A decent week for The newspaper and ShareHUB picks. Markets are inches from all time highs and we are only just into Q2. The mood music has changed significantly since the darker days of Q4 2018. A lack of interest rate rises (forecasted) from the Fed Reserve have certainly helped as has progress on China / US trade wars albeit ‘verbal’. US elections are still some 18months off but it’s already pretty apparent that Mr Trump’s tweeting appears to have been culled or watered down. Next he’ll be slimming down Boris style?
The next 3 months should be fairly active for the markets before the usual summer lull period kicks in. For commodity focussed stocks, the summer months tend to be the best time to get the drill bit out (depends what part of the world you are in of course) and that normally bodes well for investors looking for exposure to high risk reward opportunities. From the ShareHUB picks, PetroMatad is set for an exciting exploration phase beginning in July with Heron-1 and Red Deer-1 wells. Amerisur Resources should have one or two wells in play on the CPO-5 licence (30% interest). CERP should be approaching drilling in the SWP region although an update/RNS is expected later today (PM) so clear guidance should be forthcoming. With Oil prices looking firm, the high debted plays like PMO, ENQ and Tullow are looking less risky and more attractive by the day. Earnings from all 3 have been impressive and defied a market that seems overly pessimistic on the sector. It could be that low hanging fruit with less risk (eg FTSE100) is where the funds prefer to be for now, as growth rates have been impressive in 2019 as witnessed by the newspaper picks which are both showing heathly gains and notoriously aligned towards bluechip picks. Overall, markets are surprisingly quiet in terms of volatility. Which means one thing…watch out for the next shake coming as the Algos/black boxes make more money from volatility than they do from mill pond ripple free markets.
Week 15 positions: