ShareHub Hotlist 2018 Review – Week 42

Musk gone quiet. Serena gone quiet and miraculously even Boris gone quiet. All seem to be learning from their mistakes and hunkering down away from the media limelight. Should be a quiet week then… until the unbelievable happens…the Saudi’s well known for there discreet way they go about things, step up to the plate with an outrageous fatal Tarantino style fumbled illegal interrogation of journalist Mr Jamal Khashoggi. Turkish President Erdogan is no stranger in dealing with difficult Journalists. Serena Shim (29 year old US Journalist) was suspiciously killed in a car crash in 2014 shortly after being threatened by the Turkish Intelligence services – according to some news wires. If this was down to Russia, then sanctions would be forthcoming. But this is Saudi Arabia. Huge billion dollar arms deals are done between UK and Saudi. Same to be said of US. Rolls Royce sell huge amounts of cars to the middle east and Saudi’s. The list goes on. Hence, the consistent approach would be to put sanctions in place on SA. Ban the US and UK from doing arms deals and prevent Rolls Royce (and other car brands) from selling expensive cars. Not going to happen is it? It’s times like these where the ‘double standards’ really begin to come out into the open. Saudi Arabia is a honey pot. The western business world (and China) swarms around sucking up the honey at every given opportunity. So the question that really needs to be asked is how far can the Saudi’s go before the business world stop swarming around the honey and the UK and US stop selling arms? That’s a worrying question indeed especially when you take into consideration the Saudi’s ability to simply turn the oil taps off. It’s times like these that you really begin to get a feel for world order or the lack of it!

Moving on… Trump will be chuffed that the media world is chomping away on Saudi Arabia when they should be splattering the media channels with smear stories ahead of the US mid-terms. Distraction is a wonderful tool isn’t it Mr Trump? Markets are beginning to look edgy and derisk as a bad result for Mr Trump’s party could mean difficulties ahead for the US in policy terms as the President’s power to push through key plans potentially hit greater resistance.

With Major indices wobbling around, the Gold stuff is quite rightly strengthening. As the year nears the end, Gold should see further strength as Q4 tends to be a strong period for the precious metal.

Equities look weak at present. Algo bot sell programs aside, margins and leverages are being tested. Overstretched investors often become forced sellers which in turn delivers a more widespread correction which effects commodity stocks even when PoO is at 4 year year highs.

Week 42 Review:

The ShareHub picks have done well to retain a decent growth rate in 2018. The newspaper picks often favouring safer bluechips are suffering along with FTSE100. The Guardian’s woes continue and the DailyMail picks look wobbly. Still 10 weeks left to go but at present the ShareHub picks look a shoe-in. HUM, AMER, and SOLG are all seeking to bolster resources through exploration programmes. Results from all three should be through before year end. CERP is increasingly becoming a stock for 2019. 2018 has been a year of sorting out legacy issues and getting acquisitions completed. The stock should exit 2018 with around 1000bopd which is double where it ended 2017. These cash flows should deliver a self funded high impact exploration programme in the SWP, Trinidad. Some serious resources to be tapped and with a market cap of £29m at present, there should be plenty of upside ahead for the patient investor. Amerisur defies belief at the moment and should regain some value once the large seller has been cleared. November could be the month for AMER and at 11p a share, there is potential to double on any Indico-1 drill success. No guarantees of course! Risks remain – please see sidebar for risk warnings.

ShareHub Top picks 2018 week 42
DailyMail Top picks 2018 week 42
Guardian Top picks 2018 week 42

