The US market has disclosure rules for large investors. So it’s relatively easy to see what Buffett investment vehicle Berkshire Hathaway has been up to in recent months.

As a long term investor, his choices should be worth following. But, with retirement creeping closer and financial markets in turmoil, I’m keen to ensure I get in at the right price.

Focus on the oil sector

Some of the largest bets made by Berkshire in recent months have been in the oil sector. And what an investment that has been for Buffett.

The prices of his chosen stock picks, Chevron and Occidental, have already shot up. So it’s clear to me that I may have missed the boat on these shares.

A fintech growth stock

Warren Buffett also holds Brazilian fintech company, NU Holdings, which had a high profile IPO last year. Since its stock exchange debut at $9 per share, the price has dipped. This will have meant some losses for Buffett, but it’s worth remembering that he was invested in NU well before the IPO.

There are well known risks with such fintech companies. Profitability may be a long way off. It’s also clear that the Brazilian economy isn’t immune to major economic and political shocks. 

I’m backing Warren Buffett on this one though and with the shares sitting well below their IPO price, I think it could be a good time to buy some for my portfolio.

Storms ahead for Activision Blizzard

One investment that appeared too good to be true was Buffett’s acquisition of Activision Blizzard stock. Berkshire managed to pick up a juicy stake in the company at around $77 per share late last year.

Only weeks later it was announced that Microsoft was planning to buy the company at $95 per share — showing a massive paper profit for Berkshire Hathaway.

All is not well though. A high-profile workplace scandal plagued Activision last year. Added to this, the US government is now investigating alleged insider dealing around the Microsoft deal. 

With all this background noise, it’s a share I’m avoiding for the moment.

Formula 1 racing ahead

The last stock on my Buffett trail is the Formula One Group (NASDAQ:FWONK), controlled by Liberty Media. 

The Formula One operating company was bought from Bernie Ecclestone back in 2017. At $8bn, the price tag was hefty, so what has Liberty done with its investment since then?

Adding to the number of races on the calendar has been one strategy. But what seems to be paying off best is the group’s focus on US consumers. 

The revamped US Grand Prix has been a great success. Increased on-track spectator numbers were mirrored by significant growth in its TV audience. 

There’s a downside though. Sanctions on Russia means that the Sochi Grand Prix is off this year. And sponsorships have also been cancelled.

I’m worried about the Russia-Ukraine situation from a purely humanitarian viewpoint. As an investor, I’m also worried that further conflict may cause other unforeseen difficulties for Formula One in 2022.

I’ll be avoiding this stock and focusing on NU Holdings to boost my retirement pot.

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Fergus Mackintosh does not hold shares in any of the companies mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

The IOG (LSE: IOG) share price shot up by more than 10% on Monday. The oil and gas firm being forced by sanctions to rip up its off-take agreement with Russia’s Gazprom could well be a blessing in disguise.

As an existing shareholder in IOG, I have followed its progress closely in recent months. With western countries worrying about energy security, there’s been a renewed focus on fossil fuels. By the look of it, IOG appears to have the right product coming on stream, in the right location at the right time.

The UK-listed company has been working hard to bring its three new North Sea gas fields into production. Recent announcements indicate that the gas will start pumping this month.

On its own this wouldn’t be enough to persuade me to buy more shares in the company. There was, however, a more important message from management last week that sparked my interest.

As is normal in the fossil fuel industry, IOG put in place agreements for the sale of its gas well in advance of production. BP acquired rights to gas from the Blythe field, but it was Russia’s Gazprom that secured the remaining off-take rights. 

Gazprom off-take contracts 

With sanctions kicking in over the last fortnight, IOG has been forced to tear up its contract with Gazprom. In a short announcement last week, management broke this news. It also expressed confidence in securing replacement sales agreements.

My view is that this is an understatement. European countries are heavily reliant on the import of Russian gas. I feel that IOG should be able to secure a great deal in the market to replace the Gazprom contract.

Production risks

IOG is in the progress of commissioning its three Phase 1 fields and the gas is due to start flowing later this month.

Not being an expert, I’m not 100% clear about how long gas prices will remain at record levels, but in the short term at least, I would anticipate that the IOG share price will continue to benefit.

