Group 2 : Mid Tier
Mixed Stocks
Blimey, this was meant to be a quick and easy review of some twitter tips for 2014 but the list of 41 is proving time consuming! Not helped by a very busy time at work this
week so needed to focus elsewhere.... but..... here are more details about the mid tier picks from twitter followers who reckon these are going to be the top choices for
2014. As always, the following is only intended to signpost companies to do
your own research on. Information is in the form of basic overview only from public web sites,
so please DYOR if interested in any of the below picks. Out of all of the
following my interest was drawn to Kromek, Thalassa and Coms, none of which
would be my usual cup of tea but all of which seem to be making solid progress and are
already operating profitably at least at an operational level with bullish management
statements recently.
Mid Tier (£30m - £100m market caps)
|
||||
Name
|
Ticker
|
Chosen By
|
Starting Market Cap
|
Starting Share Price
|
Kromek
|
KMK
|
@JohnRosier
|
£85m
|
76p
|
Thalassa
|
THAL
|
@Greenroom78
|
£69m
|
292p
|
Plethora
|
PLE
|
@alexgerrard
|
£55m
|
12.75p
|
Solomon Gold
|
SOLG
|
@colinthecops1
|
£52m
|
8.5p
|
Range Resources
|
RRL
|
@paul18280
@X1ACX
|
£43m
|
1.3p
|
Fastnet
|
FAST
|
@blue2_u
|
£41m
|
12.5p
|
Baobab Resources
|
BAO
|
@blacklabAlf
|
£40m
|
13p
|
Westminster Group
|
WSG
|
@X1ACX
@alexgerrard
@richylawson1981
|
£34m
|
74p
|
Coms
|
COMS
|
@X1ACX
@richylawson1981
|
£33m
|
4.2p
|
Sirius Petroleum
|
SRSP
|
@qprallan
|
£31m
|
3.25p
|
For the full list of all 41 stock picks please read the following link ... http://timpronkster.blogspot.co.uk/2014/01/2014-top-twitter-hot-stock-picks.html
Kromek (KMK)
Kromek arrived on AIM in October 2013 and describe themselves as a pioneer in
digital colour imaging for x-rays, materials technology and advanced 3D
imaging. In their words they are “changing the way we see the world”. Their
focus is on highly specialised semiconductor materials which are used in
detectors of x-rays, gamma rays, medical imaging, security screening (including
civilian and military markets), industrial inspection and space exploration.
Kromek also supply x-ray imaging equipment which provides
real 3D x-rays for the first time without specialist viewing equipment. They
are targeting application in nuclear (cell) detection, including forms of
cancer screening, as well as for a growing trend for networked sensors which will
create significant additional opportunities. In summary, they are working
across three key sectors - medical imaging, security screening and nuclear detection.
Their recent half year report to end of October (released 8th
January) shows sales growing quickly up to nearly £2.4m versus £0.7m same period
year prior. That turned a gross loss to a gross profit albeit administrative
expenses still left them with an operating loss following their IPO in October.
They did repay all £3m of their debt at this time however so are debt free.
They have secured a $5.3m development deal as a partner to four top OEM’s in
the market and another contract just short of $1m. Their security screening
business saw multiple contracts awarded for their airport bottle scanners and finally
their Nuclear Detection business won contracts worth up to $3.7m. They own 70
granted patents with 110 pending. Arnab Basu, CEO, commented “Kromek is
currently growing strongly as we enter the rapid commercialisation of our
business, utilising our powerful IP and technology platforms”
Looks like a nice little company with fast growth and one which seems to
be moving to greater commercialisation throughout 2014.
Thalassa (THAL)
Thalassa Holdings Ltd is focussed on marine
seismic operations. Their corporate strategy is "Exploration and
Beyond". The "Exploration" part focuses on frontier activity
and/or challenging locations, whilst the "Beyond" part focuses on
production activity and securing opportunities in permanent reservoir
monitoring. So a mix of higher risk challenging projects and lower risk mature
production projects. Sounds interesting so far.
Alongside their technical expertise and
consultancy in marine seismic operations they also operate, via a subsidiary, three
portable modular source systems (PMSS™). These PMSS™ generate seismic source
for use in seismic acquisition in oil and gas exploration. The equipment is
temporarily installed on the back of a platform supply vessel.
Recent performance looks promising and the share price has risen strongly. On 8th January the board announced that they expect to significantly exceed market expectations for the full year 2013. Turnover is expected to be broadly in line but “operating profit and earnings per share to beat expectations by more than 10% and 20% respectively”. Results will be out week commencing 17th March but capital expenditure is forecast to increase as a result of increased business interest recently. They plan to refurbish two compressors recently acquired and build a mini PMSSTM for use in the high resolution 3D sector.