ShareHub Hotlist 2018 Review – Week 40&41

After skipping last weeks review, week 40 and 41 team well as a ‘before’ the DOW wobble and ‘after’ the DOW wobble. I’ve said for a while now that ‘this’ market, ‘todays’ market, is not like that seen before. Volatility generates the big bucks and after a few weeks of the DOW creeping higher to punch out new all time highs, the algo bots decided it was time for a little shake up. And why not? The drop in January 2018 from 26500 to 23000 provided another significant profit opportunity or rinse and repeat. This time it looks like a drop from 26700’s to 25000’s might be sufficient especially with Mid term US elections around the corner. Afterall, what’s the rush, there are plenty of ‘rinse and repeats’ lined up in the months ahead. Since QE and 2009, the market has acted as a washing machine for FED Reserve, UK and EU printed cash to work its way back into the banks pockets. After a decade or so, the coffers should be getting near ‘comfortable’ levels and one assumes that once this has been done, the ‘throw them to the wolves’ mentality will be reintroduced. Like a F1 pace car, the FED Reserve and EU have been doing circuit after circuit, burning cash along the way but keeping the pack in track. When the pace car is removed, it will be interesting to see how the markets and banks cope. As most of you know, by design, the market will eat itself in an attempt to survive. Perhaps this time around, the global powers involved will make sure that this mentality is reduced. A starting point would be to get ‘shorting’ rules tightened up. The argument of liquidity and hedging is utter rubbish. Bit like the argument over huge salaries for bankers required simply to secure top talent. Not true. That’s made up by the market. There are plenty of very smart young banking execs out there which would happily work on salaries alone without bonuses. Putting that aside, back to shorting rules… here’s an idea… why not treat the UK AIM market as a haven for investment rather than a type of Ladbrokes (other bookies are available) environment. Yes, higher risk remains in these stocks but they need investment to deliver and if you don’t invest in the future, where’s the new innovation going to come from? So why not remove ‘shorting’ from AIM listed stocks. Let them trade based on merit or failure without the contrived shorting that often occurs ahead of placings or CB raises. Some will say, what about arbitrage? Come on… most of these high risk stocks are high risk for a reason. An investor knows the dangers involved. If the investor wants to manage the risk then do so using other tools in the market… not shorting the stock. Many will remember Xcite Energy. Over 300mmboe in reserves and yet approx £90m of debt could not be refinanced due to the fact that the very bondholders/debt holders involved had shorted the equity to almost zero. Is that the best way to boost UK Oil & Gas reserves? If more ‘helpful’ investment approaches were deployed, then perhaps the need to FRACK in the UK would be zero. The UK is not the wild west. It’s not like the US shale fields. It’s a country that is seeing its prized countryside turned into mini housing estates, farm land being sold off and food supplies dwindling. Now with oil prices rising, the UK looks set to be fracked again. It’s wrong and unnecessary. Instead, focus on boosting AIM listed Oil&Gas stocks. Ban shorting and strengthen governance. Strengthen communications. Remove licences and re-award them if left languishing. Generate jobs, skills and reduce reliance on imports. Not hard is it? With Brexit around the corner, it’s about time Blighty started acting like good old Blighty. Roll up the sleeves and get this country’s energy supplies supported with UK based firms. Avoid the Fracking.

Week 40&41 review:

As seen by the folio updates below, the DOW’s wobble was felt widespread. Quite unusual considering PoO and PoG both remained very solid. The latter has since put on 4%. To be fair, it looked oversold in the first place so hard to tell whether the move to safety can be confirmed. But the bounce is welcome and should markets take a breather in 2019 (as many expect) then PoG should continue to recover back to $1350oz or with a little wind in the sails, go on to test $1450oz.

Amerisur Resources (AMER) one of the ShareHub’s picks for 2018 confirmed an oil discovery from its Pintadillo-1 well. The well flowed 590bopd with decent 30.4api oil. The share price fell 25%. Odd isn’t it? This trend has been in place for some time now. The stock seems eternally weighted to the downside despite positive updates. The company is in a much better position today than it was in 2016 and yet the share price has fallen from 34p to 11p levels today. As PoO rises, AMER falls. It’s almost as if the algo bots have used AMER as a hedge to PoO. Buy crude and sell AMER. Buy Amer and sell crude. Daft as that may sound, the markets are far from functional or logical. Take another ShareHub 2018 pick like SOLG. Another stock in the doldrums. Added to the 2018 folio at 30p a share and within 8 months the stock was testing 20p. During this period the company issued mining/exploration updates that revealed the main assets resources were increasing. It was all good stuff. Then as if someone had swicthed off a black algo box by accident, the stock bounced off 20p and steadied itself at 24p. A few weeks later, BHP bought 6% equity in the stock for 26p. And a month or so after that BHP buys another huge stake for 45p a share. The stock doubles off lows to trade at 41p today. Boring boring drip drip boring for 8 months and then boom! Seen that pattern elsewhere? Get a feeling that something just doesn’t add up or make sense? Well, the chances are the stock is being manipulated. To suit a buyer? To suit a new equity raise? To suit an MBO? Speculation aside, it has not all gone swimmingly for AMER. The stock has underdelivered in terms of the promised exploration programme, but this is set to change with the second exploration well on the heralded CPO-5 licence. Indico-1 well is expected to spud within the next couple of weeks. That alone should be worthy of a 25% rise in the share price nevermind pricing back in the newly discovered 590bopd production. Watch out for news soon as something feels like it is brewing on AMER.