But I will be keeping a close eye on company announcements. Gas development is a complex business — particularly in the harsh offshore environment. Any technical delays may cause investors concern and could put downwards pressure on the share price.

There may also be risks in holding this stock for the long term. The current energy crisis will pass and the world will revert to its migration towards low-carbon energy generation. I’m also concerned that the share price may suffer from ‘ethical’ funds shying away from fossil fuel stocks.

A strong partner in Berkshire Hathaway 

Yet my overall confidence in IOG is also bolstered by the fact that CalEnergy (an offshoot of Warren Buffett’s Berkshire Hathaway empire) is its joint venture partner in these developments.

With such a strong ally, I take the view that financing is unlikely to be difficult to source. This bodes well for the company’s strong pipeline of further projects in the Thames catchment area.

All things considered, I am confident about the future for IOG. My hope is that future production announcements will bolster the share price and I will be looking to add to my holding in due course.

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Fergus Mackintosh holds shares in IOG. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

After a turbulent week in global markets, it’s clear that inflation is only likely to worsen in 2022. Exiting investments and sitting on cash is an easy way to lose real value. So, I’m opting to prop up part of my portfolio with three of the top-yielding UK dividend stocks.

With prices rising at their fastest rate for 30 years, a perfect storm is coming closer. Inflation is expected to exceed 7% in April, while UK pay packets will be further eroded by increased national insurance, higher mortgage rates and spiralling energy costs.

As an existing shareholder of tobacco company Imperial Brands (LSE: IMB), I’d already been seduced by one of the highest dividend yields in the FTSE 100. At its current price of 1,465p, the company offers an expected yield of over 8%, beating inflation forecasts.

The recent dip in its share price may be a further buying opportunity for me, although Imperial isn’t immune to the effects of war in Eastern Europe. Around 2% of its revenue comes from Russia and it also employs over 600 staff in Ukraine.

Unloved by many financial institutions that are unwilling (or unable) to invest in so-called unethical businesses, Imperial has a solid business model and is likely to maintain high dividend payouts. I’ll be adding to my holding in due course.

Undervalued dividend payer

In a very different field, M&G (LSE:MNG) is also a big dividend payer (its yield is close to 9% of the current share price). I was curious to understand why the company appears undervalued at present.

Obviously the asset management business in the UK is a highly competitive sector. Market leader Legal & General Group manages over three times the volume of assets that M&G does. Consolidation in the sector has also dropped the company down the rankings in recent times.

Nevertheless, consensus forecasts provided by analysts in February show expected operating profits close to 2021 numbers and a slight increase in the dividend is forecast for the year ahead. 

It remains to be seen how the conflict in Ukraine will affect the investment sector. Indeed the rising cost of living could well force some investors to draw down their pension pots.

Cash is however losing value at its fastest rate for 30 years, so I expect asset managers such as M&G to continue to perform well. If the company weathers the immediate market turbulence, I will be looking to buy this stock.

Cash-rich housebuilder

My final pick is UK housebuilder Persimmon (LSE:PSN) whose dividend yield currently sits at around 10%. 

The Persimmon share price has suffered significantly over the past 12 months. In fact, it has fallen from a high of over 3,272p to around 2,314p at present. Obviously, rising mortgage costs and inflation may well dampen demand in the housing sector.

Looking forward though, I take comfort from the healthy financial position of Persimmon. In its recent results,  the company posted full-year profits approaching £1bn. It also has a healthy cash buffer of £1.246bn and forward sales of over £2.2bn. 

As a mass-market builder, Persimmon will not be immune to short-term market shocks. Its focus on energy-efficient new homes at the lower end of the price spectrum should however favour the company going forward. I like its healthy dividend payout as a hedge against spiralling inflation and will be adding this share to my portfolio.

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Fergus Mackintosh currently own shares in Imperial Brands. The Motley Fool UK has recommended Imperial Brands. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

On the back of basic fundamentals, BP appears to represent good value. At the current share price of 385p and its dividend yield of 4.15%, it would seem to represent a good hedge against rising inflation. The stock is also trading at a competitive price-to-earnings (P/E) ratio of 14 times, with analysts generally expecting stronger results for 2022.

