Interactive Investor

The 15 top stocks in the first half of 2017

4th July 2017 14:25

David Brenchley from interactive investor

That UK equities have done well during the first six months of the year is little surprise, given the weak pound has been a huge boost to companies making the bulk of their money overseas. But investors would have done better buying stocks further down the food chain this year.

Up a modest 2.4% in the half-year to 30 June, the FTSE 100 has been beaten convincingly by its smaller counterparts. The FTSE 250 returned a healthy 7% over the six months, while AIM doubled that to 14%.

Despite volatility around the farcical UK election and further unease about the Brexit process, the FTSE 100 made a record high on 2 June, just one point away from 7,600. The FTSE 250 smashed through 20,000 and the AIM All-Share almost made it to 1,000 for the first time since 2008.

The six-month performance would have been even better had indices not suffered a grim June - the FTSE 100 was up over 5% to the end of May. From early June, the 250 and AIM fell 3.7% and 2.8% respectively.

As we enter the unpredictable summer months, it will be interesting to see if this weakness lasts to September and the end of the holiday season. Concerns around retail sales, rising inflation and low wage growth remain, while equity markets are typically vulnerable to shocks when liquidity dries up.

We'll also be curious to see how the stars of H1 2017 perform over the next six months. Here's a rundown of the five best performers in the FTSE 100, FTSE 250 and AIM.

FTSE 100

G4S has given many investors nightmares, but it's played a blinder since the middle of 2016, recovering from a terrible 12 months to top the list of blue-chip winners of the past six months.

Its followed by a couple of airlines, with British Airways-owner International Consolidated Airlines second with a 38.4% gain, and low-cost carrier easyJet fourth at over 36%.

Best-performing FTSE 100 shares

Rank Company Ticker Market cap (£bn) Price (p) Performance (%)
1 G4S GFS 5.05 326 38.9
2 International Consolidated Airlines IAG 12.8 613 38.4
3 ConvaTec CTEC 6.22 319 36.5
4 easyjet EZJ 5.39 1,359 35.2
5 Rolls Royce RR. 16.5 891 33.4

Many airlines talk of an improving trading environment, and both the aforementioned carriers have reported encouraging starts to their respective financial years.

Shares in orange-liveried easyJet are finally back to pre-referendum levels, while IAG hit a record high 632.5p recently and looks to have momentum.

Broker Panmure Gordon believes IAG is a "core holding" in the travel and leisure space. Look out for a third-quarter update from easyJet later this month.

Medical products and technologies company Convatec splits the airlines. Convatec, whose products include advanced wound dressings and skin care, listed in October, priced at 225p, giving it a market cap of £4.4 billion.

Success wasn't immediate, but the company increased in value by 36.5% in the first half, taking its market cap to over £6 billion. Investors lucky enough to buy in at IPO are sitting on gains of 42% currently.

Rounding off the top five in the blue-chip index is Rolls-Royce with gains of over 33% amid optimism around it non-aerospace business, and also further recover potential.

"We think some of the recent re-rating is also related to increased disclosure from the business and a better "grip" on company performance from the new management team," says UBS.

FTSE 250

With the FTSE 250 outpacing its larger counterpart, it's no wonder the 12 best performers in the FTSE 350 are mid-caps, with G4S the first blue-chip at 13th. Considering recent breaches of data in massive corporations worldwide, it's not a surprise that an internet security specialist is top of that list, with first half gains of 69.5%.

Sophos supplies the likes of Ford, Toshiba and Pixar with cloud-based network solutions that help keep networks and servers safe.

It's another firm that has hit a record high. Having listed midway through 2015, it had been rangebound until early April when a bullish trading update guiding final results above analyst expectations triggered a break higher.

Stobart, owner of the famous green lorries which dominate UK motorways, came in second at 66%, while the ever-popular Sirius Minerals - OK, we know it only joined the FTSE 250 on 19 June - grew by 57.6% in the first half after making significant progress at its potash mine in North Yorkshire.

Ferrexpo (54.2%) is the best-performing mid-cap since the Brexit vote, only fourth over the six months, while insurer eSure (49.7%) rounds off the top five.

Best-performing FTSE 250 shares

Rank Company Ticker Market Cap (£bn) Price (p) Performance (%)
1 Sophos SOPH 2.03 443 69.5
2 Stobart STOB 1.04 296 66.2
3 Sirius Minerals SXX 1.33 29 57.6
4 Ferrexpo FXPO 1.22 207 54.2
5 eSure ESUR 1.26 301 49.7

AIM All-Share

Echo Energy was only fourth in our list of top stocks since Brexit, but takes top spot in 2017 so far. It's performed extremely well this year, too, returning 687%. The shares actually peaked at 26.7p in May.

Bellzone Mining is a 10-bagger since the referendum and sits third in our table, with first-half returns of 457%. That duo is split by Trinity, a regular in the best-performer lists, which has surged by 567%.

We mentioned Trinity in April. On the verge of being wound up just nine months ago after trading in its shares was suspended due to severe debts, it is still one of the stars, despite easing from 14.5p to 12.5p since.

Strategic Minerals is an Australia-focused iron ore miner. As is the volatility of these minnows, it reached a four-year high of 3.7p back in May and, at the point, would have been top of our list with a gain of 722%. However, it still made the Top Five despite giving back a slug of those gains following final results.

Best-performing AIM shares

Rank Company Ticker Market cap (£m) Price (p) Performance (%)
1 Echo Energy ECHO 49.7 15.3 687
2 Trinity Exploration and Production TRIN 32.8 12.5 567
3 Bellzone Mining BZM 30.1 1.58 457
4 Strategic Minerals SML 24.6 2.23 418
5 Red Leopard RLH 3.60 0.28 326

 

This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.