Saturday 27 May 2017 The one stop source for free breaking news, expert analysis, and videos on AIM and LSE listed shares


Challenge accepted, Mr Winnifrith: my stock picks for 2017

By Pizza Hardman Darren Atwater | Sunday 8 January 2017


Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.


Last week, ShareProphets printed The ShareProphets 24 share tips of the year for 2017 in review - can you do better?,  a compilation of the best tips from the finest minds at ShareProphets for 2017.

Yet, at the end of the article, Tom accused me of bailing on on my tips, claiming that I was too busy dancing naked around the Winterval Pole praying for Gaia to weaken the minds of good people around the world to accept ciimate change. Or something like that, I didn't read it too closely.

Now, my role here at ShareProphets is to keep the plates spinning, not make the tips. But that changes today.

Of course, all tips are meant as starting points for research; your situation is individual and no consideration is given to your personal financial needs; and you should make any financial decisions with a qualified and regulated financial advisor. Also, you'd be certifiably nuts to listen to me about anything financial. So here goes.

 

BUYS

Media

The end of the broadcaster is nigh.

You've heard of Netflix (Nasdaq: NFLX), YouTube (Nasdaq:  and Amazon Video (Nasdaq: GOOGL), which all the kids are watching now on their laptops and phones and ignoring the terrestial telly channels and their precious advertising. There is no future for 'channels' worth mentioning: in the future, the world will be state broadcasters — sorry, Tom, the BBC will survive — and content creators. Goodbye ITV, Channel 4, Channel 5, London Live (is that still on?). And crash will come quickly. Two to five years.

So BUY ITV (ITV). What? You say I just predicted ITV's obsolescence. Yes, that broadcast on channel 3 will be history, but ITV is one of the world's most prolific and success producers of programmes. Netflix, Amazon, NowTV, Hulu and the rest of our future telly overlords need to stream something, and a lot of it will be from ITV, paid for with recurring monthly subcriptions.

If you prefer something less dependent on the whims of creative types, own the pipes and BUY SKY (SKY). The future is fibre internet in every home, and Sky is going to be the one that delivers most of it to UK homes. While most Internet fibre backbone is laid by by BT's Open Reach unit (LSE: BT.A), this infrastructure is only to the local cabinet. Getting it to the home from the cabinet ("the last mile") is the expensive part, and Sky has been investing in their own equipment. Most of the other Internet providers are just white-labeling BT.  BT isn't trying hard enough: Sky will own this.

 

Magic

Grab a cup of tea and read this very long article in the New Yorker about graphene. 

Are you back? Let's continue.

As you read, Moore's law suggests that computer chips double in speed every 18 months, and they have basically done so since the 60s. This happens, in part, because chips have become thinner and thinner, and the transisters have become smaller and smaller.

But silicon has a phyical limit, which is being reached, and current computer chips may have reached their zenith.

Enter graphene, a substance that, yada yada yada, may increase computer chips a thousand fold.

The problem: it's difficult, finicky, and expensive to produce. And where there's muck, there's brass.

So BUY APPLIED GRAPHENE (AGM) if you want to get in on this.

 

SELLS

This would not be ShareProphets without some suggestions for the Global Shorting Conspiracy, so here are a couple of sells.


Insurance

Autonomous vehicles, that is cars that are driven completely by computer, are not far off. Over 180,000 people were injured by cars in 2015, with over 1700 killed. Autonomous cars are going to bring that down to a fraction. But those cars are not going to be owned by individuals, nor will they need to have insurance coverage to remedy 180,000 people. Car insurance is going bye bye.

As the largest car insurance company in the UK, it's SELL AVIVA (AV). But autonomous cars are still a few years away, don't expect a quick flip.

 

Retail


The only reason to visit a retail store is because it's some sort of bespoke item or you can't wait for Amazon to deliver it. I could suggest shorting all retail stores and probably come out smelling of roses, but today it's SELL DIXONS CARPHONE (LSE:DC)

My reasoning is simple: have you ever been in a Dixons Currys? Probably not lately, but if you have, you have seen the garbage scow that it has become.  It's begging to be euthanised. 

Take this tips with all the salt you like, but I think you'll find that all of them have sounder foundations than Tom's views on climate change. (TW note: or global warming as godless liberals like Darren used to call it when the world was getting hotter)

EDIT: 4:30pm, as pointed out in the comments, I meant Dixons Carphone (LSE: DC) not the old Dixons (LSE:DXSN). It's been corrected and I have sacked myself.


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