Wild’s Winter Portfolios 2024: winning stocks revealed

There’s a seasonal investing strategy that has stood the test of time. Going back decades, the statistics demonstrate that having money in the market for the six winter months has been far more profitable than being invested the whole year round. It’s also simple to follow, telling you precisely when to buy (last trading day of October or 1 November) and sell (on 30 April), which is why we’re running the portfolios for an 11th year.

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Stock selection involves very little manual intervention. We use data supplied by mathematician Stephen Eckett to identify stocks that have risen every winter – between 1 November and 30 April – for the past decade. Picking the five FTSE 350 shares with the best average winter returns creates Wild’s Consistent Winter Portfolio.

Buying this year’s portfolio of most reliable performers at the very end of October or 1 November, then selling on 30 April for the past 10 winters, would have generated an average return of 15.7%, excluding dividends. The benchmark FTSE 350 index returned 4.7%.

For investors happy with extra risk, we relax the entry criteria for Wild’s Aggressive Winter Portfolio to a minimum eight positive years in the past decade. To turbocharge potential returns, we then pick the five FTSE 350 stocks with the highest average annual profit over that time. This year’s basket of higher-risk shares would have delivered an average historic winter return of 20.8%.

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• Visit the Wild's Winter Portfolios home page here

After the difficult Covid years, which ended a phenomenal run for the winter portfolios, the past two years have returned to their winning ways. Last year’s consistent portfolio delivered a total return of 26.8%, following a 10.6% increase the year before.

For investors happy with greater risk, the aggressive portfolio played second fiddle in 2023-24, adding a still impressive 17.9%. The year before it was the top portfolio with a 19.7% return.

Normally, we’d like to see a weak summer season - from 30 April to 31 October - as this would further validate the strategy of seasonal investing. However, this year’s winter portfolios include two stocks that have had an unbelievably strong summer.

While three of the five consistent portfolio stocks fell over the summer (remember, that’s good news for us), one of the remaining two is up 49%. It means that holding the reliable basket of shares over the summer would have returned 6.7%. It’s even more extreme for the aggressive portfolios, which includes not only the same stock, but one that’s done even better. For that reason, the summer performance of this riskier portfolio is a positive 15.7%. For reference, the FTSE 350 benchmark index is up just 0.7%.

Risks for this year’s winter portfolios

Every year I run through the possible banana skins that might cause problems for the winter portfolios. This time, as well as the strong summer performers that might run out of puff, there’s the risk of recession if global central bankers miscalculate policy. Rates might not come down quite as fast as investors would like, despite inflation appearing to have been brought under control.

There’s a US election in the portfolio’s first week too, the result of which has the potential to impact world markets. So do conflicts in Ukraine and the Middle East, which could escalate at any time.

Consider too, high valuations in many sectors, which could trigger an exodus at some point that might feed through to a wider market sell-off. It wouldn’t be the first time.

Wild’s Consistent Winter Portfolio 2024-25

Source: Stephen Eckett. Past performance is not a guide to future performance.

There are two changes in the consistent portfolio for 2024-25 following the exit of Liontrust and InterContinental Hotels, despite both doing well last winter.

After an outstanding year, Keller Group (LSE:KLR) wins a place here. In October 2023 you could have bought the shares for about 670p and made a 42.5% profit holding them in last winter’s aggressive portfolio. But the engineering contractor has also had an amazing summer, returning another 49.6% in the six months since 30 April. Its shares trade at a record high, and the risk here is that they’ll run out of steam anytime soon.

However, at 1,652p currently, Keller shares still trade on a modest valuation of 9 times earnings, which is in line with historic levels. That’s because the City believes a big increase in profitability last year is sustainable. Half-year results, reported in August, showed adjusted operating profit up 69%, the record book at a record £1.6 billion, and management significantly increasing guidance for the full year.

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• Insider: buying a winter winner plus big sales in the FTSE 250

Analysts at Berenberg recently upgraded their price target to 1,900p, while peers at Deutsche Bank beefed up their objective to 1,800p from 1,550p. So maybe the shares can keep going, although anyone suffering from vertigo, watch out.

Self-storage provider Safestore Holdings Ordinary Shares (LSE:SAFE) has had a good summer, too, adding more than 10%. But then it’s been a standout performer for over a decade, during which time it’s risen every single winter and averaged a share price gain of 13.1%. Again, like Keller, the valuation is not excessive. In fact, a forecast price/earnings (PE) ratio of 19.9 is below both the three- and 10-year averages.