Further good news across the ShareHub picks have helped support gains for the year. Serica Energy confirmed that US sanctions on Iranian owned assets will not effect the business as many had feared. It could have been worse so Serica can count themselves lucky. Elsewhere, important exploration results are expected from HUM along with a slighly lower production count for Q3 as rainy season in Mali has a habit of making conditions tricky to mine at optimum levels.

Roll on week 42, it will be interesting to see how the ShareHub picks bounce back against a recovering or more stable DOW.

ShareHub week 40 2018
ShareHub week 41 2018
DailyMail week 40 2018
DailyMail week 41 2018
Guardian week 40 2018
Guardian week 41 2018

ShareHub Hotlist 2018 Review – Week 39

Week 39 slips by and still nothing concrete on Brexit just Boris blowing off. The man lost all credibility after the Heathrow debacle and yet he’s still spouting on like he believes he has an audience. I think best thing for the likes of Musk, Johnson and of course Serena is to hunker down and avoid social media or any kind of media for the next 6 months plus. The latter should apologise for unsporting behaviour. Smashing rackets, ranting and raving is not a good example for her young daughter to follow. King Federer (on and off the court) carries sophistication and elegance. A true champion and one of the greats. He’s a credit to the game of Tennis and Serena would do well to learn a few things from that master or perhaps follow the legend Borg and hang up the boots at the appropriate time.

The same could be said for the likes of Tusk, Juncker and Barnier. On the surface they play a good game, try and look sophisticated but behind the scenes there’s more precious items than rackets being smashed. It’s been a shambles. The youth of tomorrow will not be voting for these disconnected generations types that are out of touch with the real world. The EU’s mantra from the very beginning was one of ‘teach the naughty boy/girl a lesson’. If Brexit was a success then the fear would be that other countries would follow. Well, wake up Mr Europe… the world has already followed. Border trading has all but gone. The likes of Amazon, Google and Apple are digitally crossing your precious EU boundaries and taking huge chunks of revenue and paying close to nothing in tax. When the EU was set up decades ago, the internet was just a few bits of code in Mr Sutherland’s mind. The idea of common markets had a purpose. The EU had a purpose and it still does to some extent. But life and business has moved on. Tusk, Barnier and Juncker look like petrol guzzling cars in a Tesla world. The EU and UK ‘had’ a terrific opportunity to show the world that they can work together and adapt to changes… even big ones like Brexit. Together, fighting the likes of Amazon, Google, Apple and others is going to need cohesive planning. The focus should be firmly on how ‘all’ business is done in the context of borderless trading. It’s time to put the school room cane down and start leading by example… through a grown up and professional approach to Brexit. If that’s not possible, then postpone Brexit, boot out the fumblers and get some new fresh blood in to take a new brave road forwards into a world that is changing every day of the year.

Mini rant over, the markets in general are showing no signs of fears over Brexit or Chinese trade wars. Interests in Gold are near lows for the year which is odd considering Trumps control could be weakened dramatically over the next 8 weeks with Mid term US elections due. Gold tends to rally in Q4 and it certainly has plenty of scope for a bounce all the way back to $1300oz. Should bode well for sharehub pick hummingbird resources which is long overdue a recovery to mid 30p ranges based on projected earnings.

