ShareHub Hotlist 2018 – Week 1 Review

A short week due to the Bank Holiday and relatively quiet on volumes as many market participants had yet to return to their desks. For those that did bother to turn out, it was a very rewarding week. Major indices surged higher, commodities in demand (again) and market tones bullish across the board.

Unfortunately for TheShareHub 2017 picks, the commodity rally did not arrive early enough to erode losses. As one ShareHub reader observed… it’s a little unfair to base individual stock performances on a 12 month calendar year and instead stocks should be viewed over a 1 to 2 year or even 3 year period. That’s all fine and investors should not see the new year as catalyst to rotate all stocks out the folio. For the top ten picks competition, it is imperative that stocks are based on the new trading year – simply because that’s the challenge. Pick ten winners for 2017 and then do the same for 2018 and so on. For added interest, it’s an opportune period to toss out some underperformers and replace with some potentially more interesting plays which may have lower or higher risk attached and deliver lower or higher gains. The main point to any top ten picks or folio is to get a decent balance between some high growth prospects mixed with medium growth and then lower safer plays. Adding in one or two Gold Stocks is potentially a good hedge against traditional market volatility that can come after a period of continuous gains… like that seen on the DOW and DAX of late. Gold is often the go-to safety play when ‘things’ get a little less predictable or volatile, which makes Gold’s recent run up from 1220’s to 1320’s all that more interesting. When markets are punching out new highs and volatility is at lows, Gold would normally be left to drift lower, discarded like a kids toy which has lost its charm. So what’s driving Gold prices recently? Could some market players be taking positions ahead of some predictable volatility? With Brexit heading into the sharp end and Putin heading to the Polls in circa 12 weeks time, it’s probably not a bad idea to get some Gold hedges in place now rather than leave it too late. Historically, investors will trade Gold directly or trade it via exposure to Gold ETF’s or individual single lined Gold producing equities. For 2018, TheShareHub has picked out Hummingbird Resources and Cora Gold. Hummingbird Resources has recently moved from being an explorer/developer into being a producer. It’s early days in that respect so not unusual to see the market still applying a very low p/e to HUM. Once a few Gold sales are notched up, the earnings multiple should be nearer to industry based averages circa 5 or 10 x earnings. With a p/e near 2, Hummingbird clearly presents a great risk vs reward ratio for any investor looking to gain some exposure to Gold. At the other scale is Cora Gold. They have resources under their belts but need to get these proved up into ‘classified’ resources which can form a bases for a commercial development plan. Hummingbird currently own circa 34% of Cora Gold which makes it a double whammy for Hummingbird investors should the Cora Gold exploration phase go well. Results on the latter should be through in the next few weeks. The stand out point is that should Cora prove up strong resources, then Hummingbird/Cora can look to discuss ways in which the resources can be commercialised using Hummingbird’s Yanfolila processing facility. Both are certainly key stocks to watch in 2018.

Aside from Gold, Crude/Brent oil put in more gains after a strong end to 2017. Friday closed the week with two interesting events occuring which all PoO followers should pay attention to. First event was the official conversion of state owned Aramco into a ‘Joint-Stock’ company. This is a very significant step in the process towards the planned 5% Aramco IPO float which is pen’d in for later this year. Prior to this event, some doubts were circling on whether the Saudi’s would get this done or just walk away. London’s exchange (LSE) have already bent over backwards (literally) to tweak the rules so that Aramco can list on LSE exchange. The US is also flirting with the Saudi’s in hope they will bag the deal and elsewhere the Chinese are being very smart by getting their new Petro-Yuan launched which in effect unhinges the multiple decade long pegging of the US dollar to Crude. Changing of the guard? Possibly. But it will take sometime to see how this effects the US dollar and other Forex related trades. One thing is sure the Saudi’s will be mighty keen to see PoO steady in 2018 as ultimately any flotation will be dependent on market confidence as well as forward guidance.

The second event late on Friday was the US Rig count. PoO has been in the 60’s for a while now, yet against this higher PoO, US rig counts have actually dropped. Could this be seasonal? Or could this be the first sign that US shale investment is not as agreat as many would like us all to believe? Certainly one to keep an eye on as many Oil bears have said for a while now that higher PoO will simply result in higher US shale which in turn lowers PoO. The first part of 2018 should be quite telling as US data will be followed closely and for a change, the data should be fairly reliable as the majority of floating storage tankers have been docked and supplies long gone. Vitol and co will have to find the real black stuff direct from the market rather than relying on hidden supplies offshore to fudge the numbers.

Week 1 Review:

The Daily Mail (2017 champions) are back to defend their title. The only thing they struggled on in 2017 was finding 10 picks. Instead they opted for just 9. This year around, they’ve struggled again and have plumped for just 8 top picks. That’s not really in the spirit of the challenge and it’s a wonder with so many stocks out there – how can they fall short of picks? Perhaps they just fell short of stock pickers? This year, The Telegraph have been binned and replaced by The Guardian’s top ten picks. And as it’s the first week, picks from 2017 have been listed below for comparison just to see how the ‘rotation’ or ‘refreshed’ picks look.

TheShareHub top ten for 2017 put in the best performance rising roughly 9.25%. If the year was 53 weeks long, then the picks would be flat for the period. Not bad considering the picks were 24% down just a few weeks ago.

TheShareHub top ten for 2018 came in as the second best performer and tops the list for 2018 – but don’t get too excited… week 1 is notoriously strong. It’s what follows the weeks after that matters the most.

The Daily Mail top 8 (doesn’t sound right does it!) performed strongly again. It’s going to be a hard fought competion by the looks of things. The newboys… The Guardian top ten, delivered a decent 3%+ gain.

More coverage on individual stocks from TheShareHub 2018 list will be available as and when news floods in. If you want to stay up to the minute with updates, then use the side bar Email Subscription facility. You’ll need to confirm your email so please check your spam folders just in case the confirmation email is hidding away in there.

As a comparable – 2017 and 2018 picks below. The ShareHub 2017 picks ended week 52 9.75% down and by week 53 (or 1) is just 0.5% short of being positive.

Storming start to TheShareHub 2018 picks with a 7%+ gain.

Daily Mail 2017 picks finished the year 20.5% up and put in another 5%. 2018 picks performed slightly better with roughy a 6% gain.

And finally… the new boys