No Pain No Gain: I'll take a risk on a one-time portfolio winner scoring again

I have this week recruited Wyatt, a little-known risk management consultancy, to the no pain, no gain portfolio. It is an offbeat, highly speculative share, not the type of investment I would recommend to anyone who wants to restrict their shareholdings to more established elements of the stock market.

Yet it is, I think, worth a flutter. Its record is short and its shares (like most, big and small) have not been spared in the great sell-off. But the stock market atmosphere should improve and a fledgling such as Wyatt, which seems to have found a rewarding formula, could be the sort of share to attract attention.

The company is in the Bob Holt stable. Long-standing portfolio followers will know Mr Holt is the chairman and creator of the portfolio's most successful investment, Mears, the support services group. Its shares have enjoyed a staggering run, climbing from 10p to top 100p; they are now 78p.

With Mears jogging along without a care in the world – profits this year should hit £5.1m, up from £3.6m – Mr Holt, a former chief executive of Tottenham Hotspur, has embarked on other ventures; Wyatt is the one that captured my attention. It is intent on creating a range of on-line risk consultancies. Firesmart, offering fire-risk advice, was the first. It was profitable soon after Wyatt got involved. Similar ventures, in other fields, are being developed. The company also has a 25 per cent interest in Audio Medical Solutions, which should have moved from break-even to profit.

As befits a small start-up, Wyatt has enjoyed its share of stock-market rumours. There has been talk of reverse takeovers and various other deals. Although Mr Holt has put through a few successful acquisitions at Mears he is not a serial predator. Indeed, he appears to be a selective, demanding bidmaster. So corporate action may not be high on the Wyatt agenda.

It should announce year's figures within months. At the halfway stage it was, largely due to Firesmart, in the black, producing a modest £25,000. It is thought to have traded profitably in its second six months, although an aborted acquisition charge has to be accommodated. I suggest the risk-reward ratio is attractive.

The shares arrived on the stock market two years ago; they have been around 66p. The price is now 27.5p, adding up to a capitalisation of only £900,000. Earlier this year the shares were down to 25p, prompting Mr Holt to buy 200,000, lifting his stake to 13.1 per cent. Another director, Reg Pomphrett, picked up 136,000, also at 25p.

I do like to see directors backing their companies with their own cash. It usually indicates a financial commitment – as well as confidence – which is far more convincing than any public relations-inspired chatter which often beguiles investors. By climbing aboard the Wyatt bandwagon I am, unashamedly, banking on another Holt winner. Last summer, when I decided the portfolio should lock in its substantial Mears profits, I did doubt whether the company's impeccable progress could continue. It has. And its main occupation – keeping local authority and housing association properties up to scratch – seems to be one of those simple, easy-to-miss but winning activities. Perhaps, like specialised risk consultancy.

Wyatt is my second recruit after the departure of Six Continents. Two weeks ago I enlisted Glisten, a confectionery group. I was, again, retreading old ground. Glisten's chairman is Jeremy Hamer, a leading light at Inter Link Foods, the cake-maker that was another star portfolio performer. It, too, continues to do well with profits of £3.9m expected in the year just ending and £5.5m in the following year. I trust the Hamer touch will be repeated at Glisten.

I believe the long share slide is over. We have enjoyed the sudden, breath-taking upsurge. From now, I expect a steady but continuing improvement that could take Footsie to around 5000 by the year-end. There is even talk that the Boots pension fund, the first major player to quit equities, has commenced bottom-fishing.

Other funds will be looking at the high yields, often excellent dividend cover as well as attractive earning ratios now on offer; such bargain valuations will disappear when shares start to recapture their old appeal.