This month I thought I'd share with you with my hit list of individual shares for 2010 – these are companies or funds that have been promoted on to my watch list and are likely to find their way into my portfolio at some point during the year.
Three themes dominate - the first and most important is emerging markets, but with a very selective twist. I want really interesting growth stories that have a great long term story. I'm also keen to keep building up my existing heavy utility/infrastructure holdings and my oil equipment, mining and oil company investments. Lastly I'd like to slowly build up a stronger value tilt but around special situations as I like the idea of a larger margin of safety in what I think will be very dangerous markets.
In the emerging markets space I'm interested in
• VinaCapital Vietnam Opportunities (VOF) which is a closed-end fund last seen trading at around $1.50 compared to an NAV of close to $2.40 a share. Everyone I talk to in the fund management world really rates the fund management firm Vinacapital as the best in the sector and I'm a long term bull on Vietnam. I'm waiting for an entry point below $1.35
• I've been carefully watching Agriterra for some time now and I think the point may soon come where I take a punt. This is run by a bunch of CAMEC veterans and is probably the purest London listed play on African agriculture and food processing. I've held back from taking the plunge up until now because of worries about the company's low profile in London, but at two recent fund conferences I talked to professionals who said they had recently built stakes in Agriterra.
• Ocean Wilsons is a brilliant way of buying into the Brazilian story at a reasonable price. This London listed vehicle has two major assets, the first is a dominant shareholding in the highly regarded local Brazilian infrastructure and marine services firm Wilson & Sons plus there's also a massive wad of cash and market investments sitting on the balance sheet as an added extra. Wilsons could be a big beneficiary - via its tugs division - of the massive investment by Petrobras in its deep-water fields.
• The Indonesia Fund is a US-listed, Aberdeen-managed closed-end fund. It's not especially cheap and Indonesia has had a good run, but again I'm very interested in the big, long term picture here. Indonesia has a large range of quantity of blue chips with strong financials and a great growth story. I'd like a small investment in this but I'll probably wait until emerging markets pull back a little more.
Over in the infrastructure and resource and resource equipment space I have four potentials…
• I like the look of an US-listed infrastructure fund called Brookfield Infrastructure Partners. This closely resembles British listed peers such as 3i Infrastructure and HICL (HSBC's infrastructure vehicle) but it boasts a more diversified portfolio, a better yield and a greater discount to NAV.
• International Power is likely to find its way very soon into my portfolio. The whole shennanigans about its abortive takeover doesn't faze me - either it does get taken over for north of 400p or it will continue to produce some very solid results, and a great dividend yield. I also like it's very diversified mix of utility assets
• Avanti Communications is not your usual infrastructure play in that it's expensive and loss making, but a number of the UK brokers have been featuring this as one of their big bets for 2010 based on the firm's HYLAS satellite roll out plans over the next few years. This is my best UK growth punt
• Last but no means least I like the look of Pressure Technologies which is a relatively cheap, UK based manufacturer of high pressure, seamless steel gas cylinder. This is a play on a number of themes including biogas, the government's new-for-old boiler initiative and the oil equipment industry. All for a PE of well under 9, a decent balance sheet and a growing order book.
My last big theme is that value bias. I have my sights set on two ideas, both US based (I have a growing US bias because I believe the American economy will recover very strongly over the next year).
• Hedge fund Third Point Offshore has shares listed on the UK market at a chunky 20 per cent dividend to NAV. I've been watching Dan Loeb's idiosyncratic but successful fund management style for some time and I strongly recommend that investors have a look at his quarterly letters. Mr Loeb is famous in the US for his outspoken shareholder activism but I'm more attracted by his unconstrained contrarian take on a range of asset classes including beat-up corporate bonds and mortgage-backed securities.
• Mr Loeb's also put me onto a US firm called TransDigm, which is an aerospace aftermarket supplier and a classic value stock with strong margins and great recurring revenues.
Written by:David Stevenson
http://www.investorschronicle.co.uk/Columnists/GuestColumnists/article/20100202/cdc2eebe-0fe5-11df-ba8b-0015171400aa/Big-ideas-for-2010.jsp
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