Category Archives: My positions

(Late) Review of My first years investments

My end of first calendar year investing review and yes its very late! I had written but not published. I thought it might still be of interest to some so hear it is….with a couple of updates clearly marked.

I will try and keep this to an analysis of my trades in 2012. The good, the bad, the ugly. I only really started 5 months ago but it’s a new year and seems appropriate to look back.

Gulf Keystone Petroleum – GKP – What a share! For many GKP will lead to early retirement in the sun or financial ruin. People seem prepared to bet it all on this one. Poetry and dreams shared on message boards show how some have fallen head over heels in love. GKP illustrates my growing maturity as an investor as I was almost swept along in the hype, tempted to pile in. Since those heady days I have come to view GKP in a more objective way, understanding the risks (and there are risks!) and potential catalysts along the way. Importanly I also understand that this is not a magic amazing investment, a one of a kind, but that in fact there are many oppurtunities that offer perhaps better risk/reward.
I bought in at just over 200p but sold over half my holding at a slight loss when the case did not finish early and now the judge takes his three months to consider the evidence. I will add a little more nearer the end of the court case hoping for a short term re-rating as the case ends and takeover rumours ignite. The court case sounds tenuous, GKP likely to win. From then on it’s a bet on Iraq politics and the chances of a takeover. Yes oil will find a way eventually, but perhaps not for many years and without future better buying opportunities. I will be looking to be out of GKP before mid 2013 as Exxon are due to start drilling in an Iraq/Kurdistan disputed area, the commencement of which Iraq says will lead to armed conflict. Cue share price plunge…. And then rise again when a ceasefire is brokered shortly afterwards. Blimey, there’s the danger I might convince some people I actually know what I’m talking about here!

Update: Ive since sold two thirds of my position as the court case didnt end early. Result is due in two months and i expect a slow drift downwards during the vacuum.

Frontier Mining – FML – Ok I confess I don’t know what prompted me to buy these! I’m no expert on mining and I don’t even know all the facts. Asking for it aren’t I! At a glance though I’m still keen despite this being my biggest loss so far. It’s drifting downward on no news as the newly producing mine is shut down during the harsh Kazakhstan winter. I believe that some spring 2013, this could re rate as the mine starts producing and people realise that its not just a tin pot explorer anymore. The company has low investor sentiment after missing targets and poorly communicating last year. I think this presents a buying opportunity at these levels.
What I’ve learnt is that market sentiment, and trend, really need to be taken into account to get the best possible entry and exit points. I could have thought to myself, hold on, wait, the SP is drifting down, there are no likely catalysts in the next few months, hold your fire.

UPDATE: mining stocks rose along with other shares during the last 3 months, Frontier are back at the level I bought them hoorah. I continue to hold.

Thalassa Holdings and Northbridge Industrial -THAL and NBI – I’ll cover these together as they are at about the same level as that at which I bought. Again I am not 100% clear why I bought these. They both offer somewhat attractive P/E ratios and seem to be trading well. But on the whole I believe there are better bargains to be had, despite them being good companies. I think results in early 2013 will be positive and I’ll likely sell at some point to free up cash. These were really amongst my earlier purchases and I was keen to get involved and own shares. I wanted to make money and didn’t appreciate the number of potential investments I would come across. I have absolutely learnt to invest only when I have high conviction – that opportunities will present themselves and to wait for the right ones.

UPDATE: idid sell NBI for a small profit but held THAL after further analysis…. Great decision they have tripled on new contracts 🙂

Trinity Mirror – TNI – Oh how I’ve admired this share since it was low but never really believed it would re-rate. I put this down to my initial disbelief( from being a beginner) rather than on TNIs merits. I eventually bought in at about 70p only for it to hit my stop loss, then take off again Seversl weeks later. Since then I’ve kept out as I believe the phone hacking claims will lead to a better buying opportunity.
Capital Drilling – CAPD – The biggest success so far. Tipped on twitter by WShak the Motley Fool stalwart. Brief invetigations showed that the days 40% drop corresponded to news of its customer Centamins (CEY) mine being shut again in Egypt. CAPD was already cheap by most measures, was now silly cheap and was not reliant on CEY. This seemed a no brainer and sure enough large gains were mades within a week as the Egypt mine reopened. Its currently at 34.6p and still cheap. I’m glad I took this opportunity, profiting from market over reactions is something I’m looking to do more in 2013. Regular use of Twitter and message boards should help me do this.

