ShareHub Hotlist 2019 Review – Week 08

Oil focussed equities continue to look sluggish against a strengthening Oil price. An odd situation indeed. Normally, if PoO moves up 5%, equities would follow but with gains double that level or triple it. Premier Oil as an example, was trading at 145p the last time the DOW was in the 26000’s although that was with PoO above $80pb Brent. Today, PMO trades at virtually half that price in the low 70’s. Does a near 50% drop really justify the $15pb drop in PoO from highs? Of course not. But that seems to be the trend of late. Equities get hit hard on any retraces in Oil Prices yet fail to bounce or firm strongly upon Oil Price rebounds. The market is in no rush to get this disparity resolved. Ophir’s recent woeful sale at a huge discount to asset values has done very little to help. PMO has proven assets such as Zama, Tolmount, Sealion and more. Yet the market is pricing these at near zero. It’s a harsh environment despite many debt laden companies trimming capex, reducing debt, boosting production and through streamlined measures increasing their margins. In this kind of market, Oil companies need to think differently about shareholder returns. Reducing debt used to be (and still is in some cases) the main objective, but many of these businesses are cash flow positive and capable of reducing debt while also dishing out Dividends. Tullow recently confirmed a return to dividend payouts (or special dividend). After years of capex investment, exploration wells, boosting production and so on, Premier Oil last issued a dividend in 2013 to shareholders. It’s been a long slog and near life death experience for the company since late 2014’s Oil bubble popped. But after 6 years of hanging on by the toenails, Premier Oil should be looking at returning some cash again whilst paying down debt. Growth companies have long stood by their stance of reinvestment is the key to greater growth. Well… history shows this is not true and perhaps the Oil company growth strategy needs rethinking for the 2020’s. To get investors back into Oil stocks, companies need to deliver incentives. A return to divi’s for some might just be the answer, or at the very least…some form of share buy back system.

Week 8 Review: TheIndependent remains firmly at the top with solid gains helped by the FTSE’s climb from January lows. A combination of Trump/China trade talks and North Korea issues have helped US markets return to near all time highs. And that’s despite the demise of Apple’s iphone and subsequent poor sales figures. Apple’s share price was $140 just a few months ago and rightfully so. Yet today, the price has risen back to $175 a share. $35 gain a share doesn’t sound too much to get excited about but in the context of Apple’s market cap, it equates to a whopping $166bln. And that’s a business that is on the decline due to slicker and faster products via competitors like Samsung and Huawei. Crazy… you have a market that is at ease dismissing 300mmboe+ oil reserves for ZERO (Sealion/PMO/Rockhopper) and yet completely satisfied to see a poorly performing company jump $166bln in market cap for no reason at all. In fairness, it’s not quite that simple. One of the reasons why the likes of Apple get bought into, is down to the algo’s/bots/ETF’s/Trackers and so on. There’s so many other market products out there based on buying into top tier stocks, that if the DOW goes up, then generally speaking so does Apple despite its Nasdaq listing. Some might say it is too early to say whether Apple has peaked. But looking back, Nokia, once king of the mobile phones fell away quickly. Sony… king of the Walkman…unthinkable at the time, but soon left behind. Apple might be able to stop the rot but that has to come through pricing. Selling phones for £1000 is ridiculous. Selling phones for £200 looks fair value today. Plasma screen tv’s that sold for £5000 some years ago, now sell for £500 and they are more advanced and better quality today.

So in summary, If the DOW goes up, resources/commodity stocks stay where they are. If the DOW goes down, then Resources/Commodity stocks go down. If Oil rises, Oil focused stocks improve but barely match PoO’s rises. If PoO falls, equities fall harder in percentage terms. Damned if you do and damned if you don’t! Suffice to say, it’s tough going out there for commodity stock investors. Not much reward at present and plenty of risk. But that should change in time… and would certainly be helped by a dividend or share buy back by a few cashed up sector players out there. But managing debt piles should remain the number one goal for many. With Saudi Aramco IPO still very much in the mix, the Oil market/price looks like heading for a period of stability somewhere… in the highs $60’s to $70’s. That bodes well for the sector.

