ShareHub Hotlist 2019 Review – Week 02

It’s taken just under 2 entire years to get to the point whereby a deal is presented to parliament to vote through or vote down. There doesn’t appear to have been many intricacies. The hurdles that remain now were known and would have been known pre referendum. There are about 3 paragraphs below that you can’t see because they’ve been deleted. Why? Because i’m fed up with these bumbling fools. Can we have a referendum and do away with MP’s entirely? I have no interest in discussing this anymore and I’m sure the bulk of ShareHub readers are at wits’ end.

The likely impact on markets of Mrs May taking a kicking in Parliament later today is fairly minimal. The market has already forecast in a 99% chance of her deal being voted down. The timelines that follow are the unknowns. Will there be an extension to July? These are the key drivers for markets. Known dates and action required to deliver on these timelines. Is there time for a general election? Etc etc. Is there time for a second referendum? For the moment, the market is more concerned by US/China trade talks to take too much note of these bumbling EU/UK political Ouphs (sic).

Moving on (phew, that feels better already) markets have stabilised since the choppy sessions seen in December. Call it US tax selling, algo’s recalibrating, risk off trading or just some froth being removed, whatever it was seems to have calmed down… for now. China / US trade talks are a key factor in this quiet. It looks like it is heading for an amicable agreement. Add to this the US Fed Reserve seemingly changing tact from interest rate rises to status quo in 2019 and we might be ok for a steady year albeit some distance from previous Index highs.

When it comes to the Oil price, all eyes are on OPEC cuts. It’s all about implementation now and the market always errs on the side of caution when involving countries like Russia, Iran, Iraq and others. If OPEC and non OPEC stick to their pledges, then Oil supply/demand should rebalance within Q1. The average forecast for Brent by a number of industry analysts stands at $72pb for 2019. If Q1 averages around $65pb, then Q2 onwards needs to get a jog on. Hence, Brent at $80pb again seems the most likely event but don’t pen it in, just pencil it for now. Global growth is still a concern and over the next 6 months, we will all know alot more.

Week 2 Review:

TheShareHub top picks are having a strong start to 2019. Up 11.5% in just 10 days is a great growth rate. A number of top picks have plenty left in the tank and many haven’t got out of the blocks just yet. CERP delivered a decent update on ops hitting the 1000bopd year end target. It’s all about drilling in the SWP this year and if that goes to plan, then it could be the highest multi-bagger across the picks. Thus far, a corrective phase or recovery is underway with MATD after an update confirmed 2019 drill plans were on track. There is still some doubt to clear over rig operators/approvals and once this is done, the stock should continue to recover back to last years levels seen pre-Wild Horse TD circa 5p/6p/7p level. Upon success… much higher. No guarantees of course.

Amerisur Resources has a very active drilling period coming up with plenty of catalysts to fuel further share price growth. The Indico-1 discovery as well as the recent $93m Oxy farm out deal has yet to fully soak in with investors. Both events are potentially transformational and will fast track all ops across these assets. 2019 looks like being a very exciting year for AMER holders. Another stock capable of multibagging before year end. Elsewhere across the picks, it’s steady progress. The one stock lagging is wishbone which looks a bit under the cosh when it comes to warrants. Bit like WRES. These two have active mines but in getting to that position they also have past warrant issues to absorb. It might take sometime before these are cleared but once they are done, share price progress should be swift. Operational success is a must. Which brings me onto HUM. A nice recovery from 16p lows driven by good exploration results and a higher Gold price. Q1 numbers are not expected to be pretty after the poor ending to 2018. But look past that and things should get much better in Q2 heading towards the second ball mill installation planned for Q3/Q4 2019.

Finally, talk or gossip that Premier Oil are sizing up some North sea assets held by Chevron have put the jitters up investors. A cash call or rights issue may be required. A similar episode occured with Enquest last year, which like PMO have heavy debt piles to manage. It does seem an odd time for PMO to seek such a bold asset acquisition and with debt falling at a faster pace, investors would have prefered a higher share price level if equity is indeed part of the acquisition package or deal mechanics. Ironically, if Premier Oil walk away with no deal, the share price should jump 10% or 20%.