Oil focused stocks like Tullow and Premier Oil have crept up against a surging oil price. The last time Tullow was around 240p level, POO was trading at $45pb. Today POO is trading at $85pb (Brent) and Tullow is trading at 265p. 10% growth based on a $40pb increase? I think the casino needs the under-table magnets adjusting as valuations across many Oil focused stocks look hideously cheap.

Week 39 – Review

I mentioned a few weeks ago that I thought the ShareHub would double its 7.5% growth to 15% before end of the year. I didn’t think it would be so swift, but here we are with TheShareHub top ten pushing past 14% and above in week 39. With another 13 weeks left and little sign of the Saudi’s or Russian’s changing tact, 25% growth for the year is the new target.

Catalysts are loading up for CERP, HUM and AMER in Q4, so the ShareHub laggards should begin to contribute to the growth rate soon. Heads up picks, PDL and MATD have both struggled but look to have a decent amount of upside in the tanks assuming good news flows. MATD looks terrific value (6.2p) for those that like risky exploration plays. With a fully funded 2019 lined up and another 4 to 5 wells+, there’s more than enough excitement to provide a multibagging opportunity from there. No guarantees of course!

TheShareHub picks are trouncing the newspaper professional guru picks. Still a quarter to go, so best not get too cocky but it is looking like another great year. No multibaggers just yet but keep an eye on PVR and PMO. Both could notch up multibagging tags this year.

ShareHub Hotlist 2018 week 39
DailyMail top picks 2018 week 39
Guardian top picks 2018 week 39

ShareHub Hotlist 2018 Review – Week 38

US markets at all time highs is not really a surprise considering Mr Trumps upcoming mid term elections. He’s been constant with his view that the Stock Market is healthy under his guard so it would not be beneficial to him or his party if the market took a dive pre-elections. As highlighted before on TheShareHub, the markets knee jerk reaction earlier in the year to a Trade war with China was certainly a sign of common sense returning to the markets. 9 months on and the Trade war is in full swing. It’s no longer a possibility, it’s a reality. Yet here we are with the usual blatant ignorance being exhibited by a market that just doesn’t know when it’s too hot. Some steam will need to come off at some point soon but I doubt it will happen until after the US mid terms. Bonus season and the usual Santa Rally might keep things frothy for a few weeks after but come 2019, it’s likely to be correction time. More recently, the commodity sector has bounced on higher demand across metals and Oil with the exception being Gold. The latter should come into its own in 2019 but it may need a prolonged corrective phase before investors finally get their teeth sunk into the gold bars. A broad brush is often applied to equities when bear markets kick in so it will be interesting to see how Gold focused equities play out against a market downturn and a rising Gold price.

PoO has performed well and many of the doubters touting $10pb are long gone. Many ‘apparent’ guru’s of the market cited OPEC’s inability to work with their own members nevermind non OPEC giants like Russia. Compliance was the first potential weakness to be highlighted followed by oil tankers/storage. The latter has been drained and the former is working together better than the US government, better than the UK government and the entirety of the EU. Some had called OPEC ‘dead’. Big mistake. OPEC are very much alive and they have the globe in their hands. If Saudi’s turn off the taps, we are all in deep trouble. US production has stalled, rig counts going nowhere fast. And this is with PoO in the $60’s and $70’s. There might be some gains to come but infrastructure issues are holding the US shale revolution back. That and funding of course. Once bitten twice shy. Many funds are reluctant to get stung twice and the Saudi’s have shown that they will flood the market if or when they feel the need. For the moment, there is not an analyst out there that can tell you how much oil is coming to market from non-opec sources. So many projects have been shelved. So many large developments abandoned. It’s this lack of investment and development that should ultimately drive M&A. It’s cheaper to buy the reserves than explore/discover them these days. Recent activity across the Gold/Copper sector can be seen through BHP’s acquired 6% interest in SOLG (part of ShareHub 2018 picks) and the huge Randgold/Barrick merger deal. The latter will create the largest Gold miner in the world. It will have the competition quaking in their boots. Expect more M&A to follow across commodities especially in the Oil sector. Premier Oil and Tullow both look easy targets for the deeper pocketed bigger fish seeking huge reserves at a cheap price.