ShareHub Hotlist 2019 Review – Week 07

An exceptional week for TheShareHUB picks with a whopping 12% gain. The majority of gains can be attributed to PetroMatad – The first to multibag in 2019. With equities lagging behind the recent resurgence in Oil Prices/Gold Prices, TheShareHUB picks had experienced a quiet period over the last few weeks. Short termism has turned the markets into more of an entertainment circus rather than the usual casino with flashing lights. Investors today become impatient all too easily. Like an addict looking for the next fix, Retail investors tend to seek news nearly every other day. Investing can be a rollercoaster, but it wouldn’t hurt a few to take a page out of Mr Buffet’s book and look to mid to longer term expectations. PetroMatad is probably a classic example of the current herd mentality out there across many AIM listed stocks. Last year the share price was trading at 6.5p before the last exploration well hit dust. A disappointing result, granted. But the drop in share price from 6.5p to 1.7p was heavily overdone. PetroMatad at the time had over £15m in cash which equated to approx 2.2p. That priced the multi-well exploration plan in 2019 at zero. But try telling that to a Retail investor in mid November 2018 and the answer you would get would be simple… “Yes.. attractive, but there’s nothing happening here for at least 6 months so I’m off “… is the usual mantra. Followed by… “I’ll come back later next year.” There is nothing wrong with trying to make cash work elsewhere while some stocks go into a dormant period. But is Mid Nov18 to Mar19 really that long to wait? Of course not. PetroMatad’s rise from 1.7p to highs of 6.5p in just under 5 weeks is not a surprise to some, but a mystery to many. The ‘many’ being those that thought they could buy back in weeks before the next drill plans get underway. The trend of late is a telling one. Retail investors are beginning to realise that ‘getting in early’ really can be rewarding and help derisk going into quite volatile share price periods as exploration wells get underway. Other examples like Providence Resources 8p to 16p prove that point. Investors would be wise to seek out stocks that have communicated ‘active’ high impact exploration plans for Q2/Q3 2019. There is always a risk that plans change and the focus on exploration reduces so risk is very much on the early birds side. But the rewards can be significant although it can test the patience of news hungry investors. Many of those seeking constant signs of progress through share price movements can become frustrated and should perhaps look more closely at the company / business and concentrate on the calendar of events/catalyst ahead.

Look out for potential drill result news from Premier Oil (ZAMA-2) and Amerisur Resources (Calao-1x). The latter has been treading water around the 17p level and the market appears to be pricing in zero for the Calao-1x well which seems odd considering the proven success at Mariposa-1 and more recently with Indico-1. With more wells to come in and around the CPO-5 block, a duster would not be the end of the world. Infact, the importance is more about discovering (or not) the OWC (oil water contact) as well as seeking potential borders of the oil resource. The next few wells on the CPO-5 block will help define the development plans going forwards and the discoveries to date are already very significant and sizable. Something the market has yet to pick up upon.

Another stock frustrating investors is Columbus Resources (CERP). The stock has drifted down from 6.5p levels to just 2.5p over the last 8 months and this is despite the company doubling production. Dilution has taken place but with an active planned Q2/Q3 exploration phase, the company should soon see some ‘herd mentailty’ return as Retail investors begin to get in ‘early’. CERP need to confirm in more detail the plans for 2019 and that’s the problem at present. Not enough commitment or detail from the company. Solve that, and investors will come. With a market cap of just £21m and approx 1000bopd production, near zero debt and approx £2m in cash, CERP could be the next stock to Multibag from TheShareHUB picks for 2019. Risks remain as always so make sure you do thorough research.