A 14% increase last winter ensured that electronic components company discoverIE Group (LSE:DSCV) is back in the reliable portfolio. And, reassuringly, it fell 3.8% over the summer. The shares have only fallen in one of the past 10 winters, and that was during the pandemic in 2021. What’s more, directors just spent £250,000 on company shares after reporting a smaller decline in quarterly sales.

While not expensive, some in the City argue that Discoverie shares are not cheap either. They prefer precision instrumentation firm Spectris (LSE:SXS), whose shares have tumbled 24% this summer. They took another trip lower this morning after warning that weakness in the Chinese market will likely run until early 2025. This will mean lower-than-expected annual profits.

But, like Discoverie, Spectris shares risen in nine of the past 10 winters, only losing out in 2021. At 2,526p, there’s still potential upside to Deutsche Bank’s price target at 2,880p, and the broker notes that the capital goods sector typically generates its best outperformance in the 6-9 months after an interest rate cut cycle begins.

A 40% profit last winter means Hilton Food Group (LSE:HFG) is back in the consistent portfolio. Shares have been flat over the summer, having finally made a full recovery from the brutal profit warning in September 2022. Action taken by management has turned things round at the food packaging firm, which in September this year said its seafood and core meat divisions were behind a 23% increase in half-year profit. It’s currently trading in line with expectations and has plans to grow overseas.

Wild’s Aggressive Winter Portfolio 2024-25

Source: Stephen Eckett. Past performance is not a guide to future performance

JD Sports’ profits warning at the start of 2024 means it has no place in this year’s higher risk portfolio. Neither does Hill & Smith, while Safestore’s historic average winter return of 13.1% is only good enough to guarantee a spot in the consistent portfolio this time. 

Following a 42.5% gain in winter 2023-24, it’s Keller Group (LSE:KLR) that secures a place in both portfolios for 2024-25. But while Keller’s summer share price boom is impressive, there’s a company in this portfolio that’s done even better. Construction and regeneration company Morgan Sindall Group (LSE:MGNS) has been unstoppable for the past couple of years, surging 170% to a record high and by almost 66% over the summer alone.

The latest leg of that rally came this month when shares rocketed 20% in a single trading session, triggered by an unscheduled trading update. Morgan upgraded guidance for the full year following “material profit growth ahead of expectations”. It added that annual results, due to be published in February, “will be significantly ahead of its previous expectations”.

There are no such concerns at Antofagasta (LSE:ANTO), one of three new stocks in the aggressive portfolio this winter. Its share price has dropped by nearly 20% this summer, tracking a decline in the copper price since its peak in May. As the summer ended, the Chilean miner said lower volumes had cancelled out higher prices, causing a 7% drop in half-year profit. And recently, Anto confirmed that production would finish 2024 at the lower end of its guidance range of 670-710,000 tonnes. It could be slightly less in 2025.

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Its shares have risen 80% of the time during the past 10 winters, averaging a share price return of almost 25%. They only posted declines in 2015 and 2019.

When Intermediate Capital Group (LSE:ICG)’s share price moves, it really moves. The private equity investment firm has risen 20% or more in six of the past 10 years. In the two winters it fell it was by over 20%. The shares have ended the summer pretty much where they started it, but that track record of significant positive winter returns gets it into the higher risk portfolio this year.

Finally, there’s a new stock in town. Hospitality real estate company PPHE Hotel Group Ltd (LSE:PPH) debuts in these seasonal portfolios after achieving a 44% gain last winter. It’s down 18% over the summer but has averaged a positive return of 16.6% over the past decade, and results released today have been well received.

Occupancy continued to improve in the third quarter to the end of September, which meant like-for-like revenue per available room (RevPar) increased by 2.3% year-on-year. Joint boss Greg Hegarty said the numbers were helped by “the continued return in demand across corporate, business, and meetings & events segments”. Newly opened hotels are also “ramping up in performance”.

Stephen Eckett

Stephen Eckett started his career with Baring Securities and then later worked for Bankers Trust and SG Warburg, during which time he worked in London, Hong Kong and Tokyo. After settling in France, he co-founded Harriman House which became a leading independent publisher of financial books in the UK. He has also written books on finance including the Harriman Stock Market Almanac.