Management also seems confident that BP is undervalued. In the last financial year, BP dedicated some $4.15 billion of its own money to a share buyback programme. This move should enhance future returns to shareholders and support an increased dividend pay-out in years to come.

On an operating level, BP has made substantial strides in recent years to move away from its heavy dependence on hydrocarbons into a more diversified energy business.

The oil and gas business has been streamlined heavily and is now focused on high-margin production. In the short term, this is likely to contribute positively to the bottom line, reflecting the surge in oil prices over the past two years — although current price levels are unlikely to be sustained.

Of the risks to BP, I am a most concerned about the elephant in the room — namely, the company’s investment in Russian gas producer, Rosneft.

The contribution of Rosneft to BP’s profit figures last year was in the region of 10% and I am worried that the uncertainty regarding “tit for tat” sanctions between Russia and the West may have an impact on these numbers in 2022.

Other concerns include the ongoing reparations for the Gulf of Mexico oil spillage back in 2010. BP is committed to an 18-year compensation package, with $1.8bn alone set aside in 2022 for these payments.

On the bright side, the investment BP is making into low carbon energy, such as solar, wind and hydrogen, makes it one of the most proactive oil producers in terms of transformation towards the future of world energy production.

I have a very upbeat view on the potential combination of low carbon hydrogen and renewables as a practical way of accelerating the reduction of vehicle emissions — and I believe that BP will be well placed to capitalise on these changes.

In the short term, though, whether we like it or not, the world is not yet ready to depend completely on low carbon energy. BP recognises this, but at the same time it is making big steps to get its own house in order. Cost savings of $2.5bn last year and an $8bn debt reduction will make it fitter for the future.

All things considered, of all the major stocks in the oil and gas sector, BP is the most attractive for me just now.

Whilst I am positive about growth in the share price, in the short term I will be sitting back to watch how tensions in eastern Europe play out before investing.

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Fergus Mackintosh has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

The recent collapse in the share price of tech stocks has caused many to fear that the bubble has finally burst for the FAANGs. With this in mind, I was curious to understand whether indeed tech stocks are over-valued, and if the recent market slide might be a buying opportunity for me?

Looking beyond the popular consumer-focused companies, I set out to identify three listed technology stocks that manage to combine a mature business model and strong competitive market position.

Broadcom (NASDAQ: AVGO) produces many of the “nuts and bolt” components that power our technology devices.

Its share price currently sits some 15% below recent highs and the company has provided investors with stellar returns over the past five years.

This is no “newbie” company, though. Its heritage goes back to 1999, when Hewlett Packard chose to spin off its semi-conductor division as Agilent Technologies.

After more than 20 years of acquisitions and growth, Broadcom now generates annual revenues of around $27.5bn and has consistently increased both profits and margins in recent years. It is also pays out a regular dividend, which (at a yield of 2.8%) is not to be sniffed at in this sector.

Possible headwinds include continued supply chain issues and accusations of anti-competitive behaviour both in the EU and US.

However, I think that the market will shrug off these issues and, with estimated earnings of around $33 per share this year — at a price-to-earnings (P/E) ratio of 17.5 — Broadcom looks an attractive buy to me.

Another major player in the worldwide semi-conductor market, Dutch company ASML Holding (NASDAQ: ASML) was similarly affected by recent global supply chain issues, as well as a damaging fire to its Berlin manufacturing plant at the turn of the year.

These issues are likely to have a knock-on effect to the output of certain chip products that it supplies around the world – most notably where it holds a virtual monopoly in certain niche product areas.

The company has, however, put in place a plan to hire an additional 35,000 workers in 2022 in order to reverse its sales decline and to meet demand, which is running at up to 50% above current capacity.

These operational issues have led the market to hit the share price hard, and ASML now trades at around 25% below its 52-week high.

It will take some time for this company to restructure itself for the future, but I take comfort from the fact that it has good products that are in demand. On this basis, I am confident that ASML is a good bet for the long term and I will be adding some shares to my portfolio at $662.

The last of my three picks is chip maker Qualcomm (NASDAQ: QCOM). This is a company that has powered the evolution of mobile devices and smart phones for many years now.