Mmm sometimes ‘no deals’ really can add value.

Roll on week 3.

TheShareHub picks 2019 – week 2
TheIndependent picks 2019 – week 2
TheGuardian picks 2019 – week 2

ShareHub Hotlist 2019 Review – Week 01

A strong start to the year for TheShareHub 2019 picks. Further good news from Amerisur Resources helped the picks get off on a positive note. With news due from majority of the picks, catalysts should be coming thick and fast. Premier Oil are heading towards Target Depth on their second Zama well in Mexico. PetroMatad are due to update the market on 2019 plans on Friday Jan 11th. Columbus Energy are long overdue an update on production and forward plan. And Petra Diamonds have set Jan 28th as their trading update. January certainly looks like being a busy month.

Across the markets, Global risks remain with China/US trade talks kicking off on Jan 7th and North Korea Nuclear discussions ongoing. And there’s the big Brexit deal vote set for January 15th. Although the ways things are going there could be several reinventions of this vote if it doesn’t go the PM’s way. By this I mean, a no vote would lead to … well, apart from some mini chaos, probably a revised deal and then another vote. You can see how this can trundle along for another few weeks before all concerned kick the can down the road and extend March 29th deadline to June 30th. Afterall, what’s another 3 months? And another 3 months after that and so on. That’s how the last 2 years has been managed by the UK gov and EU partners. None really want this and most would prefer a second referendum. But after seeing how childish and arrogant the EU have been, I have a feeling that a second referendum will deliver the same outcome. And after that, there’s absolutely no way back for all involved… which is probably why it is being avoided right now.

What does this mean for global markets and equities? Well, it’s likely to be a bt like 2018. Choppy and unpredictable especially with slowing growth thrown into the mix. Will there be a huge sell off? I don’t think markets are ready for another crash. Banks still look fragile, QE is being withdrawn at a time when most are suggesting it should be retained or even raised. At the end of the day, it all comes down to the Algo’s and bots. And that’s the worry. The market has become saturated with these algo’s and one of these days, it’s going to go terribly wrong. But don’t worry, there’s an Algo out there already prepared for that.

One sector that may do well from a weakening dollar would of course be commodities. Miners and O&G stocks could at last see signs of another bull run. Seems at odds with a slowing global economy, but it’s almost a decade since QE kicked off and risk off trading commenced. Easy money was made so risky commodity stocks became ignored. But as QE dries up and the broader blue chip indices begin to let off some steam, Commodity stocks (many of which are just off all time lows) could be back in favour. OPEC are showing signs that they will support the Oil Price regardless of Global issues. Many investment funds are beginning to look to solid metals as a safety zone. Gold has risen from 1150 to test 1300 levels recently. If markets wobble further, Gold could hit 1400 before the year is out.

Lots of if’s and but’s. But in this market it’s impossible to be 100% sure of anything. So be prepared in 2019 for all eventualities. Keep on your toes, spread risk and always invest sums that you can afford to lose. Do not over leverage. Be smart and do thorough research. Be patient. There’s always next year and the year after. Sometimes the best investment is no investment at all.

For those that are new to TheShareHub Hotlist picks. The idea is simple. You take £10k and invest it in more than 6 stocks. Ideally 10. You then leave them to do their thing over 12 months and tally up the net gain. Two Newspaper top pick 2019 lists go head to head with TheShareHub top picks in an effort to win the Hotlist cup. Gains from Dividends are excluded and stocks are not traded. The stocks are set in stone for 12 months and that’s that. This is not necessarily the best strategy in a volatile market and should not be followed verbatim. If you invest in TheShareHub picks, then you should manage risk accordingly to suit your personal situation. See risk warnings in side panel.

During the year, other stock tips are provided via ‘heads up’ posts. Some turn out well and others fail. So all require thorough research and investigation by your good selves. Best of luck to all investors in 2019. If you want to sign up for post notifications direct to your email inbox then please subscribe via the sidebar. Check spam folders for verification/confirmation emails.