Interestingly over 3m shares have just been
bought by the company (from the Chairman and from treasury) to hold in trust on
behalf of all employees to reward performance and potentially share future
profits more equitably amongst employees. I like this too. In my opinion it
shows a progressive mind set amongst the board and should enhance employee
engagement and therefore performance (I would say that working for one of the UK’s
largest employee owned companies!) One to watch and to do more research on to
check the current SP versus financial performance as it has risen strongly.
There are only 24m shares in issue so not a big float at all.
Plethora
(PLE)
Plethora is focussed on
a sector that being honest I’m not interested in - the health industry. From an
investing perspective it generally scares me due to the volatility of share
prices (that’s rich I hear you cry when I bang on about oil and gas explorers) Presumably
either a product works or it does not and for this reason I’m not sure how you
pick your investments? That said I will keep PLE in the list as it’s not my selection.
Plethora has a product that they hope to
launch, PSD502, which is a spray for the treatment of premature ejaculation. They
anticipate a launch in 2014. Premature ejaculation is possibly the most common
form of sexual dysfunction in men and there is currently no globally approved
and effective pharmaceutical treatment for this condition. (Note the word
“pharmaceutical” which I presume means they therefore exclude alcohol J ) So the market potentially offers significant potential for development
and growth
Plethora is engaged in discussions with
potential partners to agree the manufacture, licensing, product size and
format, launch plans, marketing etc. A lead manufacturer has already been
identified. Dependant on the moving parts all coming together the launch of the
product is planned for mid to end 2014. In addition to European approval
already received, a submission to the US Food and Drug Administration is being
prepared which would open up a significant market “at least as big as Europe”
The Chairman commented “The board is committed
to the delivery of commercial value at the earliest opportunity in 2014… and ....the
company intends to see the launch of PSD502 at the earliest opportunity”. Not
one for me, but if you are interested it seems that much of the R&D is
complete and that they are moving towards launch this year.
SolGold (SOLG)
SolGold is based in Queensland, Australia and
its strategy is “to be an integrated gold and copper discoverer, developer and
miner”. SolGold's projects are located in northern Ecuador, Australia, and the Solomon
Islands and consist of the following:
·
Ecuador - a joint venture on
the Cascabel copper-gold project. The company have just announced the results
of a drill which indicate the discovery of a large high grade copper gold porphyry
system. They are apparently the best results of all of the stage one drilling
that they have done recently.
·
Australia - 100% interest in the
Rannes, Mt Perry, Cracow West and Normanby Projects, all in southeast
Queensland. The Rannes project has indicated and inferred
resources of 18.7 million tonnes at 0.9 g/t gold equivalent (296,657 ounces of
gold and 10,137,736 ounces of silver).
·
Solomon Islands - the
Fauro Project on Fauro island, and the Lower Koloula, Malukuna and Kuma
licenses on Guadalcanal. A JV partner is being sought for the Fauro
project to pursue drilling of gold-copper targets defined in the 2011
exploration program.
Board and Management hold approximately 15.1%
of the issued share capital which should indicate an aligned interest between
board and investors. They have completed a number of placing over the past year
which puts me off but to be fair the share price has risen from 2p to 8p over
the past 12 months. The directors have also participated in the placings so you
can make your own mind up on this choice.
Range Resources
(RRL):
Range probably doesn’t need much introduction as most PI’s
seem to have been long or short on Range at some point over the years. However,
since 2011 being short would have been the only way to make any money, much to
the despair of many a small PI. Range has interests and licences spread across
the world from Guatemala, Georgia, Colombia, Somalia, North America, and
Trinidad as follows:
·
Georgia – 45% interest in licence with 3P of
203Bcf of gas
·
Puntland – 20% interest in 2 licences with
estimated undiscovered oil in place of 3.2bn barrels.
·
Colombia – 65% interest in licence with c.5.5m
barrels undiscovered OIP
·
Guatemala - 29% strategic stake in Citation
Resources with 2P of 0.74m and 6.4m contingent resources
·
Trinidad – 20.2m barrels of 2P reserves owning
100% of 3 blocks.
·
Texas, USA- producing gas assets which they have
been in the process of selling for $30m for around 18 months. Must be the
longest sale process ever but apparently they are close to completing.
