in electric car vehicles. Once operational, the £91m facility will be the only rare earth oxide separation plant in Europe and one of only a handful of such facilities worldwide outside of China.

Pensana is investing $125 million into the plant which will generate around 100 direct jobs once constructed and in operation. Pensana has a target of producing circa 12,500 annualised tonnes of rare earth oxides, including 4,500 tonnes of magnet metal rare earth oxides, which would represent approximately five per cent of 2025 projected world demand.

In short this is a big deal and one I believe will prove attractive to investors in the coming 12 months as the nation and the planet increasingly turns its eyes to operations that benefit the planet and not help to fry it for future generations.

With the pandemic and particularly Brexit responsible for a serious drag on much of the UK economy, predictions are far harder to make for the coming months. However I think Pensana can defy the gloom.

Pensana closed 2021 with a share price of 97.6p.

Ros Snowdon – City Editor

My share tip for 2021 was upmarket food producer Cranswick and anyone following it would have seen a 5.2 per cent increase in the share price by the end of 2021. Not bad at all.

The Hull-based firm recently reported strong revenue growth despite “unprecedented” industry wide labour and supply chain challenges.

Cranswick, best known for its top of the range sausages and bacon, said like-for-like revenue surged 6.4 per cent to £993m in the six months to September 25.

It said that the unprecedented labour and supply chain challenges were being well managed with “excellent” customer service levels maintained.

Adam Couch, Cranswick’s CEO, said that a shortage of skilled butchers and slaughtermen has been one of the biggest challenges the firm has faced.

Yet this is an intelligent and highly experienced management team and the investments it has made over the last few years have mitigated much of the issue. Cranswick is working with the Government to resolve temporary work visas and it is confident it can achieve this.

My tip for 2022 is one of only two Yorkshire firms left in the FTSE 100 – Croda International. Since Morrisons was taken over last year the only Yorkshire FTSE 100 members are global speciality chemicals firm Croda and housebuilder Persimmon.

Now this may be a risky punt as Croda’s shares rose a massive 53 per cent in 2021. This placed it in the top five list of FTSE 100 outperformers following a stellar year for the firm, boosted by the vaccine boom. However, I think its shares will continue their upward trajectory this year.

The Snaith-based firm supplies lipids for Pfizer’s Covid-19 jabs and one thing is for sure, we’re going to need more jabs in 2022.

Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said that Croda has also been helped by an increase in demand for chemicals following the end of lockdown.

“It reported some cracking record results for the first half in the summer and said annual profit would be well ahead of expectations,” she said.

Broker upgrades on the

stock also sent the share price soaring.

Ms Streeter said: “The extent to which Croda is benefiting from the ongoing vaccine boom has become clear over recent months and it’s down to its investment in new innovative technologies.

“It supplies lipid nanoparticles for Pfizer’s mRNA technology and given the demand for booster jabs, that area of life sciences is bounding ahead.”

She said that although revenues from Pfizer may wane, it’s likely there will be growing customer demand for broader use of its products in medical treatments like oncology.

“Recovery in consumer markets has also helped Croda’s personal care sector which focuses on ingredients for skin, hair, and cosmetic products,” she added.

Croda closed 2021 at 10,096p.

Ismail Mulla – Business Reporter

So my pick for last year turned out to be pretty flat. I went for Severfield on the basis that there would be a major drive towards public infrastructure spending to stimulate economic growth following the coronavirus pandemic.

The Thirsk-based firm undertook over 100 projects in the year to March 31. These included the Lord’s Cricket Ground redevelopment of the Compton and Edrich stands and Fulham FC in London.

Severfield has proven to be pretty resilient throughout the pandemic.

“The group’s strategy to build a balanced business, with geographic, sector and client diversity, has facilitated not only revenue growth of around 30 per cent over the last three years, but has also provided us with resilience during the pandemic,” its chief executive, Alan Dunsmore said.

In November, Britain’s biggest construction steelwork contractor reported a record UK and Europe order book as it set to work on the new stadium for Everton FC.

Revenue rose 5 per cent to £196m in the six months to September 30 and underlying pre-tax profits jumped 23 per cent to £10.3m. Tendering and pipeline activity was also very encouraging in both the UK and Continental Europe, the company said.

However, all of this failed to materialise in any meaningful rise in share price.

The share price started the year at 69.8 pence. It tracked between 75 pence and 80 pence from late February to early October, but closed the year at 68 pence, a fall of 2.6 per cent.

Given that the cloud that is Covid-19 refuses to dissipate, I’ll settle for a flat performance last year.

Sticking to the theme of public health, I am going to back Wetherby-based drug developer Avacta this year.

The company has really come into its own over the past couple of years.

Developing rapid Covid tests, Avacta will surely have a key role to play over the next year in getting to grips with this pandemic.

The lateral flow test it produces have been shown to detect the Omicron variant of Covid-19 in clinical samples, the company recently announced.

