Shares to buy, hold and sell: Chris Hiorns


Hiorns increased the fund’s holding in Wolters Kluwer in June. The Dutch information and software group provides services to legal, tax, finance and healthcare professionals.

"The managers have been early adopters of digital technology, with online software and services accounting for 71% of revenues, up from 45% in 2003. This has led to margin expansion and resulted in high renewal rates of 80 to 95%," he says.

The company fits the fund’s ethical criteria because it utilises innovative formats to improve access to information for healthcare professionals in remote parts of the world. It also promotes several education initiatives for vulnerable people.

Hiorns believes Wolters Kluwer is "set to benefit from positive long-term trends, such as the move towards global standards in finance and compliance and the need to increase efficiency in the healthcare system".

He adds: "It has also begun to develop a meaningful presence in emerging markets including China, where demand for services should increase with further economic development.

"Despite the current economic downturn, the company has managed to grow its top line and generate a doubledigit free cash flow yield, which has allowed management to follow through on a progressive dividend policy."

The stock now yields 6%. Hiorns bought the stock at €11.83 (£9.47) and it is now trading at around €14.29.


Fugro is a large global provider of geological data that helps mining, construction, oil and gas fi rms plan their projects. Hiorns has held Fugro since the fund launched in 1999. In that time the stock’s value has increased six-fold.

As existing oil and mineral deposits are depleted there is an increasing need to search out new deposits often in more challenging geological and physical locations. "In response to this Fugro has recently ploughed a lot of money into more technologically advanced ships. These will operate more efficiently and provide a greater range of services than traditional vessels," says Hiorns.

Long-term investments, such as these new ships, "should ensure Fugro can continue to achieve profi table growth as it can deploy the latest technology".

Despite being involved in the oil and gas industry, Fugro fits Hiorns’ ethical criteria, thanks to its focus on environmental surveying and sustainability-centred services. This includes initiatives that span from coral and biodiversity mapping to flood and earthquake hazard assessments.

The future looks good for Fugro as oil and gas companies are set to increase their spend on exploration, especially in the deeper ocean.

"It continues to trade on attractive valuation multiples and should be able to deliver strong growth into the future," Hiorns says.


Beiersdorf is one of the world’s largest manufacturers of skincare products, in particular suncreams. It has a very strong market position, largely thanks to the power of its Nivea brand.

Hiorns was able to hold it within an ethical fund because the company has a ‘no animal testing’ policy on its cosmetic products, and has been developing ‘in vitro’ alternatives for testing on animals for more than 20 years as part of its initiative to reduce animal testing across the industry.

"The company has the sort of defensive qualities that are attractive in tough times, including its resilient revenue stream, strong balance sheet and sustainable dividend yield. This has meant investors desperate for safe income opportunities have snapped up the stock. As a result, the valuation has become increasingly stretched and the shares are now trading at a price/earnings ratio of over 20 times with a yield of only 1.2%.

"It does have opportunities to increase its business in emerging regions, such as Asia, but it is heavily dependent on its core European market. Branded goods are likely to come under pressure as the squeeze on people’s incomes leads them to seek cheaper alternatives.

"While I like the company’s business model, the valuation has become too high and I have had to sell."