Unipalm leads the pack through Internet gateway

The Independent offers readers a choice of four share tip portfolios for the coming year - complete with a health warning; Derek Pain, Stock Market Reporter of the Year, reviews the leading share price winners and the heaviest losers of 1995

In a year when takeovers, both real and rumoured, helped push the stock market to new highs it is fitting that a share which featured in one of the most unusual bids of 1995 should emerge top of the pile.

Unipalm outperformed all other shares, surging 455 per cent to 650p. Nimble footed investors could have claimed even more from the Internet gateway company as the shares briefly stretched to 875p.

At the other end of the scale is Ferrum, an engineer where a restructuring looks inevitable. It has the dubious distinction of suffering a 94 per cent decline.

The list of the 20 best and worst performing shares once again underlines that it is down among the second-liners and obscure fringe stocks where the greatest ability to out or underperform lurks.

Blue chips are conspicuous by their absence. Indeed the best of the FT-SE 100 constituents, Dixons, which joined the index last week, managed a 131 per cent gain and Burton 98 per cent compared with the 178 per cent achieved by Coda, a computer group which emerged as the twentieth best performing share. But, on the same yardstick, blue chip losses are much more comfortable. P&O, afflicted by profit fears and dividend worries, is the worst performing Footsie stock with a 23 per cent decline.

The regional electricity companies, which spent the year succumbing to takeover bids or offering unimagined rewards to their shareholders in a desperate attempt to keep the marauders at bay, failed to feature in the top 20.

Best of the financials is Standard Chartered. At the height of the banking takeover feast - which cost Kleinwort Benson and SG Warburg their independence - many a shrewd punter would have banked on Standard falling victim to a bid. Hope has, however, merely been deferred, Standard is regarded in some quarters as the hot tip for a bid this year.

Unipalm came to market at 100p in March 1994. Its shares bumped along around their placing level until April last year when its role as an Internet provider started to attract the more alert investor. Then came an announcement bid talks were underway and the stock market excitedly anticipated an offer in the region of 700p.

The offer, after weeks of uncertainty, materialised at nearer 450p - in the Nasdaq traded paper of bidder UUNet Technologies, a little known Virginia-based group. Unipalm slumped as speculators not wishing to suffer the problems of owning Nasdaq traded shares sold in the market. But they quickly rued their haste. For UUNet is 15 per cent owned by Microsoft and suddenly the Bill Gates magic started to influence its shares. As they surged so did Unipalm.

An offer from Goldman Sachs of a low cost dealing facility in UUNet probably tempted some to accept the US group's shares rather than sell in the market. The rip roaring UUNet performance lifted Unipalm, giving a final offer value of around 740p, although the shares were squeezed up to 875p. When first posted the offer valued Unipalm at pounds 97m; the closing price was pounds 152m. It was a splendid run for managing director Peter Dawe who likes to describe himself as a "failed accountant". He left the company some pounds 36.4m richer.

Not surprisingly bio-technology babes are well represented in the top 20. In a year which has seen some remarkable displays the likes of Oxford Molecular and Chiroscience are to the fore. So is British Biotech, which has surged 233 per cent on cancer drug hopes. It is now valued at pounds 875m.

Farringford's presence shows that even in these days of booming high technology stocks there is still money to be made in spotting old fashioned shell companies. For years Farringford has sought a role, flirting with reverse takeover deals as directors came and went.

Enter Trevor Hemmings, a director of the Scottish & Newcastle brewing giant. He made his fortune, estimated at pounds 250m, from Pontins holiday camps, now owned by S&N. Through his Northern Trust Co he built a significant stake in Farringford, which has been as high as 18p, and then arranged for it to manage 210 pubs owned by a company where he and S&N are shareholders. Mr Hemmings still has pubs in his private portfolio and the betting is they will be pumped into Farringford which had retained its quote through its ownership of a solitary hotel.

Pan Andean Resources is the top performer on the Alternative Investment Market. It is in the stable of the Dublin entrepreneur John Teeling and has promising oil developments in Bolivia.

Alvis is probably the most staid and longest established group in the top 20. This maker of armoured fighting vehicles has soared on the back of sharply higher profits from big overseas orders.

The motley band of losers are spread over many industries, ranging from engineering to marketing. And one, United Breweries, underlines that not all shells offer quick rewards. It picked up a chain of pubs during the year, collecting new management in the process. The changes have yet to influence the shares and shareholder celebrations look like being deferred for a long time. The best known casualties are the seemingly perennially damaged Eurotunnel, once again deeply involved in talks with its bankers, and Cray Electronics which switched from high flyer to lame duck as profits suffered a dramatic collapse.

Top 20 winners in 1995

1995 Year's % closing price gain

Unipalm 650p 455

Oxford Molecular 266p 339

Azlan 503p 265

Learmont Burchett 285p 256

Pan Andean Res 17.5p 250

Farringford 15.5p 244

Chiroscience 327p 237

British Biotech 1,805 233

MAID 321p 229

Hampden 80p 228

Forward 620p 218

Alvis 140p 218

Psion 780p 212

Filtronic Comtek 496p 191

Riva 29p 190

Shield Diag 162p 189

Blagg 15p 186

Specialeyes 17p 183

Northamber 255p 180

Coda 214p 178

Bottom 20 losers in 1995

1995 Year's % closing price fall

Ferrum 1.5p 94

Kendell 1p 94

Calderburn 31p 89

Roxspur 2.25p 89

Rodime 1.25p 89

Holmes & M 5.25p 82

Pengkalen 9.5p 82

Brit Building 31p 80

Tadpole Tech 77p 80

Trio 5p 80

Beverley 2p 80

Wakebourne 17.5 78

Premier Health 13p 78

Regent Corp 5.5p 78

Utd Brew 1.5p 78

Enviromed 26p 77

YJ Lovell 15p 75

Cardinal Bus 21p 75

Cray Elec 42p 74

Eurotunnel 87p 69