A disappointing week for TheShareHub top ten picks. Thus far, updates from Petra Diamonds, Hummingbird Resources, W Resources and more recently Columbus Energy Resources have all been well below expectations. Not surprisingly, each stock has been treated to the normal heavy handed market treatment. PDL has improved of late after proving that bigger stones can be found using the current mining strategy. If they continue to deliver some whoppers the market might begin to wake up and buy back into their recovery story. At 19p, the share price is off 17p lows but a fair distance away from the 50p+ seen last year. HUM’s update was nothing short of ‘awful’. Yanfolila began life on time and on budget. Since first gold pour, it’s been downhill and downhill fast. Problems with resources, grades, infrastructure (bridges), mine stability and local artisinal workers have all led to HUM’s decline. Poor management decisions have not helped either. HUM will be praying the ‘wet’ raining season is kind this year as last year was horrific. It could take a few quarters yet before recovery signs are seen. And finally onto, CERP. The company delivered an update which investors had been waiting some 6 months for. News on the SWP drill arrived but disappointly looks considerably watered down. Big prospects and deep wells now look more like shallow/mid prospects and a single well at best. Production is down from 1000bopd to roughly 650bopd. That was a shocker and there’s no way the CEO can dress that failure up despite trying too! Mr Koot is beginning to lose some shine but for now Schroders seem to be keeping the faith with him. The next update is likely to be around M&A with a possible transaction taking place in South America. It’s unclear how this will be funded and investors are beginning to tire of the constant share placings and subsequent dilution.
Following on the dilution theme, W Resources seems to be intent on issuing shares like confetti. The CEO continues to dilute smaller investors and is showing no signs of letting up. Business progress has been slower than expected and investors are being penalised for managements inability to deliver the project on time and on budget. Harsh but fair. There’s no sugar coating performances or news here on TheShareHUB. Unlike other blogs, TheShareHUB is not paid or ‘lunched’ in return for spinning glorious/favourable reports or articles. If it’s bad, it’s bad. If it’s good it’s good. There are plenty of catalysts / news drivers coming in the future which can drive share prices higher across TheShareHUB picks so lets hope we have got all the bad news out there now and can look forward to some improved updates across the top picks list. Near term, Amerisur Resources looks the most likely stock to make a significant move providing the drill bit delivers the goods of course. Watch out for SOL-1 spud news which looks likely for next week based on previous Indico-1 well/rig preparations.
Week 16 – Review:
The Independent newspaper picks continue to perform well bolstered by major Indices performances. Commodities have been slow to adjust to the bullish Oil market and Gold’s recent wobbles on lower risk backdrop has not helped either. Slowing global growth fears continue to hold many O&G and Miners back. There are plenty of reasons to see the DOW top off and return back to 24k levels and not many bullish catalysts to see higher highs. The Algo bots make more money from volatility and it’s heading towards that period where if major Indices can’t push higher, then may as well push them lower and go again? That’s been the theme over the last 12months. Sell in May? That’s one to ponder.
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.
Short and sweet this week. Oil moving higher, Oil focused Equities following. Goodness me, it’s almost as if the markets are working properly. All eyes were on OPEC next next week but it now seems that they have decided to abandon plans for April 17th meeting and push it back to June 26th. That date might change too, so pencil it in!
Week 14 Review: The Independent picks are top of the pops this week. The Guardian has made a solid recovery from a slow start to the year and is now firmly in the race. TheShareHUB picks have been more volatile with 4% to 5% weekly swings. With commodity prices looking solid for the rest of the year, TheShareHUB top ten should begin to retain those gains and push on higher. Wishbone and PetraDiamonds are weighing on the broader folio’s performance while PetroMatad is single handedly keeping things looking healthly. For many stocks, drill / exploration catalysts are key and many of these are due to kick off in Q2 and Q3. Watch out for CERP’s Q1 performance and general update due next week. The stock has bounced back strongly over the last few weeks and investors will be hoping for confirmation news on exploration well plans in the SWP region.
A quiet week all round. Markets continue to tip toe to all time highs without the usual media fanfare. Quietly does it… and hopefully no one will notice! That’s probably the best way to go because if there was ever a time for markets to be heading to all time highs, NOW would most certainly NOT be that time. US growth is slowing. China growth is slowing. Trade talks are drifting along. Brexit is drifting indefinately. The EU are economically on their knees (just look at the numbers coming out of Germany) and yet they seem to be keeping a cool poker face in all of this. The reality is, they need the UK more than the UK needs them. You wouldn’t know it listening to Barnier and Tusk. The EU is in big trouble and as this game of chicken nears the end, another surely begins. The only way to get a deal done that suits the UK is to set a deadline for the EU and change the table of events. If Brexit talks 2.0 begin with a new deal to be discussed, then a deadline has to be written in stone this time. No one gets to move it and only then will you get a result that suits both.
Week 13 Review:
Amerisur Resources surprised the market with a duster at Calao-1x. It was exploring the South West area of the Indico-1 discovery and quite ambitious based on location. Had they drilled a little closer to Indico-1 (SW) they may have had greater success. It’s no surprise to see the company moving towards this strategy with the next well which is cited as Indico-2, an appraisal well which should be low risk. Across the rest of the folio, AMER is making progress with workovers and boosting production in the process. The drop in share price looks a bit knee jerk rather than well founded and a recovery should be expected especially with the bumper filled 2019 operational plan. Investors will not be bored with this company especially with potential predators sniffing around the licence blocks. AMER will announce FY results on April 9th.