Range is producing somewhere in the region of 800 bopd (although they haven’t released an update on this for a long while), mostly from their Trinidad assets. They aim to increase this to 4000bopd by the end of this year (but don’t hold your breath). I gave up on the Range dream a couple of years ago so am biased. I accept they have some good prospects but the key for them in 2014 will be can they deliver on their promises? The SP is back at all time lows so if they can then there is every chance of a good outcome in 2014. But they also now have over 3 billion shares in issue, so any value added has a lot of shares to be divided across. Please DYOR. If you are interested I made a comparison of Range with a different Trinidad focused oil company, Trinity here
Fastnet Oil and Gas (FAST)
Fastnet is an E&P O&G company focused on near-term
exploration. They have two areas of interest - Morocco and the Celtic Sea. Both
of these areas are hotting up. The Celtic Sea is attracting interest following
the successful Barryroe appraisal and Statoil’s Bay du Nord Discovery in a
similar geological basin offshore Canada. And Morocco has attracted big players
in the last year including BP, Chevron, Cairn Energy, Genel and Total.
·
Morocco. Fastnet have an exclusive option to
farm into eight onshore exploration permits (the Tendrara Lakbir Petroleum
Agreement). An independent assessment of these areas shows gross contingent
recoverable resources between c.311 BCF (Best) and 892 BCF (High) for the TE-5
structure. A farm out agreement has also been signed with SK Innovation for the
Foum Assaka Contract Area where SK Innovation will contribute to past costs and
up to a two well carry on the Eagle Prospect (first exploration and appraisal
well or 2 exploration wells). Well planning is underway for the first FA-1
well, estimated to contain 360 mmboe of Pmean resources.
·
The Celtic Sea. Fastnet have completed the
largest ever 3D seismic in the Celtic Sea over the Mizzen, East Mizzen and Deep
Kinsale areas. A farm-out process in relation to all or
part of the Celtic Sea areas is ongoing with a view to concluding this process
to allow a potential 2015 drilling program. This remains key to unlocking an
affordable way forwards in this area.
Fastnet had US$10.9 million cash at the end of September
2013 having completed a £10m fundraising before costs. They made a net loss of US$856,000
for the period ending September but are fully funded for their 2014 on and
offshore Moroccan drilling programme
Baobab Resources Plc (BAO)
Baobab is focused on Mozambique where it is
currently completing a Bankable Feasibility Study ('BFS') at its pig iron and
ferro-vanadium project in the Tete province. This is one of Africa's fastest
growing mining and industrial centres. Their most recent operational update
highlights were as follows:
·
Boabab’s 2013 drilling
campaign was successfully completed with the ambition being to convert the
upper portions of the Tenge resource block, representing a minimum 10 years of
operation, to a JORC compliant measured category. Preliminary results are
expected this month (January) with a revised resource statement expected by the
end of Q1.
·
Test work carried out in
2013 confirmed that a low impurity pig iron product could be produced using
Baobab's iron ore and local Mozambique thermal coal see RNS here dated 4 March
2013.
·
Further tests are on-going
and will provide the first data on the composition of the vanadium and titanium
slag by-products. Results are expected in early 2014.
·
Discussions regarding port and
rail allocation are making solid progress and are expected to be formalised
shortly by way of a Memorandum of Understanding.
·
Mining title and industrial
licence applications are being prepared for submission in January 2014. The
environmental impact assessment ('EIA') and associated resettlement plan and
community and enterprise development programme are making good progress.
Westminster
Group Plc (WSG)
Westminster Group is involved in the supply of system
solutions and products to the security, defence and safety markets worldwide.
Their principal activity being the design, supply and ongoing support of
advanced technology security solutions. This includes surveillance, detection,
tracking and interception technologies as well as long term managed services
contracts such as the management and running of complete security services and
solutions in airports, ports and other similar areas. It also includes manned
services, consultancy and training services. The majority of its business comes
from governments, agencies, NGO's, and blue chip organisations. The Group is
represented in 48 countries with a strong focus on Africa, the Middle East and
Asia and has two internationally focussed divisions - Managed Services and
Technology.
Last year saw Westminster restructure its business, dispose of a couple of misaligned subsidiaries, win numerous contracts, and raise just over half a million pounds drawing down on its equity financing facility (EFF) with Darwin. This appears to have been done at a premium to the share price on each occasion. Impressive! At the same time they have reduced their debt considerably following the earlier restructuring and division of the company into the two trading divisions. On the back of this the share price has risen from around 35p to stand at just over 80p today.
At the last interim results to the end of June and since this date they have announced the following:
At the last interim results to the end of June and since this date they have announced the following:
· Revenue from ongoing
operations £4.7m (2012: £4.8m). Aviation Division revenues +214% to £1.44m
·
Gross Margin +40%. Operating
EBITDA +350% to £0.18m (2012: £0.04m)
·
Significant progress in
signing further long term Managed Services contracts and numerous other
discussions underway.
·
Debt reduced from £3.29m on 19th June
to £830,000 as of 29th October
·
Appointed as a strategic
partner for security with International Air Transport
·
Significant progress on
delivery of a $3m East African screening project which is awaiting certain
final procedural formalities.