Week 38 review:

TheShareHub commodity focused picks are beginning to get a jog on mainly driven by Oil price and the buzz of M&A. SOLG was the worst performer in the top ten picks dropping from 30p entry price to 20p not long ago. BHP’s small 6% nibble has certainly got the stock going again. Some good updates from many of the SharHub picks of late have contributed to a solid performance in week 38. Stocks like HUM, CERP and AMER should be performing better although the latter has recently updated on a duster (not quite a duster but as good as one). There’s more exploration to come from AMER, so today’s near 15% fall looks way over done – I would expect a decent bounce in the coming weeks. Premier Oil continues to plot its way back to recovery levels although at 135p, the stock is still 165p away from the 300p level last seen when PoO was in the $70’s just a few years ago now. Dilution has occured since then but debt has fallen, reserves bolstered and production looks steady. Any move through $90pb on PoO and Premier should be eyeing 200p levels again. That’s a ten bagger from 20p lows last seen at the height of the recent Oil crisis. A risky business picking bottoms but clearly very fruitful if well timed.

The newspaper picks are recovering a little now, although the Guardian is going to need a miracle to get over the hurt caused by retailer Footasylum. Just 12/13 weeks left to the finish line.

ShareHub top picks for 2018 – week 38
DailyMail top picks for 2018 – week 38
Guardian top picks for 2018 – week 38

ShareHub Hotlist 2018 – Week 37

St legers day is out of the way… hooray! But just one day into the new week and it feels dull dull dull again. One new issue to consider… is ESMA.

New rules kicked off in July designed to reduce leverage and exposure to protect the non-professional investor. The rules were supposed to be temporary but in August ESMA renewed the ban. UK regulator the Financial Conduct Authority supports the measures and is open to applying them permanently.

The main bookies feeling the pinch are IG Group, CMC and Plus500. These companies will be forced to seek a different approach to previous market book balance… that’s parlour for your standard bookie/casino manipulation. Volumes drive business. If volume dries up then it becomes difficult to get the liquidity required to generate interest in stocks. I firmly believe that since Mid 2018 (ESMA rules introduced), volumes have reduced. Much of this could be placed into the ‘summer slumber’ period but just looking at the first week after St leger’s and the market still looks weak and sleepy across the small caps and higher risk plays. Bigger investors/II’s are often handcuffed on the weights/volumes that they can invest in smaller caps due to risk profiles. The irony is, many are free to plough billions of individuals’ pensions funds into apparent safer blue chip stocks like… Carillion or AA or Debenhams… the list goes on. No company is safe. Perils are abound. King fund managers like Mr Woodford have lost millions in a bull market which is a feat. Markets have been awash with cash via QE for years now. If Mr Woodford cannot make money in an easy market, heaven help him when the markets turn down… and they will. Long term market icons like Buffet should be applauded and admired. To get through decade after decade of market girations and still turn in the billions is a sign of a genius. TheShareHub has delivered many multibaggers, some 10 baggers and some 20 baggers. But there have been casualties. It’s par for the course. But for some investors who do not manage risk and get into debt – it can be catastrophic. So greater risk constraints are welcome if anything to save us all from ourselves. It might take sometime before the market finds a way around ESMA’s regs but it will. That’s what markets do. They find gaps and holes. They even create gaps and holes. And as seen by Lehmans debacle they even create the invisible. The untradable. And still sell it on. Binary bets or single lined stock has for an age been cited as carrying greater risk. Goldman’s and co have been pushing ETF’s for years now. Spread the risk is the mantra but in truth it actually means spread your cash between equities and your fund managers pockets. The digital age has opened the door to one click trading. One slip of the mouse or fat finger and the DOW Jones can fall by over 1000pts and then fall another 2000pts after that when all the programmed Algo bots start chasing the trend without actually identifying the cause. Scary isn’t it? Highly complex markets with HFT cables dug under the sea apparently designed to nick a 1000th of a second advantage on ‘getting in and getting out’. So where’s this going? What am I getting at? In simple terms… I’m saying the landscape is changing. It’s not the market you thought you knew anymore. It’s becoming something quite different and it’s going to take some understanding. For some retail investors, it’s painful. Less leverage means less opportunity or less ammunition. But look at it another way. US Markets are at all time highs…when the downturn comes you’ll be grateful that you are stopped out or margined out. Had similar rules been in place post OPEC’s decision to flood the market in Dec 2014, I believe quite a few investors would have been in a stronger position today. Since then, many stocks have recovered but the majority are a country mile away from where they once were. High impact exploration stocks like CHAR were trading at £500m market caps ahead of TD. Targeted resources of 200mmboe were given an opportunistic (prospective) valuation of circa $5pb. Today, there are companies selling reserves for $5pb. PetroMatad as an example, has an exploration folio targeting billions and is fully funded yet today’s valuation is just 10% of CHAR’s value from years ago. That’s 90% discount. Or viewed another way… 90% risk off. 90% doubters. 90% of disinterested and once burned investors? One of the main reasons to the disinterest in high impact explorers is down to risk off trading/investing by the larger II’s. Instead of chasing growth stocks, they simply wait for the discoveries (commodities etc) to come in, wait for the share price fever to reduce and then await the predictable cash call or equity placing to raise funds for development. Hurricane Energy is a classic example. Great success story but diluted by a market playing hard ball. The stock was around 50p post placing some years ago and since then has discovered billions of barrels of oil (and proven them up). It is close to generating cash flows from a fully funded phase one production facility and what’s the share price??… 54.5p! The market cap has moved more than 4 or 5 fold. But the share price is virtually at share price IPO entry level. That’s not how exploration or development used to work. But that’s how it works today. Well, for the time being.