Week 1 Status:
TheShareHub (2018 Hotlist cup holder) zooms into an early lead with a 5.6% gain. The Guardan picks begin where they left off in 2018 … in the red and the new boys ‘The Independent’ are up and running with a small gain via their whopping 12 x picks. That said, one bright spark added Randgold Resources which as many know have merged with Barrick Gold, now listed on the NYSE/TSX listing. So that single line stock will need to be adjusted.

ShareHub top picks 2019 – week 1
The Independent top picks 2019 – week 1
Guardian top picks 2019 – week 1

The ShareHub top ten picks for 2019 – Overview/Target Prices

It’s been a good start to the year for TheShareHub top ten picks albeit, very early days. 2019 is likely to be just as crazy as the end of 2018. It could be worse or it could be better. I simply cannot say one way of the other. But I do believe that Commodities will do better as PoO returns to balance and OPEC makes adjustments to suit a potentially weakening demand. Apple Inc’s disasterous update on iphone sales has been a long time coming. The company announced last year that they would no longer be reporting on specific iphone sales. Easy to see why. Every brand has its time and Apple have done brilliantly over the last decade or more. But in this world, top brands are overtaken pretty fast and can be left for dead. I don’t think that will be the case with Apple, but I do think they are on the decline. Samsung and others are now producing equally stylish and indeed, better performing devices. Apples’ woes are not down to global growth slowing. The drop in sales is a signal that the World has moved on, and other Brands have caught Apple up. There was a time when Nokia and Motorola looked invincible. There was a time when Sony were kings of all walkman’s (for those old enough to remember the good old cassette tapes that got warped and wrinkled over time). Bit like Apple. I wouldn’t say warped but there are some areas of their business and products that is beginning to look distinctly wrinkled. So should we be fearful of Apples’ demise? Nope.

With the markets bobbling about like Dice in a Casino, it would take a fool to try and predict where the DOW or FTSE100 would end up this time next year. Investors should be aware that bull runs fuelled by QE invariably turn into Bear runs when QE is removed. The question on everyones lips going forwards is that if global growth begins to slow, will QE be extended or implemented again by the Fed Reserve? It’s very possible. And in that scenario, equities could see another run at all time highs. US interest rate policy is expected to cool which could help equities in 2019.

Recently, the commodity sector has seen an increased amount of activity within the Merger and Aquisitions space. M&A has been missing for sometime now but cheeky offers are appearing and targeted stocks are disappearing. Last year Ithaca Energy got gobbled up. This year it looks like Faroe Petroleum’s turn. FPM may yet keep DNO at bay, and their offer looks opportunistic when timed against a poor market backdrop. Ophir Energy is another stock that has seen interest with a potential offer to be tabled or not… in the next few days or weeks. Shell might want to have a say in the matter as they have a working interest in Ophir’s highly valued Tanzanian assets. Interesting times ahead and one to watch even if you are not invested as valuations may have knock on effects to other stocks.

Last year, TheShareHub dropped a number of stocks and added some fresh blood. This year, the cull has been less due to many of the 2018 stocks continuing to ooze potential. This year sees the introduction of 4 new stock picks and 6 stocks rolled over. As follows in no particular order:Amerisur Resources – 2019 Entry price 15p. Y/E Target Price 60p. Amerisur Resources has been hammered over the last 2 years by the presence of a persistent High Net Worth individual called Rex Harbour. A sizable amount of stock was dripped into the market on a daily basis which over time dented sentiment and eroded any good news issued by the company. Strategic pipelines were built, costs lowered, prime exploration acreage bought and increased. Cash pile increased. Production doubled. Oil Price doubled. Debt free. Yet Amer’s share price has virtually halved from levels seen 2 years ago. Odd indeed. Today, the company is in a better position than it was when the share price was last at 32p. Recent success with the Indico-1, OXY farm out deal and a plethora of director share purchases… a company brimming with confidence. 2019 is a busy year on all AMER’s assets and by the end of 2019, any potential predator out there will have a very good idea of what value AMER presents. TheShareHub predicts a take out price of 60p. Success across the exploration folio is crucial in attaining this price.