·
Acquired business of
Aviation Security and Training business GXS Aviation
So they have had a good 2013 and look well set to continue
to grow in 2014. The share price has already risen strongly, but there is good
reason as to why. One to research further me thinks.....
COMS Plc (COMS):
Coms is an end-to-end provider of
telecommunications and IT services to business and industry. They offer a full
range of services across VoIP, smart buildings, broadband and infrastructure.
They pride themselves on service, innovation, passion and dedication, and own
and operate their own UK based Carrier Class telephony platform.
Recent trading looks promising. Their most
recent update had the following highlights:
·
Trading in the 9 months to October 2013 was
strong, with revenue and EBITDA in line with management expectations. The
company enjoyed record order levels and healthy cash generation
·
Promising order book for the remainder of the
year. Confident of prospects for full year.
·
All acquisitions made during 2013 expected to be
fully integrated by the year-end.
·
Confidence in ability to achieve organic growth
demonstrated by 2013 contract wins with Taunton & Somerset NHS Trust,
London Borough of Barnet, University of Kent, North Wales Hospital, Surrey and
Sussex Healthcare, Harrogate District Foundation Trust, West Midlands NHS Trust
and Gateshead NHS Foundation Trust.
·
A new headquarters and “centre of excellence” in
Buckinghamshire opened and is operational with the capacity for increased
headcount and activity in the future.
At the time, Dave Breith, CEO, stated: "This has been a
transformational period for our business and I am looking forward to updating
our shareholders on our last quarter's trading performance and publishing our
full year Group accounts following our year end on 31 January 2014"
Sirius
Petroleum (SRSP)
Sirius Petroleum has been focused on oil and gas development
and production opportunities in Nigeria for the past 3 years. They’ve entered
into an agreement to fund the development of the already discovered Ororo
marginal oil field, located in shallow waters offshore Ondo State, Nigeria. The
field is adjacent to a number of other producing fields, all of which are
operated by Chevron. Chevron discovered the Ororo field in 1986 with the
Ororo-1 well, which found hydrocarbons over 12 reservoirs. The well flowed at a
combined rate of c.2,800 bopd from two oil producing sands. In December 2013 Sirius
announced that Schlumberger had completed an independent field evaluation study
on the Ororo Field which confirmed significant recoverable resources higher
than the Company's original estimates (P50 - P10 recoverable oil from the
Ororo-1 well estimated at 10.0MMstb - 12.8MMstb).
Sirius also announced that it is to embark on the
preliminary process for a re-entry on the Ororo-1 well. Seven oil bearing sands
were identified and no oil water contact was located in any of the reservoirs. The
combined results suggest the exploitation potential of the field is good.
Schlumberger have been involved from the very beginning and Sirius are in
discussions with them to provide project management and drilling services to
accelerate the development plans and get to first oil. Sirius also have an
off-take agreement already in place with Glencore Energy UK
Limited which includes the potential to provide a conditional pre-financing
facility of up to $65 million, the repayment of which will be made against
initial sales of oil.
The downside is that Sirius has no producing assets yet and
therefore no meaningful cash flow. They seem to be managing costs carefully but
nevertheless operating losses in the half year to end of June
2013 were $1.24m. Finance costs of $2.088 million reflected the interest and
charges on short term working capital funding. Total
comprehensive loss was $3.26m. They since announced that they have additional
options with which to fund the development of their first farm-in and to
acquire additional assets and are at an advanced stage in
this process. During the last year however they issued a total of 857k shares in settlement of fees at 3.5p and arranged a placing for
123m shares raising £1.8 million. These funds were to provide additional
working capital whilst Sirius finalises the terms of the financing required to
develop the portfolio of oil and gas assets
Their Chairman stated “Sirius has attracted a
range of options with which to fund the development of our first farm-in and to
acquire additional assets. The recent new funds raised by the Company
provide us with working capital ahead of securing our main funding facility
which is now at an advanced stage. The Board is confident that the
Company is on course to successfully deliver the strategy to build a
substantial portfolio of oil and gas assets”
The potential of the discovered oil field,
higher than anticipated recoverable oil evaluation report, off take agreement,
relationship with Schlumberger, and decent flow test on the well all seem
positive. The funding would remain an issue for me as I’m not so keen on
companies that have a long way to go before turning resources into producing
assets and there is no indication of how long this wait will be, but among the multitude of O&G exploration companies Sirius seems to me to be better set
than the average. DYOR.
To see the full list of all 41 stocks, click here
To see the overview of the first group, click here.
Thanks and happy researching!
Great post, I appreciate you and I would like to read your next post. Thanks for sharing this useful information.
ReplyDeleteBlur Group
Fastnet oil
Comms plc