Nostra Terra – NTOG – A recent buy on the tip of a well known private investor/blog owner BrokerManDaniel. Recent well results wre good and he obviously believes that well results due soon for nearby wells have positive read across. It all sounds plausible and im happy to take a small punt with near term catalyst. Ill tell you what i’ve learnt from this once well results are out :-p UPDATE: results were good and I sold out on a rise. Decent profit.

ViaNet – VNET – A paulypilot favourite. Software developer for restaurants/bars who want to track drinks sales from the tap. Fairly easy idea to understand. Definately scalable. The company has undergone a transformation away from petrol forecourt systems in previous years so i think this company is somewhat misunderstood but will be re-discovered by investors if it can start producing good results. UPDATE: Underwhelming full yr results have pushed the SP lower. I continue to hold.

CarpetRight – CPR – Short – How can somethign so right be so wrong? Daring feats of levitation by Caprpetright keep its on a P/E of somethign like 50. Ridiculous. I’m even on this at present and wondering how much patience i have left. Recent results were in my view disappointing, they still make bugger all profit and Europe has worsened for them. Perhaps at some point some owners will wake up to the ridiculous magic carpet ride and sell leading to a re-rating.
This has reminded me that the market can defy logic, and of the famous phrase attributed to Keynes i think that the market can stay wrong longer than you can stay solvent.

JPR – Johnston Press – Short – I lost money as this rose and hit my stop following a results announcement that i took as fairly negative considering their significant troubles (debt, newspapers, cash flow etc) Obviously the market disagreed and i lost a small amount of money quite easily. I havnt researched this company further sice but at the time i don’t remember thinking this company has a great chance of survival. Nevertheless am i prepared to disagree with the market in the short to medium turn, risking untold losses if im wrong? No. Another trade that reminded me of the importance of market sentiment. Focusing on company fundamentals alone is not enough (in the short or medium term at least).

Falkland Island Oil and Gas – FOGL – A short term trade. Massive interest in this as results for the potentially massive Loligo well were due imminently. The market took a sudden drop just as results were expected. I speculated that this might be a news leak. Who knows but the drill result was disappointing and the share price dropped.

FGP – FirstGroup – Large company with debt expecting to maintain the dividend which was something silly over 10%. Maybe it was 13%. I bought prior to trading update and expected the price to rise once dividen guidance was maintained. Well the price didnt really react. Normally high yields are a sign that the market believes the dividend will be cut. It was only a short term idea so i sold out for about evens.

SRT – Software Technology – Very small loss. I tried to buy in before a results statement and the results weren’t as great as we all hoped. They still have a great product and the market is potentially huge but orders aren’t coming in . Could be great investment but its been a bit of a let down for past couple of years.
I’ve been reminded that buying in advance of results may or may not work. It helps if you have an insight the market doesnt – i remember years ago seeing SuperDry clothing everywhere and planned to buy in before the following results announcement….i wish i had!

SnoozeBox – ZZZ – Highlighted on Paulypilots blog. very intereting idea about portable temporary accomodation in refurbished shippig containers. It rallied well following positive trading updates. Rebooking rates are high but i sold once the value of the company started to look high for an unproven company still in its first year i believe.

Chariot Oil and Gas – CHAR – Message board rumours persuaded me to take a small position. Nothing happened. Price drifted. Only buy on your own conviction i no tell myself.
Aurelian Oil and Gas – AUL – Looked attractive in that last RNS said management were about to come to a decision about the companies future. Without going into the whole story this was likely to be a good strategic decision for the company. Made a small profit.

IndigoVision – IND – Another Paulypilot highlighted company. Very bullish trading statement about growth rates in its markets and wanting to match or exceed this. Following RNS was less enthusiastic and the share price reflectd this. Without such 20% growth promise i sold at a loss.

PV Crystalox Solar – PVCS – I’ve writen this up previously on my blog and on the Motley Fool message boards. I still hold at a paper gain and expect this to rise further until management disclose the restructuring terms and most importantly the cash return. 90m euros in cash. 50m euro mkt cap even after recent gains.

All in all I have learnt a lot and I am enjoying my new ‘part time job’.

BLVN – Bowleven – I’m in!

