Shares to buy, hold and sell

Anthony Nutt is manager of the Jupiter Income Trust, the largest fund in Jupiter's range at £2.45 billion. He has managed the fund since 2000 and has been at Jupiter since 1996. Nutt also manages the Jupiter High Income Trust fund (Unit Trust), the Jupiter Dividend and Growth Trust and is co-manager of the Jupiter Distribution fund.

Over five years, Nutt has delivered a return of 17%, against a peer group average of 14.6%, according to Trustnet. Cherry Reynard talks to him about the last shares he bought and sold, and the one he's holding on to.


"I am genuinely contrarian and long-term when buying stocks. When I look at global valuations at the moment, I see that there's the lowest spread in values on record, with the emerging markets very highly valued and mature markets very lowly valued. This compression in valuations has brought about some opportunities.

"Kier Group is one example of this contrarian approach in action. It operates in the facilities management, construction and residential property areas. The market doesn't like the sector. The UK has just had the Spending Review, which has hit all stocks of this type.

"Kier is the best in class and very lowly valued. It has consistently beaten expectations, with a strong balance sheet with over £175 million in cash. This is equivalent to around 40% of its market capitalisation.

"It also has a growing dividend. The share price is starting to pick up after a strong set of recent figures, but there's still scope for considerable growth and upgrades. The sector has seen some bad news - particularly for Connaught - but Kier has not been hit.

"This is exactly the kind of stock that suits our investment approach. It's long-term, it's contrarian and a super buy."


"I have made very material gains out of the mining sector in my time running the income fund, but I sold most of my holdings in July 2007. However, the one mining position I've held onto is Hochschild Mining.

"It displays all the characteristics of a company called Antofagasta, which was a favoured holding of ours for a number of years and is now a FTSE 100 company.

"Hochschild is a Peruvian silver mining company, listed in London. It's 50% owned by the management team and has a good dividend yield. It operates in just one market and - we believe - is a really effective way to continue to play the commodities game.

"The fund's management is very disciplined and it's very much the best-in-class for what it does. It doesn't dabble in merger and acquisition activity, but just ekes out strong returns over the longer term. From July of this year, the silver price has increased from $18 to $24 an ounce.

"This is a hold rather than a buy because, given the recent spree in gold and silver, it's somewhat ahead of the curve. In general, we think the concept of 'holding' a stock is a bit faint-hearted – we believe you should either buy or sell. However, in this case, we'll make an exception. It's a little bit of spice for our portfolio."


"This really is a contrarian bet, but we believe Reckitt-Benckiser is a sell at current prices. It has been a market darling for a long time – it's up six times or more in the last 10 years, having been run expertly by Bert Becht since the 1990s.

"It has a wide range of top-selling brand names – Vanish, Calgon, Finish – but there are a number of things that make this a sell.

"The first is its acquisition of SSL. I've seen SSL – which owns the brands Durex and Scholl – passed around from pillar to post. It has a good market share and management but has hit something of a cul de sac. We believe it's a dull acquisition.

"Also, there are increasing price wars among the manufacturers of fast-moving goods, such as Unilever, Johnson & Johnson and Proctor & Gamble. All these businesses have been valued in line with assumptions for emerging market growth and this is fully reflected in the prices of these shares.

"Not only is the sector expensive, but Reckitt-Benckiser is expensive relative to its peer group. As such, I believe Reckitt-Benckiser is running out of steam – 2011 earnings are likely to be down around 5% and it appears that it's losing its lustre; it's facing intense competition and muted growth."

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