Shares to buy, hold and sell: Lesley Duncan


The Standard Life UK Ethical fund is not the sort of socially responsible investment fund that actively looks for the most ethical or green companies. Instead, Duncan invests in firms that have not been screened out for being unethical.

Howden Joinery is one such company. It is the phoenix that has risen from the ashes of furniture company MFI, which called in the administrators back in 2008.

Working mostly with small builders, Howden builds, designs and sells kitchens. It has no direct-to-customer offering, but its builder customers but the kitchens at a slight discount and sell them on to their clients.

This is a long-term holding for Duncan that she has been adding to recently. She rarely invests in a company for less than five years. She believes Howden is a well-managed business with an "entrepreneurial management team that is constantly changing designs and meeting market trends".

The home refurbishment industry has been a notoriously tough one since the start of the economic crisis, but Duncan says Howden has been resilient and is taking market share from competitors, making it a "compelling" proposition.

Howden has growth plans on the horizon. Currently, it has 500 depots in the UK and is looking to open around 25 more each year to bring this figure up to 700. Duncan says it is company policy at Standard Life Investors not to reveal buy and sell prices, but the share is currently priced at 237 pence, having risen from a 52-week low of 109 pence in May 2012.

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Internet fashion retailer Asos needs little in the way of introduction. Launched in 2000, the company has what Duncan calls "first-mover advantage" in its space and it continues to grow its business and build its market share. International sales now account for 50% of Asos's business.

"Asos is capitalising on the fallout in the high street and has the benefit of exposure to the younger demographic," says Duncan. She also points out that it has an impressive sales conversion rate, which is three times the industry average, calling it "best in class".

The company is not resting on its laurels, either, and is constantly investing money into the business.

Asos has been in Duncan's portfolio for more than five years and she admits it is "on a quite punchy valuation" with a high price/earnings ratio, but that it is hard to argue with. "It is always improving: delivery, pricing, its website. We do like it over the longer term," she says.

Currently, the share price is 3,453 pence, up by 250% since April 2012.


Food retailers have been hard hit in recent years, says    Duncan. The advent of discount sellers, such as Aldi and Lidl, along with the efforts of Asda in that space, and Tesco "trying to get its foot back in the market", does not paint a pretty picture for the more middle-of-the-road supermarkets. "Industry trends are aggressive and competitive," says Duncan.

While Morrisons may recently have won over shoppers by being one of the few supermarket chains not to be implicated in the horsemeat scandal, Duncan says the company's lack of an online offering and nationwide convenience stores sounded the death knell for this share in her portfolio.

She thinks the chain has its merits, such as its focus on having in-store butchers and bakers, but overall she does not like the sector and sold the shares at the end of last year.

The share price has been relatively steady over the past 12 months, having reached a high of 303 pence and a low of 248 pence. It is currently priced at 275 pence.