Michael Taylor, a trader and columnist for BFIA, offered some excellent stock recommendations last year
The majority of smaller companies' stocks this year appear to be promising as well.
We are now halfway through the decade that started with Covid and was followed by an increase in living expenses. In recent years, markets have also been battered by geopolitical unrest. But 2025 was a positive year for stocks. Let's examine the performance of the businesses I selected early this year over the past 12 months.
The portfolio produced an average return of 35 percent, significantly higher than the FTSE All World index's 19.5 percent, and four of the six turned a profit. This indicates that since 2021, my selections have yielded an 89.65 percent return, or a 17.93 percent annual average.
This contrasts favorably with the performance of the majority of fund managers, who typically fall short of their benchmarks (despite paying hefty fees to do so). Additionally, I easily outperformed the market, with the FTSE All-World achieving 55.9% during the same time frame. In other words, I'm 60% better than the market.
Burberry, a luxury retailer, has had a difficult year due to tariffs and uncertain household spending on luxury goods. I tipped the stock at 962p, but it dropped as low as 596p before rising to new multi-year highs. The investment thesis is still valid, and the turnaround is moving along nicely. I think there is still more to come.
PensionBee, a platform that helps people manage their pensions by consolidating them into a single, manageable online account, has made significant progress in growing its clientele, which generates recurring income.
The company's cash position increased from 14.6 million to 33.3 million in the third quarter, more than doubling year over year. By 2034, the group hopes to have one million invested clients, and since 297,000 have already been acquired, I think the bull case is even stronger with a minor price drop.
Self-propelled, self-elevating support vessels (SESVs) are supplied to the offshore energy industry by Gulf Marine Services. Despite rising 43 percent at one point in the year, the stock has been extremely erratic and is ending the year nearly unchanged.
This is true even though the loan facility was successfully refinanced and profits increased, which reduced the net-interest margin. Given this development and the stable price, I believe the stock is now a more appealing purchase than it was a year ago. The market should eventually recognize the company's progress with continued deleveraging.
Filtronic is a British company that specializes in the design, development, and production of sophisticated radiofrequency (RF) communication subsystems and components. SpaceX is a major client of Elon Musk.
One of the biggest stars of 2025 has been Filtronic. As I mentioned in December of last year, if the company continued to do well, there was a lot of potential despite the high valuation. It has, as evidenced by the rise in profit improvements and the increase in SpaceX follow-on orders. Once more, there may be more upside. But now that the price has caught up to the story, I think the risk-reward ratio has shifted.
This year, Intercede, a cybersecurity company, has been the only disappointment. This, in my opinion, is because there haven't been any significant one-time agreements like there were in prior years. As the story develops, I think there is more potential for this strong and resilient company.
Along with Filtronic, Audioboom, a leading worldwide podcast platform, has been a major contributor to my overall performance this year. It surprised me to learn that the company is thinking about selling itself so soon after raising funds to buy another podcast network, Adelicious. Even though Audioboom has already been a huge success, I think there is still more to come.
All of the companies in this year's selection are profitable and well-established. Since there are no stop-losses permitted when selecting shares for a year, I have determined that they are too risky to include because I have previously been burned by selecting stocks with negative cash flow. As always, keep in mind that my recommendations are never advice. These are just ideas. You should conduct your own research, but I try my best to highlight both the advantages and disadvantages.
Four stock concepts for 2026.
One. Virgin wines (VINO is the goal).
Virgin Wines sells wine online. The cost-of-living crisis and modifications to Apple's iOS 14.5 operating system, which hindered online advertising, hit it hard when it floated in March 2021. Nevertheless, it seems that the group has stabilized the ship. The company has continued to be profitable despite a decrease in customer acquisition expenditures.
The company, which has a market value of 27.1 million, has net cash of 9.3 million after repurchasing 2 million shares during that time. Instead of reporting a single figure, as is the case at another wine retailer, the cash is divided between the value of customer deposits and the actual cash on the company's balance sheet.
Virgin Wines was able to increase their customer base by 28% this year with only a 6% increase in spending. Customers will interact with the company more effectively thanks to a new mobile app that will be released in early 2026. Virgin Wines recently reported that its pre-tax profit figures are exceeding projections, which can be explained by its business partnerships with Ocado and Moonpig.