Avacta is also developing innovative cancer therapies and powerful diagnostics based on its proprietary Affimer and pre|CISION platforms.

This has seen the firm’s share price trend upwards. A trend that I hope will continue this year.

Greg Wright – Deputy Business Editor

In dark times, I find solace and inspiration from a dog-eared book which has nestled on my shelves since childhood.

The Book of Heroic Failures – the official handbook of the Not Terribly Good Club of Great Britain – has provided a beacon of hope for generations of mediocrities.

It provides a comprehensive list of spectacular underachievement (The Least Successful Contortion Act is a personal favourite) which offers the perfect antidote to all those tedious tomes written by people living their best lives, surrounded by cabinets groaning under the weight of trophies.

I could certainly stake a claim for inclusion under the Least Successful Share Tipper category in any future edition of the book. Since 2004, the companies which have gained my blessing have usually been hit by misfortunes that emerged from clear blue skies. Corporate giants that appeared to be in rude health have often started to look rather sickly after securing my approval.

I’m pleased to report that every company I tipped has gone on to enjoy happier times after the curse of the Greg Wright share tip has been lifted, although any CEO could be forgiven for breaking into a cold sweat or planning a year-long vacation at the prospect of gaining my endorsement.

However, hope springs eternal and I continue to plod on in search of a winner. Last year, I plumped for surveillance firm Synectics.

A year ago, I predicted the company was on course to see its shares rise as the world started to recover from the pandemic. I believed the vaccine roll-out would lead to crowds returning to city centres. The world’s casinos, a key market for Synectics, were also expected to reopen.

Synectics remains an innovative company that does our region proud.

It continued to pick up new contracts in 2021, but sadly, the world did not unlock at quite the pace optimists hoped for. The firm was hit by travel restrictions on casinos and gaming resorts, which caused frustrations and economic pain around the world.

Synectics, which continues to be a bright long term bet, closed 2020 at 105p. It closed 2021 at 98.85p, a fall of 5.9 per cent.

So, after taking a deep breath, who am I earmarking for stellar returns in 2022, a year when we all hope life will start to return to something like normality? I’ve chosen Braveheart Investment Group, which has been quoted on the Alternative Investment Market of the London Stock Exchange since 2007, and has a strong track record of supporting companies which can change the world for the better.

The enterprises within Braveheart’s investment portfolio include Paraytec, which develops high-performance detectors for the analytical and life sciences instrumentation markets. In November, it was revealed that University of Sheffield scientists and Paraytec have developed an accurate, efficient and low cost Covid-19 test.

In an era when many sectors have been pummelled by market uncertainty, the life sciences have sailed on serenely.

Any enterprise involved in developing tests that help to end Covid’s vice-like grip on our lives is likely to prove profitable and popular with investors.

In 2022, I predict Braveheart will provide a rallying cry for the world.

It’s finally time to send my application to join the Not Terribly Good Club of Great Britain to the shredding machine.

Lizzie Murphy – Business Reporter

It was a bit of a punt to tip DeepVerge last year.

In 2020, the York-headquartered business, which uses artificial intelligence (AI) technology for testing cosmetics and skincare products, had tweaked its technology to test waste water for coronavirus, setting the company down an exciting new path with chief executive Gerry Brandon, a business turnaround specialist, at the helm.

The company has had a busy year of growth. In June, it raised £10m to fund its expansion. Its interim results in September revealed that the company grew revenues in the first half of the financial year by 231 per cent to £3.3m, compared to £1m in the first half of 2020.

However, the rapid expansion across the group in demand for products and services coupled with additional staff members, meant operational losses widened to £2.3m, compared to £936,000 in the first half of 2020.

The increased first half operational costs was offset by an increase in gross profit on higher revenues, delivering a smaller percentage increase in EBITDA loss before exceptional items over the same period of just 26 per cent to £697,000.

The firm’s share price ended the year at 24p, a fall of 22.6 per cent. It’s still early days for DeepVerge and it’s probably one to watch for the medium to longer term.

This year I’ve chosen a business which is in a booming sector that shows no sign of slowing down.

Clipper Logistics, which distributes goods for Marks & Spencer, Asda and Morrisons, said revenue jumped 33 per cent to £406m in the six months to October 31 following strong revenue growth in both E-fulfilment and returns management services.

Earnings rose 12 per cent to £23m due to strong revenue growth in value-added logistics.

Meanwhile, the Leeds-based firm is expanding its presence in mainland Europe after announcing its intention to buy specialist consumer electronic repair services business CE Repair Services Group in the Netherlands for up to £15m.

Its recent announcement on the formation of a joint venture with Farfetch focusing on the luxury online market is expected to significantly extend its geographical reach further both in Europe and further afield.

Last month, Tony Mannix, Clipper’s chief executive, said he was not worried that online retail would suffer once the pandemic ends and believes there will be growth in Click and Collect and that will support the high street.

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