ShareHub Hotlist 2019 Review – Week 02

It’s taken just under 2 entire years to get to the point whereby a deal is presented to parliament to vote through or vote down. There doesn’t appear to have been many intricacies. The hurdles that remain now were known and would have been known pre referendum. There are about 3 paragraphs below that you can’t see because they’ve been deleted. Why? Because i’m fed up with these bumbling fools. Can we have a referendum and do away with MP’s entirely? I have no interest in discussing this anymore and I’m sure the bulk of ShareHub readers are at wits’ end.

The likely impact on markets of Mrs May taking a kicking in Parliament later today is fairly minimal. The market has already forecast in a 99% chance of her deal being voted down. The timelines that follow are the unknowns. Will there be an extension to July? These are the key drivers for markets. Known dates and action required to deliver on these timelines. Is there time for a general election? Etc etc. Is there time for a second referendum? For the moment, the market is more concerned by US/China trade talks to take too much note of these bumbling EU/UK political Ouphs (sic).

Moving on (phew, that feels better already) markets have stabilised since the choppy sessions seen in December. Call it US tax selling, algo’s recalibrating, risk off trading or just some froth being removed, whatever it was seems to have calmed down… for now. China / US trade talks are a key factor in this quiet. It looks like it is heading for an amicable agreement. Add to this the US Fed Reserve seemingly changing tact from interest rate rises to status quo in 2019 and we might be ok for a steady year albeit some distance from previous Index highs.

When it comes to the Oil price, all eyes are on OPEC cuts. It’s all about implementation now and the market always errs on the side of caution when involving countries like Russia, Iran, Iraq and others. If OPEC and non OPEC stick to their pledges, then Oil supply/demand should rebalance within Q1. The average forecast for Brent by a number of industry analysts stands at $72pb for 2019. If Q1 averages around $65pb, then Q2 onwards needs to get a jog on. Hence, Brent at $80pb again seems the most likely event but don’t pen it in, just pencil it for now. Global growth is still a concern and over the next 6 months, we will all know alot more.

Week 2 Review:

TheShareHub top picks are having a strong start to 2019. Up 11.5% in just 10 days is a great growth rate. A number of top picks have plenty left in the tank and many haven’t got out of the blocks just yet. CERP delivered a decent update on ops hitting the 1000bopd year end target. It’s all about drilling in the SWP this year and if that goes to plan, then it could be the highest multi-bagger across the picks. Thus far, a corrective phase or recovery is underway with MATD after an update confirmed 2019 drill plans were on track. There is still some doubt to clear over rig operators/approvals and once this is done, the stock should continue to recover back to last years levels seen pre-Wild Horse TD circa 5p/6p/7p level. Upon success… much higher. No guarantees of course.

Amerisur Resources has a very active drilling period coming up with plenty of catalysts to fuel further share price growth. The Indico-1 discovery as well as the recent $93m Oxy farm out deal has yet to fully soak in with investors. Both events are potentially transformational and will fast track all ops across these assets. 2019 looks like being a very exciting year for AMER holders. Another stock capable of multibagging before year end. Elsewhere across the picks, it’s steady progress. The one stock lagging is wishbone which looks a bit under the cosh when it comes to warrants. Bit like WRES. These two have active mines but in getting to that position they also have past warrant issues to absorb. It might take sometime before these are cleared but once they are done, share price progress should be swift. Operational success is a must. Which brings me onto HUM. A nice recovery from 16p lows driven by good exploration results and a higher Gold price. Q1 numbers are not expected to be pretty after the poor ending to 2018. But look past that and things should get much better in Q2 heading towards the second ball mill installation planned for Q3/Q4 2019.

Finally, talk or gossip that Premier Oil are sizing up some North sea assets held by Chevron have put the jitters up investors. A cash call or rights issue may be required. A similar episode occured with Enquest last year, which like PMO have heavy debt piles to manage. It does seem an odd time for PMO to seek such a bold asset acquisition and with debt falling at a faster pace, investors would have prefered a higher share price level if equity is indeed part of the acquisition package or deal mechanics. Ironically, if Premier Oil walk away with no deal, the share price should jump 10% or 20%.

Mmm sometimes ‘no deals’ really can add value.

Roll on week 3.

TheShareHub picks 2019 – week 2
TheIndependent picks 2019 – week 2
TheGuardian picks 2019 – week 2