Over the last three years, Qualcomm has demonstrated impressive profits growth, while at the same time reducing its heavy debt burden. Interest rate rises will be a worry for the future but, at $166 per share, Qualcomm is trading well below most analysts’ expectations.

With a forecast P/E ratio of just over 14 times, I believe that this stock offers good value and has more to give.

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Fergus Mackintosh does not have a position in the companies mentioned. The Motley Fool UK has recommended ASML Holding and Qualcomm. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

The much-talked-about return to “value” stocks is a popular trend, and I decided to take a good look at some of the largest companies around the world – and in particular FTSE 100 shares that could be a good refuge for my portfolio in the dark days to come.

The first shock for me was to find out that so few of our prized UK companies are relevant in a global context. Out of the top 100 listed companies in the world (by stock market value), only four are found within the ranks of the FTSE 100.

Even these four have slightly tenuous links to the UK.

Banking giant HSBC (LSE: HSBA) moved its headquarters to the UK back in 1993, while Shell moved from the Netherlands only last month. AstraZeneca, of course, has a strong UK presence, but Linde has its origins in Germany and the US.

Changing the goalposts and looking at the same top 100 by earnings, only a slightly better picture emerges for the UK. Linde drops out, but HSBC, BP, Liberty Global (LSE: 0XHR) and AstraZeneca all figure in this league table.

This is clear evidence that the UK has lost out during the tech boom over the past 25 years, but perhaps this is what may make our shares a better refuge for the tough times ahead?

According to Bloomberg, the FTSE 100 currently trades on a price earnings ratio of around 16 times and has a dividend yield of around 3.3%.

This appears better value than the US markets — with the tech-heavy NASDAQ 100, for example, trading at over 33 times earnings. This looks pricey, at a time when questions are being raised over the future growth in profitability of some tech stocks.

Of the UK “refuge” stocks available, I particularly like the look of HSBC and Liberty Global.

With a trend of increasing interest rates, banks will (as in previous cycles) surely benefit, and strong full year 2021 results are forecast to be reported by HSBC later on this month. It should, however, be noted that this strong rebound in performance will be due to a degree by the release of large credit provisions, which were put in place by the company during the early stages of the pandemic.  

Liberty Global, in my opinion, has a strong business model and I like the way it is investing heavily in its key markets.

Management clearly think it is undervalued and have committed up to $1.4bn to a share buyback programme in the 2021 financial year. Liberty’s commitment to fixed and mobile communications convergence is something I’ve bought into on a personal basis, and the operator of the Virgin/O2 platform in the UK looks a good future bet.

The telecoms sector is, however, extremely competitive and other players, such as Sky and Vodafone in the UK, will need to be watched carefully.

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Fergus Mackintosh does not have a position in any of the companies mentioned. The Motley Fool UK has recommended HSBC Holdings and Vodafone. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Whilst Buffett invests predominately in US companies, the same approach can be applied to some leading UK stocks. Here are three FTSE 100 companies that I will be adding to my own portfolio.

Amongst the rapidly evolving UK business and domestic delivery sector, Royal Mail (LSE: RMG) is positioned as the only universal delivery operator, providing mail delivery, as well as parcel delivery and logistics services through its Parcelforce and GLS Systems divisions.

Unlike its new streamlined competitors, Royal Mail is distracted to an extent by legacy issues. Its attempts to focus on the growth of its GLS Logistics division are well founded, but at the same time it also needs to reduce its cost base, with over 700 managers currently set to leave the company as part of an estimated £70m restructure.

Revenues last year fell by 2.4% and performance in recent months has been impacted by issues including staff resourcing (due to the latest Covid variant). It is, however, worth noting that these revenue numbers were still ahead of pre-pandemic levels.

Despite these headwinds, management appear to be making progress and at a price-to-earnings (P/E) ratio of 8.6x, the share price may have been overly castigated. Although not without downside risk, this is a business where I believe Buffett would also see value at 441p.

Bunzl (LSE: BNZL) is a quiet giant, whose myriad of consumer products are used worldwide on a daily basis. It is a global leader in the supply of packaging materials, although the bulk of its profits are generated in North America and European markets.

There is, however, a lot more to Bunzl than just packaging, and its diversified revenue base is evidenced by the fact that a whopping 64% of its total revenue is now generated from other products.