ShareHub Hotlist 2019 Review – Week 06

Another almost motionless week for TheShareHub picks. Commodities are stuck in the middle of a market reluctant to take on risk while easy pickings are available. Trump v China appears to be coming to a close, although one imagines that it will likely require 6 monthly or 12 monthly reviews. The outcome is almost baked in already with the DOW just 4% shy of all time highs. It wasn’t that long ago the index was trading at 22000, some 3500pts lower. Around the corner, Brexit fast approaches. It is tempting to ignore this debacle but unfortunately it is a headwind that needs addressing. Mrs May needs to get her skates on as she’s fast becoming known as Mrs Delay. We are at the sharp end now yet ask any politician what happens post 12am on March 29th and not many will be able to tell you. Of course there will be a transition period, a period of ripping up old rules/regs and a period of creating new ones. Based on Parliaments performance to date, one imagines that to be just as chaotic as Brexit itself. So get used it. Uncertainty will be around for much longer than many would like you to think. There is no quick solution. It’s going to take years. Moving on to the hall of shame… this week it’s Sergio and Tusk that take the headlines. Sergio sought out the devil in the greens and after hacking a few to bits with his shoe spikes, gave up on his hunt. He was later disqualified. Golf seems to be one of those sports that just turns a blind eye to such abuse, unless you’re a local club player and the penalty would be more than a few drop shots. Cancelled membership and booted out the door is the norm and quite right too. Perhaps a ‘ban’ for misbehaving professional golfers might be an idea? Mr Tusk may have stepped over the line with his headline catcher but as many have highighted… he has a point. When David Cameron delivered a referendum, the British Public assumed he and his party had done due diligence on how to exit and identified the main issues or hurdles ahead. The Irish border was, has always been and still is the elephant in the room. It’s now approaching 2.5 years and the solution has been left to the last 30 to 40 days? Of course, it takes two to tango and what Mr Tusk seems to be missing is that he and the EU are just as culpable. From day one, the EU made it clear that they would make any exit process feel like HELL. They would make it as difficult as possible. They had to. Why? Because they had to teach the UK a lesson. They had to set an example to other potential ‘leavers’ within the EU. They had to send a message. So in answer to Mr Tusk’s… ‘a place reserved in hell’… for certain individuals, that will be the seat next to yours then Mr Tusk?

Week 06 Review:

The Newspaper picks continue to do well as the FTSE focussed stocks ride the wave of US/China trade talk positivity. Brexit… what Brexit! Commodity stocks continue to tip toe around as global growth worries cancel out higher Oil/metals prices. A weaker dollar would help too but that seems artificially assisted these days. The Saudi’s appear to be keen in seeing WTI above $60pb and it would not take much to get the price there based on recent cuts and Venezuela issues. It should be just a matter of time before PoO rises back to 2018 ave levels circa $71pb for Brent. This bodes well for the likes of Tullow, Premier Oil and Enquest. These big producers have big debt too but the cash being thrown off at $70pb+ is huge. As debt reductions kick in, share prices should rise strongly assuming production levels and oil prices remain firm.

TheShareHub’s first heads up of the year – Echo Energy delivered the first duster of the year. Disappointing but the company has an active plan going forwards, solid production of circa 850bopd and around $20m in cash (assuming some spend over last 6 months). A poor result was already priced in at 8.6p (price down from 12p placing), so the fall to 4.3p yesterday looked utter madness, but that’s AIM for you. As many ShareHUB followers know, Amerisur Resources struck black gold with the Indico-1 well in CPO-5 block, Llanos basin Colombia last year. Early in Jan 2019, the well flowed at 5100bopd. This was put immediately on short term testing and will then go onto long testing with all production being sold at the well head. It’s quick payback and instantly delivers reserves. And the markets reward… about 1p to 2p a share at present based on 16.8p. That’s around £20m improvement in market cap. That values the added reserves (approx NET 6.2mmboe) at around £3m per 1mmboe. The industry standard is nearer £10pb or £12pb for light oil offshore with infrastructure. After all costs, AMER’s profit on a well like Indico-1 is around $10m per year. (Note: Other issues like security and development performance also come into play when valuing reserves.) Clearly undervalued and with another 5 to 6 wells due in the basin this year, Amerisur shares should be in hot demand. Of course, risks remain and success with the drill bit needs to translate into higher production and stronger cash flows. The latter is perhaps Amerisur’s weakness of late. Exit rates of 7000bopd seen in 2017 have slowly reduced to rates of around 5400bopd and that’s including the recent approx 1500bopd contribution from Indico-1. That said, assuming all goes well in 2019, Amerisur could be entering 2020 with over 10kbopd. Plenty of success required to get there but fully funded, debt free and cash generative even at oil prices below $25pb, Amerisur looks ready to finally rock and roll.

Elsewhere, PetroMatad looks odds on to become The ShareHUB’s first multibagger of the year. An active drill plan in 2019 should keep investors happy and the share price lively.

