2014 Hotlist – Final Results

trophy Week 52 of 2014

Well – that’s that for 2014. The US Dow, S&P and far east markets seem to be celebrating another boom year courtesy of free QE hand outs. The FTSE 100 had a mixed year. Flirting with new highs but not quite managing to punch through the magical 7000 level. The Index finally closed out 2014 at 6566 down from 2013’s 6749. Netting a loss of 183pts on the year or circa 3%. In stark contrast, The S&P broke record after record as did the DOW. It was a year of record breaking highs for the US markets. Europe wobbled, not once but twice and with Greek elections due next month (Jan) it could be on its way to being booted out of the EU. Merkel and Mario may have to strike a new deal but that’s a story that can wait for next year.

A virtual portfolio has been set up using the 2013 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. Two newspaper top ten picks for 2014 have been included to help monitor/compare against.

Week 52 stock picks performance review:

The winner for a 3rd year on the trot is the Independent Newspapers 2014 top ten picks. A big well done to the Telegraph picks which despite ending in the red, notched up 5 out of ten positive stocks picks in 2014. Surprisingly, The Independent’s picks came in with only 4 out of ten positive performers but with the help of a near 1 bagger in Man group, the overall gain for the picks ended in the blue. The commodity focused Hotlist took a right good beating as OPEC delivered a hammer blow which even Santa couldn’t overturn. It brings a 4 year bear run in the sector to its lowest levels in over 5 years since the world was nigh post Lehmans. Is it really that bad? For some small minnows with large assets but no cash flow, it’s becoming a tough battle to hang onto equity value without having to give the lions share of interest away in exchange for debt/cash injections. Some 1P reserves (Xcite Energy) are priced at around $1.50pb (based on market cap) when they should be nearer $20pb. The latter number was perfectly acceptable back in 2012 when Oil was not a country mile away from where it is today.

Whilst the commodity heavy Hotlist 48.6% loss is heavy, it did outperform Schroder’s Global Small Cap Energy Fund which finished down 50%. The  International Oil & Gas Technology Investment Trust took a beating too, closing down a whopping 67%. Brutal stuff for the energy sector. Unlike the funds and trusts, the ShareHub’s Hotlist is not traded during the year. Getting rid of under performing stocks and bringing in new stocks can refresh and bolster a folio/fund.  A liberty the Hotlist cannot benefit from. What is picked in early Jan remains until end of Dec. This is in keeping with newspaper/press top ten picks for the year ahead.

Missing factors of note in 2014 was surprisingly M&A and major exploration discoveries. Too many dusters and too few major asset/farm in deals. If the commodity sector is to turn a corner next year, then M&A is going to be the most likely candidate. Unfortunately, with prices so low at present, many asset rich stocks like Afren and Xcite might end up with offers that are a long way from NAV’s or average industry value. That said, for any newbies entering stocks today, multibaggers could be aplenty while for many long term holders – searching for break evens would be a good result.

The ShareHub’s Hotlist picks for 2015 are complete and will be announced in the next 1 to 2 days.

Final 2014 standings / Week 52 Results

1. The Independent’s Top Ten 2014 +4.17% (Weekly gain of 1.27%)
2. The Telegraph’s Top Ten 2014 -2.69% (Weekly gain of 1.80%)
3. TheShareHub’s 2014 B-List -27.88% (Weekly loss of 0.08%)
4. TheShareHub’s 2014 Hotlist -48.68% (Weekly gain of 0.89%)

Click on Portfolio image to enlarge:Independent Final Winner!Telegraph FinalTSH B-list Final 2014TSH Final 2014

2014 Hotlist Results – Week 51

Week 51 of 2014

Bouncy bouncy castles. It’s not a casino out there – it’s a fairground. DOW down from 17800’s to 17200 in a matter of days only then to bounce back to 17800’s a few days later. Oil dips below $54 on crude only then to test $60 48hrs later. It’s bonkers. Too many autobots, black box instruments – you name it, the hedge funds are playing it. I’m not it matters any more what the equity or company is doing business wise – they could be horses on a track or dogs waiting in the traps. There’s nothing wrong with a bit of volatility, the markets like it best when there are some sizable swings. But recently (last 3 months) we’ve seen the DOW dip from 17800 to test 15800 and then again 17800 to 17200 and back. It’s like getting 3 or 4 years index % performance in a week! Unfortunately it doesn’t look like these rollercoaster days are the exception – they are now becoming the norm. Investors are leaving the markets in their droves as the animal or beast that it has become is now so out of control that it’s virtually impossible to make any informed investment decisions on a fundamental stock specific basis. There are opportunities of course but it takes an animal to know an animal. Not all are cut out for these casino like gyrations. A recent media agency cited the wild swings in the Oil price as being down to ‘short covering’. If that is the case, then what is the real market price for Oil when you strip out these casino style bets? Should the Oil price be something that is shorted or played with by Hedge funds? Surely a commodity that is so important to the world should be based on pure supply and demand rather than speculators out to make a quid via shorting. Where would the Oil price be today if shorting was banned on Oil? The counter argument to shorting is that it drives liquidity. That’s nonsense and doesn’t wash. Bit like the excuse with regard to Bankers bonuses. Apparently if they don’t get the large bonuses then they’ll (the apparent ‘talent’) go elsewhere. Well – let them go. Give the opportunity of jobs to a new level/type of person – one that is not driven by ridiculously high bonuses. Perhaps then, the wild speculation will cease and the casino may return to looking more like the market of old? Markets adjust and liquidity is just fine without shorting. The swings in price might be a lot less too – that won’t please many but perhaps this valuable black gold is not something that should be played with or available to abuse? Billions of dollars of projects are being shelved at present, jobs lost and oil focused companies slaughtered. It’s fair to say that consolidation is often helpful and can support stability in the future, but this needs to come from ‘market supply/demand’ not from shorting or manipulating Oil prices for a period of time.