I like the fact that Bunzl is at the forefront in the supply of recyclable and compostable packaging. This means that it has limited exposure to the tough new regulations on consumer items, such as single-use plastics, whilst the company is working hard with customers on transitioning their other products to sustainable materials.

Threats include global supply chain issues, rising raw material prices and spiralling fuel costs.  I have confidence, however, in Bunzl to ride out the storm, and at 2,744p it appears good value to me.

Another company investing heavily in the future, BT (LSE: BT.A) is attempting to shrug off a period of lacklustre performance over the past five years.

The shining light for the future appears to be its Openreach fibre business, which is gaining clients at pace, on the back of substantial capital investment (£1.2 billion in the last reported quarter alone).

Across its UK consumer businesses, levels of customer retention and the quality of its EE mobile network are further positives, although the disappointing performance of its Global business has been a drag on results and could continue to weigh on the share price.

Billionaire investor Patrick Drahi, with a 12.1% stake, appears to have a positive view on BT and this is mirrored by analyst forecasts.

At a price of 199p and a P/E ratio of 10.5x, BT seems good value to me.

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Fergus Mackintosh has no position in any of the shares mentioned. The Motley Fool UK has recommended Bunzl. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Avoiding the airlines, I was curious to see whether there were other investment options to take advantage of the return of leisure travel. What about the airports and train stations themselves?

For anyone who has plucked up the courage in recent months to book an air ticket, don a mask and head off to warmer climes, it will have come as a shock to see what has happened to our busy airports.

The days of crowded bars, restaurants and lounges are a distant memory. It is more likely that travellers passing through the UK’s regional airports in recent months will have been greeted by vacant spaces, apologetic notices on the doors of closed food outlets, and small groups of passengers discreetly attempting to avoid each other.

My own recent experience at Gatwick was, however, a little more encouraging. Whilst the cavernous South Terminal remains as a mothballed shell, the buzz at the North Terminal was definitely more upbeat. This gave me some encouragement about the sector’s ability to recover its mojo by the time summer rolls around.

For me, an alternative option for exposure to the sector can be found through SSP Group (LSE: SSP), one of the leading worldwide operators of travel food concessions, to be found in multiple airports and railway stations across five continents.

In 2019 SSP was flying high, with its share price in excess of 600p and profits of over £200m. A year later, however, the company’s activities had been decimated by the unforeseen impact of Covid’s first wave.

Management have nevertheless shown resilience and utilised government support, in the form of furlough payments and emergency loans, to tide them through the worst of the pandemic. Negotiations with landlords and a successful rights issue in April 2021 allowed them to reduce leverage and re-position the business for the post-pandemic period.

A recent trading update — on 4^th February — informed us that trading in the company’s main markets (UK, Europe and North America) had regained ground, to between 63% and 79% of 2019 levels. Nearly three quarters of its total outlets are now open again, and there are plans for new expansion. Some of these new opportunities are likely to be taking advantage of the failure of other operators over the past two years.

The company is projecting a return to 2019 trading levels by 2024 and I like the fact that its portfolio of brands is focused on the leisure (rather than business) traveller.

Whilst I don’t believe that shares will return quickly to their 2018/2019 levels – and there remains a risk that new coronavirus variants might emerge and delay the world from travelling freely again – I am confident that SSP has strong upside potential over the next 12 months.

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Fergus Mackintosh owns shares in SSP Group. The Motley Fool UK has recommended SSP Group. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Clarkson (LSE: CKN), a worldwide leader in shipping services, has quietly gone about its business of keeping world trade moving for the last 170 years, but until recently it was a business that I knew little about.

A Christmas conversation with a friend, whose son had recently started work in London as a trainee shipbroker, was my entrée to Clarkson. Before looking at the inner workings of this company, though, I thought it best to understand a bit more about the notable current challenges facing the shipping sector.

Why is there a supply chain crisis?

Prior to the Covid-19 pandemic, the spat over tariffs between the Trump administration and the Chinese government had already caused significant volatility in worldwide trade. The subsequent impact of Covid-19 was immediate and hard hitting.

Overnight, the demand for fossil fuels collapsed, leading to the incredible short-term reality of negative oil prices. Tanker ship contents were unsaleable and market players rushed to offload these cost-sapping cargos.