Wishbone and W Resources are both suffering from warrant overdoses. Get past these and the share prices should benefit if or when the good news flows in. Both are approaching key target operational milestones for their mines and the next stages should be a significant step up.

Columbus Energy is suffering from the traditional ‘no news’ AIM drift. Whilst management have already said that 2019 is the YEAR they have been waiting for, progress and communication to shareholders has been slow. As highlighted last week, news should be forthcoming as plans to drill in the SWP region likely requires lengthly planning, permits and rig acquisitions. With the share price drifting from 6p to 2.4p, the pain for long termers has been severe. Dilution has not helped through several placings but debt is now under control and almost reduced to zero. CERP are now in a strong position to push on which begs the question why the sp is at such lows. Management need to outline clearly the plans for 2019 and give shareholders some dates to look forward to. The share price should rerate back to 4p levels assuming all plans look good.

Upcoming news? Watch out for news from Premier Oil on Zama-2 DST results (est. next few days or week) and Amerisur Resources Calao-1x well est. to TD in about 2 weeks time.

TheIndependent Top picks 2019 – week 06
Guardian Top picks 2019 – week 06
TheShareHUB Top picks 2019 – week 06

ShareHub Hotlist 2019 Review – Week 05

A tough week for TheShareHub top ten picks for 2019. Commodity prices are up over 20% in most cases from Oil to Gold. So question is… why are commodity focussed equities slow to react? In the Oil&Gas sector, the market is still unsure of how OPEC and NON OPEC are going to get along. Trump’s sanctions on Venezuela came as a bit of a surprise and undoubtedly have led to stronger oil prices over the last week or two. Russian oil cuts have yet to be felt after the Russian Oil minister admitted that it takes time to reduce production safely. Funnily enough, it doesn’t actually take them much time to boost production when allowed. Cynicism aside, the Russian’s are not part of OPEC and as such do not need to comply with cuts. A ‘deal’ between the Saudi’s and Russian’s is very much ‘open’ to intepretation and it’s because of these vagaries that the market is so against pricing ‘in’ a full supply/demand rebalance. Furthermore, Iraq and Iran are still very much the wild cards. Trump promised heavy Iranian oil cuts via sanctions some 6 months ago and ended up delivering very little on that promise. That said, the recent Venezuelan sanctions are helping and the data over the next few weeks should begin to turn quite bullish for PoO. That bodes well for the likes of Enquest, Premier Oil and Tullow. All big debt holders, and all needing top dollar a barrel to ensure meaningful debt repayments can be made whilst still continuing to grow and support production levels. That’s the biggest problem for Enquest and Premier Oil near term. Many producing fields are heading towards plateau rates and many are now very much on the decline. Expensive workovers, pipeline repairs and so on…all await around the corner. That’s E&P for you.

Week 05 Review: The FTSE100’s strong recovery has benefitted the two newspaper top picks which both lead the way. Barrick Gold has been dropped from the Independent picks and funds redistributed amongst the other 11 stocks. Based on the Rangold Resources tip, TheIndependent picks would be around 15% down on that stock bringing their total growth thus far to 5.5%. The Guardian top picks are not far behind. TheShareHUB picks are carrying the wooden spoon for the moment which is quite a slide from the opening 11.5% gain in Week 2. It’s likely to be a bit of a roller coaster in 2019 so get used to wild swings.

Drops in AMER, MATD and SXX look a bit over done but there’s nothing wrong with a bit of consolidation. Stocks often go on to test higher highs once support levels have been tested and short term trading interest has departed. For many smallcap stocks, the lack of institutional interest is frustrating especially as some assets are reasonably derisked compared to a decade ago. The wash out that followed OPEC’s ‘flood the market’ decision in late 2014 has left a long tainted mark on the sector. Ironically, many of the mid tier and lower tier E&P’s have become more streamlined. Debt reduced or renegotiated and overheads/costs reduced. Many are leaner and meaner than they were in 2010. Yet the II’s still resist the temptation to get involved meaningfully. Add to this the impact of new margin rates and equity trading restrictions on normal PI’s and you have a market that looks and feels more more like a ghost town. Volumes are down for the above reasons and brokers/spreadbetting firms are having to work twice as hard to gain the interest seen some years ago. M&A has been disappointing too. Ophir’s recent sale at 55p was a blow for the sector. Faroe’s sale valued a little higher yet still well below the expected fair value price. It’s a buyers market at present so expect a few more cheeky bids to come in over the next few months. If you don’t ask then you don’t get. Fighting off predatory offers requires a strong institutional investor base that are onboard with valuation benchmarks. Amerisur’s John Wardle is currently in London to bolster II interest in the stock after a number of transformational events have left the share price looking healthier but a long way from where it should be. If he can get some large II’s stakebuiding at 17p to 20p levels, then any cheeky takeover approach at 25p becomes less likely. II’s generally want double bubble for their risk vs reward when dealing with the smaller cap stocks. They like to have maximum upside and limited downside. At 17p today, AMER certainly offers that scenario assuming the drill bit performs of course. Fortunately, AMER has approx 6 to 7 wells due to be drilled this year with one underway right now with an expected TD date of end of Feb. So a duster is not the end of the world by any means.