Whether the current oil crisis is short term or longer term, one thing is sure… as each project is shelved, that supply in the future is parked or gone. The lower oil price only serves to ironically boost the oil price in the future. OPEC are not the only ones involved. US and Russia have both increased output of late. Both should reduce output at the same time as OPEC rather than expect OPEC to carry the can. A global effort is required – it’s not just about a cartel.

The reality is… supply and demand are at odds presently, but not perhaps as poor as the Oil price suggests. Remove shorting and prevent Hedge funds from abusing the commodity and you will then get a feel for the proper market price. That’s not going happen anytime soon, but something needs to be done as the future looks very uncertain if the manipulators involved are able to influence the price so easily.

A virtual portfolio has been set up using the 2013 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. Two newspaper top ten picks for 2014 have been included to help monitor/compare against.

Week 51 stock picks performance review:

There’s 2.5 trading days left next week and then another 2.5 trading days the following week before the FULL and final results for 2014 are in. With trading likely to be on the thin side, stocks could see further rises as the usual autobots and general casino that is the market goes on holiday early.

It’s going to take a huge transformation in the Telegraph’s top picks to give the Independent picks any last minute scares. The latter looks set for another win – making it 3 on the trot. Despite the mini bounce across a few commodity picks, the sharehub’s commodity Hotlist looks set for the wooden spoon again. Commodities have not been liked by the market for over 4 years now and if bearish cycles take between 5 to 6 years on average, then it might not be too long before the Commodity Hotlist is topping charts again.

With many commodities beaten up and at low levels, investors are spoilt for choice when it comes to undervalued stocks. But some will perform and recover faster than others and some may not survive lower priced oil periods if protracted.

2015 is a new year and the sharehub will be issuing new stock picks ready for Jan 2nd open.

Current standings / Week 51 Results

1. The Independent’s Top Ten 2014 +2.90% (Weekly gain of 1.37%)
2. The Telegraph’s Top Ten 2014 -4.49% (Weekly gain of 2.40%)
3. TheShareHub’s 2014 B-List -27.80% (Weekly gain of 4.74%)
4. TheShareHub’s 2014 Hotlist -49.57% (Weekly gain of 2.74%)

Click on Portfolio image to enlarge:Independent Week 51Telegraph Week 51TSH B-listTSH Hotlist Week 51

2014 Hotlist Results – Week 50

Week 50 of 2014

There’s a war going on out there and the weapon being deployed is OIL. And what a weapon that is. It’s now a ‘game’ of tolerance or pressure testing. How low does Oil have to go before Putin folds or the Iranians agree to reducing their Nuclear program? How low does oil need to go before US shale producers rollover?

$50 or $40? Barely a month into the OPEC induced crisis, and Russia is already wobbling. Interest rates doubled from 8.5% range to 17% in a matter of days. And that’s with OIL at $56 range.

What’s next? Well, there is a theory that says you don’t need to do more damage to your opponent or opposition when they are already floored on the canvas. Why risk breaking your hand if your previous jabs have already landed. It wouldn’t be a surprise to see OIL edge back to $60 if only to see how Russia and Iran fare then but over more prolonged period such as 2 to 3 months. The balance is a fine one, but with OPEC not due to meet again until July 2015, time is on the Saudi’s and US’s hands.

A virtual portfolio has been set up using the 2013 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. Two newspaper top ten picks for 2014 have been included to help monitor/compare against.

