M&G's Dobell: My five key stock picks for 2012

Tom Dobell, manager of the £7.2bn M&G Recovery fund has rejigged his portfolio extensively since the financial crisis to take advantage of opportunities as they emerge.

Of a total of 96 holdings in the fund, Dobell has bought 34 since the start of 2009 as he adjusts his holdings in the aftermath of what he calls the global financial crisis "mark I".

The top performing manager - who has returned 52.9% to investors in the last three years compared to a UK All Companies sector average of 41.2% - has recently been adding to a number of these positions as he prepares the portfolio for 2012 and beyond.

Below are some key stocks in which he has increased his weighting.

BP

Having backed BP in the aftermath of the Macondo disaster, the stock is now the largest absolute holding in Dobell's £7.2bn recovery fund after he added to his position over the autumn.

The manager now holds 100 million shares, worth £470m and equivalent to a 0.5% stake in the company.

"The cashflow and the quality of assets are compelling, and the legal situation [regarding Macondo] is being contained," Dobell said.

"They have done everything they possibly could to contain the damage, which is a great credit and compliment to them. Additionally, the oil price remains well above BP's breakeven point. We remain extremely convinced of its turnaround potential."

BSkyB

Dobell held 9.5m shares in BSkyB at the end of June 2011, prior to News Corporation withdrawing its bid for the broadcaster following the phone hacking scandal.

The manager added to his holding in the autumn, though it remains a relatively small position in the Recovery fund at under 2% of the portfolio, and said the withdrawn bid was a blessing in disguise.

"The failure of the News Corporation bid was a blessing, because the price they offered was too low. BSkyB has excellent operational performance and is returning cash to shareholders.

Dobell also believes the argument over corporate governance surrounding News Corporation deputy COO James Murdoch's position on BSkyB's board is "entirely missing the point", and said he remains very happy with the broadcaster's management team.

Stobart Group

Dobell has also added to his holding in haulage company Stobart, and now owns around 12% of the company, a position worth just under £50m. He is a believer in the management abilities of CEO Andrew Tinkler.

The company is most well known for its haulage capabilities but Dobell believes its ownership of Southend airport, purchased by the company in late 2008, is a key asset.

"The airport is one of its assets we are extremely interested in - Southend airport will prove a gateway for the Olympics next year. Stobart has extremely capable management and is one I believe has been overlooked," Dobell said.