All quiet over at CERP.L. If the company is to get plans for an SWP drilling phase underway in Q2/3 2019, then action will need to be seen regarding drill targets/permits/rigs and potental partners brought in. With bread and butter production of 850bopd to 1000bopd in place, CERP can afford to take their time and build up the cash balance. But leave it too late and they could miss the drilling season slot in Trinidad. News might not be too far away for CERP investors who have had to be painfully patient over the last 6 months+. But as the CEO’s says… 2019 is the year they have been waiting for. Well, Mr Koot… it’s time to deliver. Assuming he does, then the share price shoud recover very quickly.

The first ‘Heads up’ of the year (Echo Energy heads up price 8.65p) went out to ShareHUB subscribers last week, with a target price of 25p upon well works/stimulation success. No guarantees of course and risks remain. The full article will be posted on TheShareHUB website for all non-subscribers later this week.

As mentioned before, if you Subscribe to TheShareHUB updates service, please check your SPAM folders for the confirmation email which contains a verification link response. The link lasts for 48hrs before it lapses.

Roll on week 06…

TheIndependent top picks 2019 – week 05
TheGuardian top picks 2019 – week 05
TheShareHUB top picks 2019 – week 05

ShareHub Hotlist 2019 Review – Week 04

Better headlines from across the pond on China/US trade talks have helped the markets to return to some calm in 2019. That said, it should be noted that as January closes out, tomorrow… the DOW Jones is on target for a near 10% gain. It’s put on 2000pts since the year began and not much media hype to accompany it. In December, when the index fell 2000pts, the media channels were big bears. Many will know by now that the markets and the media are entwined. If the big banks and large hedge funds want negative stories in the press, then that’s what tends to get printed. Nothing new here, it’s been going on for centuries. Stock tips (often poor ones) would be dropped around the floor in places like the coffeehouse back in the 17th/18th century. Today, with multi-media channels galore, it’s just as easy to drop a story out there as it was to drop a piece of paper on the floor. The difference is of course… the audience. A story by Reuters or any news agency hits millions of users/readers. The stories get edited or tweaked and then sold on and recirculated to more millions and so on. The chances of misinformation are higher today than ever before. Why? Because there is no real penalty for poor journalism. Just an apology or subsequent edit required. This isn’t just the press, it involves the market too. Analysts, brokers, banks, hedge funds. All issue notes to the market and these are often acted upon by investors. Take Enquest – the North Sea E&P as an example. RBC Capital issued a broker note recently, dropping their target from 55p to 15p. Now that’s a serious downgrade. The problem is, it was based on some poor research. In fact, it was based on incorrect information. Misinformation by RBC. A day later RBC Capital issued a second note correcting their error…

“We published a note earlier incorrectly saying that there was a risk to the company’s covenants, which we had wrongly identified to be 1.1x RCF/EBITDA,” analyst Victoria McCulloch said in the new second note.

“However, the two upcoming covenant tests (31 March, 30 June) require EnQuest to have a net RCF/ EBITDA of 1.5x or less, using a trailing 12-month EBITDA.”

McCulloch added: “There is no risk of covenant breach under the updated RBC oil price deck.” END.