Week 50 stock picks performance review:

With 2 weeks left (or 1 .5 weeks) the Independent looks odds on to secure another win making it 3 on the trot. It’s clinging on to positive ground and should it remain in the blue – that’s pretty impressive performance with the very rocky end to the year. It’s been terribly ugly for commodity stocks. After 3+ years of declines – the heaviest of blows seem to be landing now. Corrections and panic situations like these happen very rarely in the markets. Perhaps once,  twice or three times over a 5 to 20 year period. But as history shows… OIL always bounces back. $30 in 2009 became $130 just a year or two later. It’s painful when it happens but when the turn or rebound comes – it’s a rollercoaster of joy. But it’s not for the faint hearted. Losses today could be profitable positions in 2 or 3 years time. That said – I fear there are many investors out there that have had enough and will not come back to the markets ever again. Does that bother the market? Absolutely not. In fact, after a period of low risk stocks being bloated on QE rounds, it’s fortunate to say the least that sector rotation could see many II’s jumping back into commodities when they are at their very bottom. What a perfectly timed rotation. So whilst it is dark out there at present, the next bullish commodity cycle might not be that far away. Stocks like Afren, Tullow and Xcite etc have all fallen by huge numbers. Tullow was 1600 and is now 380. Afren was 160, now 35p, Xcite was 400p+ now 30p. When the recovery comes, many of these stocks are going to rise 5 fold. Multi-baggers will be aplenty. And some cases of admin and insolvency will be around too as not all will survive this rout. A catalyst is needed as always and that should come via M&A. Consolidation cannot be far away now as it’s more risky/expensive to explore than it is to buy reserves off the shelf via the stock market.

Companies like Xcite, Afren, AMER, Circle Oil, PVR etc should be high on shopping lists. When the first batch of M&A filters through, the rest should correct fast based on sentiment alone.

When will that happen? That’s the magic guessing game. 2015 or 2016? Most think H2 2015. I think the first predatory offer could come as soon as Q1 2015. Ophir have already taken the plunge for their preferred target in Salamander but that deal is yet to close. Terms were agreed quite a few weeks ago before the crisis kicked in with full force. Deals have already collapsed as seen by Dragon walking away from PCI.

The new hotlist picks for 2015 will be issued on Jan 2nd. At current low prices, it’s vital to seek out the stocks that will or should rebound the fastest when the turn comes. Some stocks are more likely to see takeover offers than others. Some are too burdened by debt to progress other assets and may have to part sell licences or farm out.

Have you already identified your top ten picks for 2015? Get prepared, there’s only 2 weeks left.

Current standings / Week 50 Results

1. The Independent’s Top Ten 2014 +1.53% (Weekly loss of 3.72%)
2. The Telegraph’s Top Ten 2014 -6.89% (Weekly loss of 6.33%)
3. TheShareHub’s 2014 B-List -32.54% (Weekly loss of 4.05%)
4. TheShareHub’s 2014 Hotlist -52.83% (Weekly loss of 11.43%)

Click on Portfolio image to enlarge:Independent Week 50Telegraph week 50TSH B-list week 50TSH Hotlist week 50

2014 Hotlist Results – Week 49

Week 49 of 2014

Short and Sweet – Results for week 49

A virtual portfolio has been set up using the 2013 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. Two newspaper top ten picks for 2014 have been included to help monitor/compare against.

Current standings / Week 49 Results

1. The Independent’s Top Ten 2014 +5.91% (Weekly gain of 0.66%)
2. The Telegraph’s Top Ten 2014 -1.15% (Weekly loss of 0.69%)
3. TheShareHub’s 2014 B-List -27.40% (Weekly gain of 0.09%)
4. TheShareHub’s 2014 Hotlist -44.55% (Weekly loss of 3.15%)

Click on Portfolio image to enlarge:Independent week 49Telegraph week 49TSH B-list week 49TSH Hotlist Week 49

2014 Hotlist Results – Week 48

Week 48 of 2014

As the DOW heads higher into unchartered waters, 2014 looks set to end another good year for the Major Indices. Quite remarkable when you take into consideration the weak economic outlooks. But QE has fuelled an equity rally that just keeps on going. Stimulus may have ended in the US, but Eurozone looks ready to act and japan has already pulled the trigger. China is tentatively heading towards more easing. All of this could extend equities into the blue again in 2015.

As suggested lasted week – OPEC was the key event and boy oh boy did they surprise the market. The majority of analysts had plunged for a small cut – hence when the status quo was called. the market reacted like a school kid who’s just had his/her sweets taken away. We’ve seen these market tantrums all too often these days. Whether it is ahead of the FED Reserve minutes or ahead of Interest rate decisions, the market always seems to spiral into a mini panic. I say ‘mini’, as the last time the DOW wobbled it saw the 17350 level turn into 15850 levels in a matter of days (mid Oct). But as if by magic (or Japanese QE) the market bounced back stronger than ever before. That’s like an extra 10% growth in the DOW ticked off in 2014.