Petra Diamonds has been in the wars of late with lower revenue numbers and a share price that has halved since Jan 2019. Recent success with some gigantic sized diamond discoveries seem to have been batted away with the usual market nonchalance. I suspect a few are NET ‘short’ and are in no mood to change direction yet. A few more large discoveries and that mindset will need to change. At 18.5p, PDL are looking very cheap. Debt is a concern but recent falls look overdone.
PoO’s inevitable rise back to the $70’s is upon us. OPEC are due to hook up for a review in 2 weeks (April 17th) and if they maintain cuts or even increase them, then PoO could be off to the $80’s again. Higher prices bodes well for the high debt E&P’s. Tullow, Premier Oil and Enquest have all done well of late. Although the latter is still trading where it was when PoO was in the $40’s which is puzzle. Concerns over Kraken continue to grow and the company needs to ensure that performance this year is kept to guidance. Anything under guidance and the market may well crucify ENQ regardless of PoO prices.
Roll on next week and ISA season. New allowances will be available from April 6th. Buy selectively and always consult your broker regarding potential timeframes. It’s a busy period for many but usually calms down pretty quickly after the initial wave is done. Sometimes, it can be beneficial to wait for the dust to settle but always invest/trade to your own strategy and if unsure consult a regulated FCA advisor.
Good performance from TheShareHUB picks boosted by the recovery of CERP.L which has been long overdue. A minor pullback across the major indices has seen the DOW, S&P and FTSE all drop off from their 2019 peaks. This has dented performance across the newspaper picks which were doing very well since the year commenced. As highlighted before, end of quarter trading (particularly end of UK tax year) tends to be a bit choppy with volume and direction picking up from April 6th with minor dip for Easter period. Then comes the summer drift months and a return to action come St Legers day and the usual bonus ticking run into Christmas period. Of course, it’s not always that predictable but at present with the Fed Reserve seemingly happy to sit on their hands through 2019, markets have very little impetus or fear to trade with or against. US/CHINA trade talks drift along. Brexit drifts along. Global growth stutters and yet all through this markets trade like a finely tuned autobot algo. Is anyone actually out there? Hello?
Week 12 review: TheShareHUB picks take the lead (for now). It wasn’t that long ago that PMO was trading like a Brexit MP – Unwanted and quite frankly getting no where fast. The stock is now up over 50% from lows seen earlier in the year. There should be more to come from PMO in 2019 and many other ShareHUB picks should soon be budding into the warmer spring climate. Results season has already kicked off with Enquest and PMO reporting solid progress. This will keep senior debt holders happy and in Enquest’s case, buy some much needed time. Fears over debt defaults and covenant issues seem to have disappeared for now. Enquest have Magnus to thank for their survival and PMO have the EoN deal underpinning their recovery. Without these deals, both would have likely fallen into debt holders hands. Since the recovery years of 2016 to 2018, Oil has began to find a solid footing despite US shale production rising a further 15% to 12mbopd. Yet the all important M&A in the sector remains elusive. After Faroe/Ithaca deals over last 2 years, only Ophir Energy of late has succumbed to a cheap predatory approach. If the Oil market continues to stabilise then M&A should be alive and kicking again. The likes of AMER, PMO, TLW, ENQ and many others could all be of interest to deep pocketed mid tier players. Elsewhere across the miners, SOLG continues to attract interest and surely their days are beginning to become numbered. BHP and Newmont the likely candidates. SOLG will be keen for more time to prove up their world class assets but in this market, time is not something that comes along for free. SOLG will soon be faced with a decision to make regarding future development plans and subsquent funding. In reality, the prospect of seeing the assets through to production based on a 100% interest looks impossible. It’s a big boys project and deeper pockets are required to help fast track development/production in a way that pleases all stakeholders including the Ecuadorian Government.
Spring is in the air and commodity focussed stocks are beginning to look a little more sprightly. Premier Oil is showing signs of strength again as higher oil prices and strong production make for an excellent combination. Investors are still a tad wary over a potential big purse acquisition as per newspaper article some weeks ago linking PMO to Chevron north Sea assets which are up for sale. Oil prices continue to stabilise after the rather idiotic fall to $43pb on WTI some months ago. The market doesn’t seem to do ‘sensible’ anymore. It’s either extremely positive or negative with not much inbetween. That said, while Trump and China dot the i’s and t’s on a trade deal, the broader market looks content to just trade in a tight range. Gold and metal prices have pulled back a little on growth fears and risk reduction. Miners are struggling to make headway especially the minnows. Some early producers have lost momentum. WRES and WSBN, both part of the ShareHUB top ten for 2019 are suffering from delays and slow newsflow. Unless good news is forthcoming, the drift will continue for these two although both look quite cheap at present and a bounce would not be unexpected providing further warrants are not issued.
Earnings season will soon kick off again as Q2 is just weeks away now. For many stocks, it’s a period of wrapping up the figures for 2018 and looking forward to 2019 progress. Whilst historic (as we are already 3 months in) FY results provide investors with a fairly good idea of cash balances/debt and whether any funding is required going forwards. It’s probably been around 6 months since the last meaningful update (interims) so that’s a long wait for even the most patient investor.
Just 2 weeks to go before ISA season is up and running again with new allocations being available from April 6th. It’s always a good idea to check with your broker on timelines for getting ISA deals done and also contacting your tax advisor regarding CGT exposure/liabilities.
Week 11 Review: The Independent remains unmoved at the top. It’s much the same as last week. TheShareHUB picks should begin to accelerate as the drilling season (fair weather) approaches. CERP, MATD, AMER, PMO, SOLG to name a few from TheShareHUB top ten picks, all have eventful spring/summer operational plans lined up. Bodes well for an exciting Q2.