Week 37 Review

Some decent news coming in from a number of ShareHub picks. AMER looks to have turned a corner and the new exploration phase should see a share price recovery to the mid 20’s. Any meaningful success could see 30p+. Recoveries from SOLG and WRES have helped the top ten picks move up towards the 8%+ level. CERP and HUM should get a spurt on in Q3/4 as both have news / results due which should be positive. Interest in POG has fallen of late but with Trump mid term elections around the corner, surely it’s time for Gold to return back to this years earlier levels of 1350. The DailyMail picks moves into the green after a few weeks in the red. The Guardian Picks look… doomed!

13 weeks left to Christmas…scary isn’t it? TheShareHub picks should have the muscle and potential to break 15% this year, so roll on the next Santa rally please…

ShareHub Hotlist 2018 – week37
DailyMail top picks 2018 – week37
Guardian top picks 2018 – week37

 

ShareHub Hotlist 2018 Review – Week 36

Summer malaise over? Not quite, St Legers day (Sept 14th) is said to mark the official end to the markets summer slumber so a few picnic days left for traders.

So lets look at some numbers. May 2018, DOW averaging around 24500 level. Sept 2018… DOW edging up to all time high levels last seen in early Jan 2018. Trade wars, Brexit fears, North Korean Nuclear war, Trumpism… all contributed to a massive sell off after the DOW tested 26200 levels. Quite right too. These are big risks and worthy of derisking. Fast forward 6 months and the DOW is just 200pts short of the same highs seen in Jan 2018. So what’s changed? Absolutely nothing! A quick cut and paste…Trade wars, Brexit fears, North Korean Nuclear war, Trumpism… all the same if not worse as there has been little sign of progress on any of these fears. More risks are on the horizon, with US mid term elections underway which officially kicks off the US media mud slinging contest. It’s astonishing that the US markets are doing so well. Of course there is a solid reason for Equities being higher and it’s a simple one. There is nothing else out there at present that remotely offers any kind of decent return for capital. Interest rates woeful. Strong dollar and Gold unwanted – all a classic sign of a one track minded market. Surely it would be sensible to hedge some risk and buy into the go-to safety haven that is GOLD? Problem is, the market is rarely sensible and like all good casino’s prefers volatility and ‘events’ as that’s what generates the best returns. 2% moves over a week or two, back and forth, back and forth is too sensible by far when you can generate 10% or 20% moves like that seen in early Jan 2018. So be sure of one thing, when the ripples on the pond appear at their most tranquil, that’s the time to watch out for the next big tidal wave coming over the hill. And considering the markets are no further derisked than the last wash out from 26200 on the DOW all the way down to 23000, a rinse and repeat should not be unexpected.