Columbus Energy – 2019 Entry price 2.9p. Y/E Target Price 14p.
CERP has assets in Trinidad and Tobago. At last count, the company was producing around 750 bopd. Not much is it? But with a market cap of just £23m, CERP’s cash flows are positive with PoO around $50pb. The company has a proven CEO in Leo Koot. He’s had to spend the bulk of 2018 sorting out spanish issues as well as old legacy stuff left by past poor management. Leo’s idea is a simple one. Get CERP producing over 1000bopd and use the cash flows to explore the companys deep exploration targets. Some of these targets could hold 100’s of millions of barrels. Any drill in the SWP area would present investors with a relatively free ride on high impact returns as CERP would be underpinned by solid production. There are some companies out there that have zero production and yet command market caps 3 x the size of CERP based on exploration opportunities alone. CERP have all the ingredients for the investor looking for risk off exposure to high impact exploration. Target Price 14p, but needs a solid exploration result to hang onto those levels. Company update due very soon.

Hummingbird Resources – 2019 Entry price 21.55p. Y/E Target Price 36p.

Roll over from 2018. A disappointing year with operational and management issues. If the company can get back on track and extend mine life at Yanfolia, then a recovery back to 36p looks realistic. The new ball mill does not arrive until last Q3 2019 and the upcoming earnings numbers are not likely to boost confidence. But moving into Q2, HUM should be heading in the right direction and could be boosted by Gold’s new sparkle due to global recession fears and risk off investing. Target price 36p but needs to deliver operational excellence 365 days of the year with no hiccups. Quite a tough task for a small miner.

(new) Petra Diamonds – 2019 Entry price 37.68p. Y/E Target Price 77p.
After a year of fighting debt off and Rights issues combined with less than happy local governments, PDL are back on track and should be set to release some very attractive numbers in 2019. Whilst there is the usual hangover from rights issues and debt scenarios, PDL looks undervalued and a potential takeover target. Target price 77p. Requires operational excellence, strong diamond sales and governments to play nicely.

(new) PetraMatad – 2019 Entry price 2.28p. Y/E Target Price 16p.
2018 was a poor year on a number of fronts. Significant funding and dilution to equity put a real dampener on interest ahead of some mouth watering exploration. In the end, both drills delivered nothing commercial and with no back to back drilling due until Q1 2019, the stock has been treated to the usual AIM investment cold shoulder. Next week the company is set to update the market on 2019 plans. The current market cap just about covers the cash in the bank. Fully funded with an exciting exploration plan for 2019 surely deserves a premium added to the share price beyond cash? Target price of 16p is based on exploration success. Should the company impress with next weeks update, then investors may re-enter the stock early ahead of the next exploration well. Very risky stock as pure exploration play.

Premier Oil – 2019 Entry price 66.55p. Y/E Target Price 180p.
Debt heavy, but asset rich is the best way to summarise PMO. With production heading to almost 100kbopd levels, the mind boggles at the markets current discounted valuation of 66.5p. Lower PoO will hurt PMO but with assets like Sealion and Zama under their belt, they could make asset sales if the market really got bad. OPEC seem intent on keeping prices ‘fair’ so I do not expect Brent to drop below $70pb for very long once the rebalance has been achieved in Q1 2019. At $56pb, it has plenty of room to head higher without raising eyebrows. Should the second Zama exploration well deliver the same results as the first well, investors might find themselves in a similar boat to Ophir Energy. PMO are far too attractive to potential predators to remain at today’s price levels without having a takeover approach. Ironically, it was Ophir Energy that were apparently sliding the rule over premier oil sometime ago. What goes around… comes around? Target price factors in exploration success and consistent operational excellence with debt reductions along the way.

(new) Sirius Minerals – 2019 Entry price 20.8p. Y/E Target Price 32p.
It’s not easy delivering a huge project like Sirius’ Potash mine. Delays are to be expected and often projects run at higher costs. These are the main reasons why SXX has struggled of late. The commercial story still looks a billion dollars and the investment case is strong. Key operational milestones in 2019 require smooth transitions and if all goes well, the market should reward with a rerate. Target Price of 32p is based on all going swimmingly. After a tricky 2018, SXX look back on track.