As the investment in acquiring customers eases and a further share buyback of up to 7.15 percent of the shares in issue has been approved, earnings and net cash are anticipated to decline in the year ending June 30, 2027.
Virgin Wines may have a promising future if it can now attract reputable clients who will pay off in the long run. This stock has been despised by the market, but the first signs of improvement are beginning to show.
Two. Peel Hunt: PEEL is the goal.
Another Covid float is Peel Hunt, which debuted at 228p per share in September 2021. The company appears to be about to enter a new stage of expansion. At the time of the initial public offering (IPO), the share price was fifty percent higher than it is now.
However, a wager on Peel is a wager that the UK market will recover, and Peel is leading the field with an increasing number of corporate customers. It currently offers investment banking services to numerous smaller growing businesses in addition to 57 FTSE-350 companies. Corporate broking, research, trading, and flotations are among the services offered. Although there are no projections, we can see that the company made a net profit of 8.3 million in the six months ending September 30, 2025, with net assets currently standing at 100.7 million against a market value of 119.1 million. Sales increased dramatically during that time, from 53.8 million to 74.4 million, but we also have to acknowledge that this is a volatile number because it is focused on the financial markets. However, Peel Hunt is lean and prepared to capitalize if you think we are about to enter a new growth cycle.
Three. LSE: THG (THG).
September 2020 marked THG's 500p IPO. THG is an online retailer offering a number of brands. Since it went public, its value has dropped by more than 90%. I've been an outspoken opponent of THG for a while, but I reserve the right to reconsider if the facts seem to change. When new information is available, successful stock investors always update their preconceived notions. I believe that the THG of today is significantly different from the THG of a few years ago. THG Beauty and THG Nutrition both experienced faster growth in organic sales during the company's best quarter since 2021.
One of the leading fitness, nutrition, and diet companies in the UK is THGs Myprotein. Through partnerships with Mars, the brand is currently growing and entering supermarkets and gyms. The decision to go offline, in my opinion, strengthens Myproteins' presence and brand while also ensuring new growth and clients. After purchasing Claremont Ingredients in late 2020 for £52 million, THG sold it for £103 million, demonstrating its ability to recognize and increase value. Without taking into account the expansion of its beauty offering, I think Myprotein has the potential to continue expanding and maintaining its leadership in its industry, which bodes well for THG.
As of June 2025, the company's total debt was £321.4 million. But this number will be lowered by the sale of Claremont, and since both the Beauty and Nutrition divisions are expanding, THG's stock may soon rise again.
However, it's important to note that THG is expected to lose money in 2026 before turning a profit of £6.24 million in 2027. In addition to the fact that there have been two share placements in the previous two years, I would emphasize that a lot can happen during that time.
From 287.7 million in the first half of 2024 to 129.4 million in mid-2025, THG's cash balance decreased. However, we can also observe that 21.7 million in cash came from the issuance of additional shares, whereas 181.7 million was a repayment of bank loans.
With a net cash used in operating activities of 40.5 million, the business is more than sufficiently funded to continue operating for the foreseeable future.
#4. Sylvania Platinum (SLP is the goal).
Sylvania Platinum is not the only stock in this quartet that isn't a Covid float. Platinum-group metals (PGMs), including platinum, palladium, and rhodium, are produced by this South African company. Due to the volatility of commodity prices, Sylvania's share price and profits are also subject to significant swings.
In 2021, for instance, net profit was £99.8 million; in 2024, it was £7 million. However, palladium has dropped from £3,000 in 2022 to £1,350 in 2025 after reaching a low of £850 in 2024, while platinum has reached highs not seen since 2013. With £60.9 million in net cash, the company's balance sheet is solid, and management has a track record of giving money back to shareholders through dividends and share buybacks.
Panmure Gordon has projected £52 million in profit before taxes for the year ending June 30, 2026. If palladium and platinum are about to enter a new bullish phase, as the recent strong price action suggests, then Sylvania's cash and profits may continue to grow in the years to come.
Michael is a long-term investor in BOOM, VINO, PEEL, THG, and SLP. More of Michael's trading suggestions can be found in the newsletter. Purchase Bull Market Dot Com.
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