Covenant breaches are big news and major risk warnings for Investors. It’s as bearish as it gets. Which might explain why RBC dropped ENQ’s target price from 55p to 15p. However, after realising their error and that no covenant breach was likely, the company did not alter their target price. Why not? Probably because it doesn’t suit their position or clients positions aka debt holders, hedge funds and many others. all of which have (or may have) an interest in seeing Enquest’s equity price lowered.

A couple of years ago I highlighted the vast gap between broker notes and reality. In 2016, the commodity market was in a poor area. Kaz Minerals was trading at 90p a share. There was not a broker note around that had a bullish view. In fact, a year later after Kaz minerals had five bagged, jumping to 500p, HSBC promptly downgraded Kaz. The bank’s rating moves to ‘reduce’ from ‘hold’ and the price target drops from 440p to 400p, suggesting a fall of circa 20% from the then current price of 510p.

HSBC Said, “We had assumed copper production at 276,000 tonnes for FY17e, but management guidance is between 225-260kt; our updated forecast is at the top of this range at 254,000 tonnes.” END. Date Feb 2017. Roll on May 2018 and Kaz Minerals has double bagged from 515p to 1030p+. HSBC’s guidance / broker notes barely budged from 450p for the entire year before finally capitulating to their woeful error and setting a target at 760p.

Just where do these banks get these analysts? And why are they paid 6 figure salaries? In a 2 year period, Kaz Minerals had jumped from 90p to 1030p based on nothing more than a recovery in copper prices and stable production. Would it be fair to ask HSBC to disclose all known internal business investments in Kaz Minerals between 2016 and 2018? If they were shown to be buying stock, would that be grounds for fines? This is the problem that investors have. You simply cannot trust the motive behind these notes. Goldman Sachs have also become known within investor forums as saying one thing and then doing the opposite. If they say ‘sell oil’, then that really means ‘buy oil’.

In summary, there’s not alot out there today that can be trusted, certainly in media terms. Misinformation is rife and unfortunately this is just another hurdle that investors have to jump and contend with from time to time. It’s not right and laws should be introduced to ensure that if banks/brokers issue notes, then they cannot trade in the opposite direction… until of course, a new note is issued. The problem is, the manipulation goes further as it reaches other associated funds/investments like etfs and so on. The answer is to be wary of everything you read. Treat broker notes with a keen eye. And yes, when a large bank says sell… that might actually mean buy. Easy isn’t it?

Week 4 Results – TheShareHub picks remain top although the Guardian and Independent picks have done well to close the gap helped by the recent wobble within commodity stocks. It’s a curious one as with PoO, the price is actually up 20% off lows from last month yet some stocks are still trading like PoO was in the low $50’s (Brent). A period of consolidation among some equity stocks is not unusual after a strong start to the year but some of these pullbacks look overdone. Amerisur Resources is a prime example. Exploration success, boosts to reserves and production from CPO-5 all contributed to the share price move from 15p to 20p. However, today the share price is 17p having given back 3p. That looks overdone and a return back to 20p should be expected in the coming weeks especially when the company is set to drill another 4 to 6 high impact wells in 2019. A market that looks forward rather than back would be welcome and a refreshing change from the day trading algo bot drivel that is prevalent today. News events will continue to drive AMER’s share price and assuming they deliver good results, the share price has plenty to catch upon already, nevermind what is waiting around the corner. Elsewhere across TheShareHub top ten picks, PMO delivered a great result from Zama-2. Further appraisal work is required including flow tests and news should be coming on those soon. Unfortunately the market ignored the Zama-2 news and instead prefered to concentrate on PMO’s rumoured bid for Chevron North Sea assets. Another stock suffering of late is Petra Diamonds. A poor update was met with the usual market heavy handed approach. Down from 45p to 33p is a sizable correction and one that dents sentiment. PDL must work hard now to deliver on debt reduction and production growth, both of which should be possible in the quarters ahead.

News today of Ophir’s accepted bid of 55p is disappointing for the sector as a whole. It undervalues Ophir by a country mile. The company sold 20% of its Tanzania block a few years ago for $1.3bln. It still holds 20% which even if it was valued at $500m today leaves the rest of the folio valued at zero. Ophir made many errors in their exploration campaigns and also with the Salamander acquisition. But all said and done, 55p a share is an absolute steal for Medco. So that’s Ophir, Faroe and Ithaca all gone in the last couple of years. Who’s next! Tullow? Premier Oil? Enquest? Amerisur? Whoever it is… lets hope the offer prices are much much higher.

