We took a gamble that shares of Glasgow's Weir group have finally hit rock bottom when we made a notional purchase for our flagship 2012 portfolio on Wednesday morning.
The decision came after the share price rose 5 per cent the previous day when chief executive Keith Cochran outlined a fresh round of cost-cutting designed the protect the balance sheet and ensure the company can continue to pay fat dividends.
We recognise that the purchase is highly-speculative with no immediate signs of relief for Weir's hard pressed industrial valves business which has been mauled by the slump in its key oil and gas and minerals markets.
But strong cash flow and a healthy balance sheet means the company should be able to ride out present tough conditions ahead of the inevitable pick up in commodity values.
We have set a tight-stop loss target, some 7 per cent below the current share price, at which followers should consider selling on any further relapse in recognition of the high risk attached to shares which have been out of favour for some time.
We usually allow a full 10 per cent safety margin but adopted a similar approach to recent tips for IMI and Essentra.
The fresh purchase follows another solid performance from the majority of our tips which saw three out of our four portfolios register further progress when we carried out our review on Wednesday morning.
The disappointing 2014 selections were the lone exception with their overall value recording a fractional fall after slippages in Aldermore, Essentra and National Grid outweighed a further rise in engineering consultancy Ricardo.
In contrast, all five constituents of the 2013 list gained ground to show a 1.5 per cent gain and the 2012 portfolio was also up by more than 1 per cent following another good performance by the outstanding Halma.
The 2015 portfolio managed only a fractional rise after computer software group Tracsis suffered a sharp write down following its figures and cancelled out most of the gains recorded elsewhere.
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