ShareHub Hotlist 2019 Review – Week 22

A better week for TheShareHUB picks with PetroMatad notching up ‘2 x Multibagger status. The stock looks odds on to deliver a 3 bagger and possibly a 5 bagger should they deliver with the drill bit this summer. Plenty can go wrong so always huge risk with explorers. But the chance of success looks higher than previous wells so it’s fair to expect the market to build a little more into the pre TD pricing compared to last year.

It’s been a tough 6 months+ in the markets across commodity focussed stocks. Miners have been shunned. Oil stocks ignored despite a stronger and more stable Oil price. Large debt weighted companies like Tullow, Premier Oil and Enquest are all making inroads into paying down debt whilst also maintaining capex. The latter is important as if you don’t invest in the future, you’ll end up with depleted reserves and falling production curves. The key for debt heavy plays is to strike a steady balance between, debt reduction and capex. Premier Oil and Tullow appear to be doing this faster than Enquest and have more depth in the folio’s when it comes to resources and exploration. M&A has gone a bit quiet since the last large deal involving Occidental and Anadarko. The acquisition ‘ink’ might remain dry until clearer signs can be seen on China/US talks. Talk of the Fed Reserve cutting rates should support equities near term but to make significant progress, trade talks really need to be settled.

With June upon us, the official ‘summer drill’ season is here. There are plenty of stocks out there drilling big targets in 2019. It’s a small window for north sea focussed companies as drilling in the winter is dangerous and can be expensive. Hence, any delays to drill plans can often push campaigns back by 12 months. So one lesson for keen investors to learn is never ‘assume’ the drill bit will be turning until the company finally confirms the official spudding event. In many instances, promised spud dates tend to be too optimistic and are often a few weeks delayed or in the case of PVR (announced this morning) delayed by up to 2 to 3 months+.

Elsewhere across the ShareHUB picks, SOLG were under heavy fire from shorters and nervous investors when news materialised last week suggesting that their licence blocks could be under threat. The share price fell from 36p to test 24p in just 2 days. Losing around £160m off your market cap based on nonsense news sums up the markets today. Too many Bots and Algo’s chasing price changes and paying zero attention to the validity of news. It’s more and more like a casino/bookies out there today. Currently the SOLG price is back to where it was at 34p/35p level but still some 10p off previous 2019 highs.

Week 22 Review:

The ShareHUB need a few summer drills to come up trumps if they are to catch the Independent top picks. With AMER, MATD and SOLG all with or about to kick off big drilling campaigns, the chances are one or two will deliver the goods… one hopes!

Finally, the second Heads up of the year was issued exclusively to email subscribers yesterday. The full note on ‘I3 Energy’ (i3E) will be issued next week to all readers. Target Price 120p.

And last of all… hot off the press this am, Goldman Sachs have issued an Upgrade to Petra Diamonds moving the stock to a BUY recommendation and price target of 32p. The stock was last trading at 21p. PDL is part of TheShareHUB 2019 top picks.

As with all stocks/information mentioned above. Please read the risk warnings in the sidebar.

Independent top picks 2019 – week 22
Guardian top picks 2019 – week 22
ShareHUB top picks 2019 – week 22