With markets showing more and more volatility and greater swings – questions seriously need answering about Black boxes, High frequency trading, BOTS etc. These are tools of the market that now drive such extreme conditions. It’s putting normal investors off investing as it’s about as far removed from equity fundamentals as you can get and better suited to Casino’s. Times are changing – that’s for sure.

The next few weeks and months leading up to March 2015 should deliver the data or signs that OPEC are looking for. With Iranian Nuclear talks set to move towards a formal agreement stage in Spring – most would be looking for signs of stability in the oil price after that period.

Finally – with many Oil companies are historic lows based on assets, M&A looks a certainty. Talk of BP and Shell hooking up might be premature but the idea of cost savings and a more streamlined business makes pretty good sense in a market where margins are shrinking by the minute.

Stocks that may be attractive to larger fish are players like Afren, GKP, XEL, COP, AMER and PMO. Ophir’s move for Salamander is a guide to appetite which could accelerate over the coming months.

With Autumn statement and Scots vote out of the way – a renewed verve in the North sea should be on its way as players can at last plan with some certainty.

A virtual portfolio has been set up using the 2013 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. Two newspaper top ten picks for 2014 have been included to help monitor/compare against.

Week 48 stock picks performance review:

The Independent looks odds on to secure another win making it 3 on the trot. The Telegraph needs some Santa rally magic to give it a chance of making a come back. Something special from its ten picks is needed and fast. The commodity heavy TSH Hotlist took another beating after OPEC’s decision to play chicken with the international / global markets. Time will tell whether they called it right but for now it’s hurting just about any company that has production or even future planned developments.

Current standings / Week 48 Results

1. The Independent’s Top Ten 2014 +5.25% (Weekly gain of 2.77%)
2. The Telegraph’s Top Ten 2014 -0.56% (Weekly gain of 1.64%)
3. TheShareHub’s 2014 B-List -27.49% (Weekly loss of 1.53%)
4. TheShareHub’s 2014 Hotlist -41.40% (Weekly loss of 1.71%)

Click on Portfolio image to enlarge:Independent Week 48Telegraph week 48TSH B-list Week 48TSH Hotlist Week 48

2014 Hotlist Results – Week 47

Week 47 of 2014

Chinese rate cuts and more signs of stimulus coming from the ECB saw US Indices leaping to new highs. The Dow closed at 17810 up 175pts on the week and its highest close ever. The FTSE 100 added 97pts to close at 6751 which is still some distance from its all time high. Will it top 7000 before the year is out?

All eyes turn to the main event set for thursday as OPEC meet and decide whether to cut back Oil output and bolster the OIL price. The Saudi’s are up against it as major players like Iraq, Iran and Russian all need oil prices higher. Iran are set to conclude talks on Nuclear program on Monday and if all parties are in agreement, then sanctions could be lifted. On Dec 3rd, Osborne is set to announce the Autumn statement which should include some tax breaks and incentives to get the flagging north sea industry back up and running after one of the worst years for decades on production and of course tax receipts. Then – there’s Dec 8th/9th deadline for Baghdad and Erbil to agree a budget for 2015. If the two can agree a deal, then it could add further pressure to oil prices as more volumes hit the market.

Hence – if you are focused on commodities and especially OIL/GAS, then the next 1 to 2 weeks should prove to be very meaningful. Whenever catalysts like these appear – be prepared for some volatility as the market (Casino) does like an ‘event’.

A virtual portfolio has been set up using the 2013 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. Two newspaper top ten picks for 2014 have been included to help monitor/compare against.

Week 47 stock picks performance review:

The Independent storms back into positive ground after spending the majority of the last 6 months in the red. The Telegraph is not far behind but it’s looking pretty solid from here on for the reigning champions. COme top this year, and that’s 3 years on the trot. Very impressive stuff.

The Hotlist is a commodity heavy pick list and hence is bearing all the scars of a beaten up sector. But after 3 years now of being ‘beaten’ up, perhaps it’s time for a change in direction in 2015. The sector needs some meaningful M&A to help kick re-ratings off and if share prices continue to fall, then surely some larger players are going to find it hard to resist.

Watch out for HUR, SXX, PVR, LOGP and XEL as all head towards news sensitive periods which could involved transformational farm in talks. In SXX’s case, crucial planning approval stages are now heading into the decision in ‘weeks’ rather than months zone.

Current standings / Week 47 Results

1. The Independent’s Top Ten 2014 +2.48% (Weekly gain of 3.08%)
2. The Telegraph’s Top Ten 2014 -2.20% (Weekly gain of 1.43%)
3. TheShareHub’s 2014 B-List -25.96% (Weekly gain of 0.29%)
4. TheShareHub’s 2014 Hotlist -39.69% (Weekly loss of 0.88%)

Click on Portfolio image to enlarge:Independent week 47Telegraph week 47TSH B-list week 47TSH Hotlist week 47