Surprisingly, though, as the full effect of the pandemic began to bite, there was a sudden increase in demand for consumer products worldwide, as locked-down populations changed their behavioural patterns.

Spending on services — such as travel, hotels and restaurants — obviously collapsed, but home-based consumers soon ramped up demand for hard goods, such as electrical products and homeware materials.

A fall in manufacturing capacity and the available resourcing of ports and shipping led to the perfect storm – resulting in the lengthy delays we now face in securing that new car or television.

With all this volatility, is it therefore a good time for me to invest in the shipping sector?

My immediate thought is that such volatility means that it is an area surely best avoided at this time. Some further research of Clarkson, though, demonstrated just what a robust operator this company is and piqued my interest further.

The company generates around 75% of its total revenue from shipbroking services and has been able to maintain consistent performance throughout the pandemic. It is also no slouch in embracing new sectors, such as the supply and development of the offshore renewables business, which bodes well for the future.

Clarkson looks after both its staff and its shareholders. Bonus payments are high and dividend payouts over the years have typically ranged from 65% to 75% of its total available earnings. The company does, however, retain a substantial cash buffer, allowing it to maintain its commitment to increased dividends in leaner years.

A short trading update issued in January mentioned that the company expected its underlying profits for 2021 to exceed £69m (50% higher than comparable 2020 numbers). On that basis I expect that its earnings per share will exceed pre-pandemic levels, and that the dividend payment will be comfortably increased for another year.

Going forward, I believe that Clarkson will continue to be a market leader in the shipping services sector. However, with an estimated price-to-earnings (P/E) ratio in the 20s and a dividend yield of around 3%, it’s not cheap at 3,260p.

Whilst I trust in management’s ability to maintain dividend payouts for the foreseeable future, I think I will wait a while longer before looking at this stock again.

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Fergus Mackintosh has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

However, despite an impressive track record – IP Group has played an integral part in the establishment of over 300 companies, with nearly £1bn of its own money directly invested – why is it that the share price of this FTSE 250 company has suffered so much over the past six months?

From a high of over 155p in September 2021, its shares have now fallen to less than 93p at the time of writing, valuing the company at approximately £984m. Notably, this is very close to the cash cost of its investments over the past 20 years, and substantially below its last reported net asset value (NAV) of 135p per share. 

A recent financial update (posted on 13^th January 2022) painted an upbeat picture, with an anticipated FY21 NAV of over 165p, full year’s profits in excess of £425m and a cash buffer of £256m.

At 20 years old, the company is well past the stage of being a new kid on the block, and a look at its regular RNS announcements shows a solid track record of achievement. These include a number of lucrative exits in 2021, as well as the impressive IPO of Oxford Nanopore (“ON”), one of the first companies identified by IP Group for investment back in 2005.

The big question is, therefore, why the slide?

Well, clearly this is something the company’s board don’t understand either. Since the middle of last year, they have dedicated a war chest of some £35m to a continued share buyback scheme. The management clearly believe that there is substantially more value to IP Group than the market is recognising.

Possibly the perception is that IP Group is too heavily reliant on its investment in ON, and it is true that even after a 30% slide in the share price of ON during January, IP Group’s holding in the company is still worth over £250m (or around 25% of the current market cap of IP).

The reality does appear to be different, though. A well-diversified portfolio of over 30 companies has the potential to continue the company’s established track record of development, growth and exits.

Perhaps it is also the lumpy and less-than-transparent nature of these revenue streams that causes investors to shy away. This is maybe the reason that IP Group has started to pay a dividend over the last year to win back confidence. Expect this dividend to grow if full-year profits meet current expectations.

One should not forget as well that IP Group’s activities now include a solid bank of complementary revenue streams, including the separately managed private Venture Capital Fund and the well-respected EIS manager, Parkwalk Advisers (acquired in 2017), with over £400m under management.

I keenly look forward to the release of its final results in March, but in the meantime — since I’m prepared to assume a little risk — there appears to be substantial upside to this misunderstood sleeping giant, and I’m strongly considering buying more of the shares for my own portfolio.

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Fergus Mackintosh owns shares in IP Group. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.