Finally, a quick note on TheShareHub free subscription service. Due to GDPR regs, the subscription service was updated in 2018 and unfortunately has caused some issues. If you were previously subscribed and are no longer receiving updates, please email using the contact page and your details will be updated. All subscribers are required to opt in via a ‘second’ confirmation email so please watch out for this in your spam boxes. As the year progresses TheShareHub intends to send out ‘heads up’ notes to subscribers on a number of stocks of interest. If you would like to receive this service then please sign up using the facility in the sidebar.

Week 4 below, The Independent folio has not been included due to issues over Barack Gold relisting/pricing. The Independent’s picks are up 4% as of week 4. Guardian picks up 3.3% and ShareHub sitting pretty again with 4.68% gain. Long way to go. Roll on Feb.

ShareHub top picks 2019 – week 04
Guardian top picks 2019 – week 04


ShareHub Hotlist 2019 Review – Week 03

A minor pullback for some stocks across the commodity sector despite commodity prices strengthening. The strong start to 2019 has not faltered (as yet) and the general rule is that if the first week in January is strong, then it normally sets out the stall for a positive year. That said, China/US trade talks need to deliver amicable results and the US Fed Reserve need to stick to one or two rate rises max. The usual media channels have quietened down since going all bearish during the Dec 18 rout. Some calm does seem to be returning to markets. M&A across the commodity sector has increased of late with some very large merger/buyout deals involving Newmont, Gold Corp, Randgold and Barrick Gold. Newmont may also be involved in an offer for SOLG (part of sharehub picks for 2019) as resources continue to build with successful exploration. BHP might also be in the mix for an offer which is why SOLG is one to watch in 2019. Across the Oil sector, Faroe follows Ithaca and becomes another stock that should have gone on to better things but was instead gobbled up by a predator. Talk of Chevron asset sales in the North Sea has put the brakes on PMO’s share price recovery. Investors are wary of another equity placing or rights issue. Premier Oil is unlikely to make a formal bid (if at all) until after Zama-2 drill news as it’s this kind of value added exploration which helps raise equity prices from which then capital raises become less dilutive or intensive.

Amerisur Resources continues to impress with the recent Indico-1 flow results. AMER assets are land based (onshore) and they have decent options when it comes to exports via OBA pipeline or via trucked routes. Margin levels are better than your usual offshore explorer/producer. And being debt free, the incoming cash from production continues to mount up. Fully funded for 2019 ops and non stop high impact drilling planned for all year makes AMER one of the most compelling buys around today. At 18.7p, the stock has all the catalysts required to multibag in 2019… providing the drill bit delivers success of course. M&A has been active in the Colombian region and AMER may have to watch out for unwanted approaches by Occidental should the exploration campaign in the Putumayo region, go well. ONGC might have something to say about that too which is why AMER might find itself in a takeover battle come end of 2019.

For time being, all eyes are on OPEC and non OPEC production cuts. News last week revealed that the Russian’s had only just begun to cut production and that it could take them longer to reduce than initially projected. Believe that or not, the Saudi’s will be keen to see all partners deliver upon pledges and thus far some are being slow to deliver. Oil traders (shorters) will be praying that OPEC and non OPEC (Russia) fall out or the deal becomes disrupted. Wishful thinking. Over the last 3 years, OPEC and Non OPEC (Russia) have coordinated better than many thought possible. If that continues, then PoO (Brent) should be $70pb+ in a few weeks time if not sooner.

Week 3 Positions below:

TheShareHub picks lead the way boosted by MATD, PDL and AMER. A decent Zama-2 result should see PMO contributing strongly to the folio. The Independent picks have had a strong week as the FTSE100 bounced on Brexit news as many took the view that an orderly exit now looks more likely than no exit at all. The Guardian picks performed well boosted by Morrison. The supermarket has been delivering higher quality goods at lower prices which is helping to attract new customers, most of which appear to be coming from Waitrose as the latter struggles to compete with the likes of Morrison but also the discounters like Aldi and Lidl.

ShareHub top picks 2019 – week 03
Independent top picks 2019 – week 03
Guardian top picks 2019 – week 03