These two Winter Portfolio stars rally again

Interactive Investor's annual seasonal strategy, our Winter Portfolios, winds up on Friday, bringing to an end another hugely successful six months. They've beaten the market every year since inception three years ago, and 2016/17 looks like being the best yet.

We'll publish final performance data for both the 'consistent' and 'aggressive' portfolios next week, but, in the meantime, a pair of constituents has made a final push to extend the substantial lead over the FTSE 350 benchmark index.

Croda has been a star performer in the basket of reliable shares, and it's risen in value between the end of October and end of April every year for over a decade.

The Yorkshire-based FTSE 100 firm, which uses natural oils to make ingredients for everything from make-up and anti-wrinkle creams, to industrial lubricants and packaging, grew sales across the board during the first quarter.

Of course, Croda generates most of its revenue overseas, so translating money made in foreign currency back into weak pounds and pence was a huge benefit to both the top and bottom line.

Sales soared 19.6% at the core business in the three months to March - up 19.3% at the personal care division, 26.5% at performance technologies, and 11.4% at the smaller life sciences business. Industrial chemicals rose 15%, giving 19.1% and £365 million for the group.

A late Easter was helpful, too, although even if you strip out the massive currency benefit, total sales still grew by 4.9%. Overall, margins at the core business was "strong and stable", meaning profit growth met expectations.

Following final results in February, UBS analyst Andrew Stott said the shares would be worth £40. They're up over 5% Wednesday to a record high at 3,875p. Good call.

And even after today's rally, Croda shares trade on around 22 times JP Morgan's upgraded earning per share (EPS) estimate for 2017 of 171.5p. Yes, that's still a premium to peers, and further strength in sterling is a concern, but Croda has historically commanded high multiples in return for great cash generation, sector-leading return on capital, strong pricing, defensiveness of consumer care and market share.

Irish building materials colossus CRH, in its second year as an Interactive Investor Winter Portfolio stock, is having another crack at all-time highs, too. The firm, which bought Tarmac from Lafarge in 2015, has tried a failed a handful of times to make a break above £29 stick.

At £28.91 currently, it might struggle again, although Donald Trump could be the company's best friend if he does get funding for $1 trillion of infrastructure projects. After failing to overhaul Obamacare, Trump must get tax reform past Congress, or risk a reputation for disappointing on big policy promises.

First-quarter results were "satisfactory". Mild weather meant business was booming a year ago, but CRH still grew sales this time by 4%, or 3% like-for-like. Cash profit in the "seasonally less significant first half" is tipped to beat last year's €1.12 billion, driven by the Americas.

Bosses also predict "further progress" in the bigger second half, worth €2 billion of profit last year. Watch for "modest improvement" in Europe and growth in the US to easily offset price competition in the Philippines.

A forward price/earnings (PE) ratio of 18 for 2017 is hardly cheap, but forecast double-digit earnings growth justifies a premium. Analysts at Investec Securities say it's their "preferred way to play US construction and would argue there is limited speculation of a "Trump infrastructure stimulus" within the price".

There's also talk that recovery potential in Europe is being overlooked.

This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.