Our portfolio of picks for 2017 has achieved 10.3% average gain versus 8.8% from the FTSE All-Share. Among the selection, one of our stocks was taken over; one defied the retail sector sell-off to deliver handsome gains; and another has bounced back after a difficult period in 2016, just like we said it would.

Overall we’re pleased with the performance although the portfolio wasn’t without its weak spots. A mixture of operational issues, weak sentiment and external factors caused three of our selection to incur double-digit share price losses.

STRIKING IT RICH

Our faith in North Sea oil producer Ithaca Energy paid off as its largest shareholder Delek Oil came in with a £517m takeover bid in March. We encouraged investors to book a handsome profit at that stage and the deal subsequently went through in June despite grumbling from some shareholders that the price paid was on
the low side.

We also took profit during the year on our best performer, compliance-based information management software provider Ideagen (IDEA:AIM). A well-received acquisition and a series of contract wins helped lift the shares to more than 90p and at the time we felt the valuation looked up with events.

Our contrarian view on sausage skin maker Devro (DVO) also paid off. We rightly viewed the shares as being oversold on a profit warning in November 2016. Successful delivery of a turnaround programme and expansion in China, South East Asia and Russia were all well received by the market in the interim.

High end chocolatier Hotel Chocolat (HOTC:AIM) has won favour in its first full year as a public company despite a challenging consumer backdrop. With earnings forecasts consistently upgraded through the course of the year, it has demonstrated that the right businesses on the high street can continue to thrive, backed by a multi-channel offering which includes partnerships with the likes of online giant Amazon.

Support services group DCC (DCC) performed well and delivered nearly 25% share price gain. First half results reported in November showed adjusted operating profit up 14.4% to £122.5m and a 10% hike in the dividend to 40.89p.

RSA Insurance (RSA) has proved something of a damp squib; the shares are in positive territory but only in line with the wider market.

NURSING SOME LOSSES

Capital Drilling (CAPD) enjoyed a storming start to the year where it followed a buoyant mining sector higher.

Unfortunately exposure to troubles in the Tanzanian mining sector caused investors to panic about its near-term earnings. The market was also unimpressed by a reduction in dividend payments.

Support services business Serco (SRP) was our best performer in 2016 and we thought its turnaround story had legs for 2017. That was a mistake. The shares weakened in February after the group posted a 14% fall in full year underlying profit and have struggled ever since.

We underestimated the risks to the ITV (ITV) story when originally picking the stock, as a sharp decline in advertising sales weighed on the share price.

Transport tech business Tracsis (TRCS:AIM) recently bounced back from a mixed start to the year but the upwards share price momentum didn’t last long. Much of the frustration has been around the failure to identify an acquisition to satisfy its buy-and-build strategy. Price competition in its traffic and data services division has also been unhelpful. (TS)

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