Meanwhile, outside the usual bluechip sectors, the commodity sector continues to under perform despite rising prices. PoO looks solid in the mid $70’s for Brent and with Iranian sanctions likely to bite hard in Q3/Q4, levels of $85+ for Brent cannot be ruled out. As mentioned before, the market likes ‘events’ and whilst PoO has recovered over 100% off lows, it has been a slow and deliberate path. A rise to test $100pb for Brent would be an ‘event’ and it only needs $23pb increase. Easily done if US shale numbers continue to decline. US Rig counts are not going anywhere fast – the same could be said for US production. It’s been stuck around 10.9m level for a few months now and only recently tipped the 11m mark. Infrastructure problems being blamed at present but some insiders believe it could be the beginning of a plateau period, something that would please the Saudi’s and Russian’s. The latter two are the only reason why PoO is not $150pb. If either were to hit any production problems whether through sabotage or wars or just natural disasters… the world would be in big trouble. Too much attention is being put on the Saudi’s and Russian’s ‘adding’ production and not enough attention applied to the declining global supplies that rest within OPEC partners and non OPEC suppliers. South America is in turmoil. SE Asia not seeing much investment. The majors are reigning back on big development projects… the list goes on. Yet, here we are with many sector performers like Tullow, Premier Oil, Cairn and others all trading at levels last seen when PoO was in the $40’s. Makes no sense at all. So what’s going to change it? What’s going to get the markets attention back to commodities? One simple answer… M&A. It’s been brewing for sometime now and in the next 6 months it would not surprise at all to see a flurry of M&A activity. It only takes a couple of deals to spark a revaluation of the sector. With summer trading over, perhaps the next few months will see some deals going through. SOLG.L saw BHP buy a minority stake in their Copper/Gold asset in Ecuador. This could be the beginning of the end for SOLG and after a few years of exploration finally deliver shareholders some real profits. SOLG is part of TheShareHub top ten for 2018.

Elsewhere within TheShareHub top ten picks, AMER and CERP have been actively picking up assets cheaply. Both are underperforming sector peers thus far but should be putting in a very strong end to 2018 assuming all goes well with current operations. Big exploration is underway with MATD yet the market is not treating the stock with much enthusiasm after the recent 10p placing took the wind out the sails. Shame, as the stock would surely have been around the 18p mark by now with just days to TD. Certainly one to keep an eye on as back to back drills offer some underpinning to the stocks share price. The second drill ‘Wild Horse’ is listed as one of the world’s top 20 exploration wells so it should see greater interest than the modest ‘Snow leopard’ drill which should be completeed shortly. MATD is part of TheShareHub ‘heads up’ picks for 2018.

Finally, Hummingbird Resources deserves a mention as the stock is surprisingly the worst performer in the ShareHub 2018 picks. There is absolutely no reason what-so-ever for the valuation gap between projected earnings and market cap. The share price of 26.5p today is representative of where the company was last year when they were still in the middle of building the Yanfolila mine. Since then, the Gold price has remained at a similar level, HUM have a fully functional gold mine and cash generation is rolling in. It’s derisking by the day yet the share price remains weak. A puzzle indeed. Next earnings announcement and production update should see some common sense return. With global risks rising (US mid terms) and equities sky high, GOLD must surely be the go-to metal for when the inevitable market correction arrives. All points towards HUM being a very attractive investment for investors interested in gaining some exposure to GOLD whilst gaining good value entry points in share price terms. With GOLD in the 1400’s, HUM is a potential 60p stock. That’s a multibagger inwaiting. No guarantees of course and risks still remain.

Week 36 Status:

TheShareHub picks continue to rule the roost with the DailyMail picks slipping and the Guardian picks dragged down by retail woes at Footasylum. Roll on St Legers day… it’s looking good for a strong finish to 2018 for TheShareHub picks.

TheShareHub picks Week 36 2018
DailyMail picks Week 36 2018
Guardian picks Week 36 2018