Solgold – 2019 Entry price 36.75p. Y/E Target Price 75p.
If you keep building upon resources and delivering terrific assays, finally someone will come along with the deep pockets required to develop it. The problem for Solgold is not how much resource they have but defining it faster enough to get a fair price. With BHP buying up crucial voting shares and Newmont doing the same, I think a battle for Solgold will inevitably fall to these two. An offer that shareholders cannot refuse could be pitched at 75p or more. Anything less and shareholders may just wait it out.

W Resources – 2019 Entry price 0.54p. Y/E Target Price 1.9p.
Too many fundraisers at 0.5p or below has kept a cap on the WRES share price. They need to deliver operational excellence and get to a position whereby they are cash flow positive to reach the dizzy heights of 1.9p. But on a valuation basis, the Target is quite achievable. Tungsten remains in high demand and WRES are perfectly positioned in Spain to deliver globally or on their own doorstep across Europe. If cash flows and production are steady, the share price should climb nicely in 2019 providing the CEO doesn’t pull out another fundraiser again.

(new) Wishbone – 2019 Entry price 0.18p. Y/E Target Price 0.75p.
By far the wild card of all picks. Risky and no doubt needing further funding down the line. But for now, after a series of 0.1p equity issues, Wishbone are up and running. Gold prices are important but so is operational excellence. Like HUM, Wishbone will need to keep costs down and get cash flows coming in fast. Production from Honduras is underway after licence approvals late in 2018. Shipping to Dubai should commence in Q1 and if all goes well, Wishbone should be a multibagger contender for 2019.

Regular updates on all TheShareHub top ten picks will be posted throughout the year. As per the norm, 2 x newspaper picks for 2019 have been added and will go head to head for the Hotlist cup. This year, TheGuardian gets another chance to make up for a poor 27% loss last year. And The Independent features with a whopping 12 top tips. Some based on a decent Brexit scenario and some based on a no deal case. Unfortunately, they can’t have their cake and eat it, so all 12 picks are in.

As always… be careful out there. It’s more volatile and unpredictable than ever before.

Sign up for regular updates direct to your email box. See sidebar. Please check your spam for verification link if nothing has been received.

The ShareHub top ten picks for 2019

ShareHub top picks for 2019

Drum roll…

Here are the ShareHub top picks for 2019. Many picks from 2018 have made the list again. Some new blood has been added and a slightly bigger weight added to Miners vs Oil&Gas but on the whole it is another commodity heavy list.

Ophir Energy had been inked in as of Dec 30th based purely on the undervalued nature of their non producing assets.

But due to the breaking news of a takeover approach late on Dec 31st, TheShareHub thought it only prudent to remove the stock as starting the year with an almost 50%+ gain (that’s a guess) might not be seen as fair play when going head to head with some of the investment worlds expert stock pickers aka… the newpaper top lists for 2019.

Ophir Energy should go for at least 100p based on the asset worth, which would be a 3 x bagger for some investors. A cracking start to 2019. But no guarantees of course and a low ball at 70p, delivering a single multibagger might equally be successful in this very ‘odd’ market today.

Value often wins out and with Ophir priced just shy of 35p, the market should be embarrassed if offers finally come in at double that price. It just goes to show how deeply discounted the market has become towards commodity stocks. But lets not jump the gun, Ophir has yet to announce an offer price and one may not come at all. But one thing is clear… Ophir and many other commodity stocks out there today are undervalued and it was only a matter of time before M&A kicked ‘properly’ off. With Faroe Petroleum also looking to avoid a cheap takeover approach, other stocks like Premier Oil and Tullow will no doubt be wondering how much longer they have before they too are taken out.

A full appraisal of 2018 with week 51&52 results to follow over the coming days. Do all research and risk assessments on stocks before buying or selling. Read the risk warnings (see side panel). In this market you have more chance of losing your investment funds than increasing them. It’s unpredictable and likely to continue that way, so be careful and very measured in 2019.

More coverage and depth will be added to the 2019 picks over the next few days and throughout the year.

Happy new year to all ShareHub readers and may 2019 be a very rewarding one.

ShareHub top picks for 2019