2013 Hotlist Results – Week 47

Week 47 of 2013

The big news was saved to the end of the week as late on Sunday a variety of global powers sat down with iranian counter parts and agreed a 6 month trial deal. I say trial – as it’s pretty clear that the next 6 months will be a big test of commitment from Iran. After years of sanctions, it looks like the squeeze has worked. How this effects the region is yet unknown but certain sanctions being lifted will undoubtedly lead to economic benefits/transactions. This could cause OPEC some concerns until sure of where oil price / stability is heading. But with sources inside the US hinting that deal talks have been ongoing for sometime now with the iranians – one has to expect that all that needed to know – knew what was going on and have prepared accordingly.

The deal came just two days after the DOW had hit its highest level in its history. Closing the week above 16k is a milestone achieved but compared to the historical deals being struck in the middle east – it’s a footnote.

The Dow closed week 102pts up at 11065. The FTSE closed the week on 6674 down 19pts.

A virtual portfolio has been set up using the 2012 final trading day close figures as a starting point and £1000 has been invested in each stock. This does not include buying fees or stamp duty and is purely intended to be used as a benchmark or summary for each week. One newspaper top ten picks for 2013 has been included to help monitor/compare against. A pi ‘polled’ top picks list (from LSE bulletin boards) has been included this year.

Week 47 stock picks summary:

The LSE BB polled picks bounced back again – it’s like watching a yo-yo recently. If you feel you can trade it – then best of luck to you!

The Independent picks continued to move higher and if the traditional santa rally occurs – then a 50% (half bagger) is on the cards. It’s needs just over 7.8% gains to do it. Quite a stunning return and off the back of last years juicy gains too.

The last 5 weeks of trading are upon us and companies/investors will already be thinking about what 2014 has in store. With QE3 due to be tapered soon, it’s certainly not going to be as wholesome as 2013.

The market will need to adjust to the new format of having to work harder to grow money – no more freebies means that growth will be harder to find. In normal circumstances – a switch from blue chips to higher growth stocks would be nailed on. But with the recovery still early and banks ability to expose themselves to risk considerably reduced – it could mean a slow and luke warm switch. That said – prices in many small caps have been smashed down to very low levels – lower than 2009 in many cases. Hence – entry levels are certainly at the lower end of the risk scale compared to circa 3 years ago.

Stocks to watch out for towards year end are the following; GKP – Court case finale nears with hearing on 13th. Whilst the result is pretty much confirmed already by the judge, the appeal process is unclear. The latter could tie the company up for a further month or two which could hamper progress near term on a number of levels. But that said – the iran deal and increasingly positive political backdrop and progress of exports via Turkey should see a strong end to 2013 for GKP holders. Another stock with big news coming is Beacon Hill. As highlighted last week, the stock is at lows due largely to one player shorting the stock before agreeing an option price on convertible loans – tut tut. The FCA really ought to clamp down on this type of abuse as it’s tantamount to manipulating the market to suit another financial product which they will benefit from. BHR are due to approve the convertible loan notes on Dec 4th and thereafter potentially reneg and sort their senior lenders notes. One would expect the sp to recover quickly once the ‘players’ involved have got their options prices sorted and debt managed.

Finally, XEL has been looking lively recently on decent volume. News that Statoil have shelved or parked Bressay licence perhaps suggests that wider plans for a JV or major rethink of FDP of Bentley and Bressay is underway. There could be huge cost savings made if both got together in some form or another. So whether it’s a farm in deal, or a full takeover – one thing is sure, XEL have 250mmboe in reserves and that kind of number attracts the majors. It’s huge and if full price is paid circa $15pb, XEL stock could be in for a significant rise. However, timing is unclear and statoil could take their time in finalising their plans / discussions with DECC. And in this market, if news looks 6 months away, then the sp normally gets hammered as many leave for entertainment / growth elsewhere. Bowleven is a good example of this.

Current standings / Week 47 Results

1. The Independent 2013 +42.22% (Weekly gain of 2.87%)
2. TheShareHub’s 2013 B-List +12.92% (Weekly loss of 0.17%)
3. The LSE BB List 2013 +8.48% (Weekly gain of 5.64%)
4. TheShareHub’s 2013 Hotlist -25.67% (Weekly loss of 0.23%)

Click on Portfolio image to enlargeIndependent Week 47 TSB b-list week 47 LSE BB polled picks week 47 TSH Hotlist week 47