Some recent bulletin board discussion has caught my eye and i’ve bought some Bowleven. They recently made a potentially significant discovery and the market barely reacted. I’m in and waiting for the share price to catch up.

CAPD – Capital Drilling – Added

I forgot to post that i added to my CAPD position 2 days ago. Fortunately as the trading update i was pre-empting came out early – today! I read it as good and so did the market – up nearly 10% today.

http://m.londonstockexchange.com/exchange/mobile/news/detail…

The key points are:
There was a slowdown towards end of yr, ‘but fear of decreasing capital expenditure by miners is over done here:

‘We have also received confirmation of drilling activities from clients representing approximately 90% of our forecast revenue for 2013.”

They have planned reduction in capex 2013 which was 30m this yr. So next year if revenue is anything like this years, they will be throwing off cash, enough to fully pay off the modest 22m pounds of debt.

It was on a p/e of under 4, so its still cheap. I’m aiming for this to double and am happy to hold this long term.

Wanna buy a tenner for a fiver? SIGNET GLOBAL FIXED INCOME STRATEGIES – SIGG

I bought some SIGG on Friday after seeing a tweet about it. I’m writing this up quick so i’m vague on the details but go look for yourself. They are a closed fund that hasn’t done too well since it started several years ago. The share price has drifted and now stands a whole lot lower than the NAV. The NAV is 92p or thereabouts and the price to buy is about 55p. Ok so this disconnect between NAV and SP might continue forever…. but we have a potential catalyst.

They announced last year that they were wrapping up and liquidating the fund!! Great news for shareholders. The only catch is it will take a while. Around 35% is planned to be liquidated over 2013 and beyond that timescales are not known. Still there could be a cash return soon and this could spark interest and a narrowing of the SP and NAV.

Limited downside and lots of upside!!

GKP purchase

I’ve added to my Gulf Keystone Petroleum position. Price is travelling upwards over the last few day and i dont see that stopping for now. A lot of short positions are open on this company so i think a bit of a short squeeze will mean the price keeps rising. I think a bit of attention in the newspapers etc over the weekend could help too.

This is my largest portfolio position at present.

Review of recent trades

I’ve been busy starting a new job recently so not had time to blog often but I wanted to do a little round up of recent trades as I’ve been quite successful J

I bought more PVCS as outlined previously. These have seen a decent little rise but im holding tight as I expect more to come.

NTOG bought on a twitter tip has risen 6% and I’m still waiting on the news due soon about two other wells which if positive could spark a big gain.

CAPD has been the star performer and my best ever return. Up 60% (!!!) since buying on Centamins Egyptian problems where it dropped an inexplicable 40%. Centamin has things running again in Egypt and predictably CAPD has recovered well. It is still undervalued by many measures so im continuing to hold. Credit goes to WShak the motley fool boards heavy weight who drew my attention to this one.

My other held shares in GKP have continued to drift downwards, I hope to buy more soon because the court case looks weak and ceteris parabus these will jump on the court case result.

Carpetright continues to defy all known market efficiency theories. Its worth a fraction of its current value. This is undeniable. Recent poor results haven’t knocked it though so im still holding on for the day they fall through the floor…  I might be old and grey first.

Frontier Mining FML – is trickling down unendingly. Poor sentiment about this company and lack of news + mine shut down for the winter have left this drifting. I do believe when production restarts q2 next year these will be higher. Im also thinking of adding more at these prices but I think it will drift lower yet.

A good day!

Not often i see this, just the one share letting me down today 🙂

CORRECTION: Carpetright is a short so not so good there – anyway, 7/9 is good enough for me.

http://share-bear.co.uk/wp-content/uploads/2012/12/day-change-happy.png

 

 

Detailed summary of PV Crystalox Solar PVCS – Reiterate BUY

Ok, for those that haven’t heard of PV Crystalox (PVCS) already, here is my summary and the reasons I am invested. I read it as a great opportunity to double your money in 6-9 months.

BRIEF summary: Cash rich company preparing radical restructure and cash return to shareholders 2Q2013.

All figures in Euros.

Background: They are a manufacturer of multicrystalline silicon ingots and wafers. Business took a huge nose dive after cheap Chinese exports flooded the market. Prices fell. Over the last year they cut production, tightened their belts and planned to weather the storm, limping along until global prices picked up in the medium to long term. Share price diving all the while.

Results for 6 months ended 30th June showed….

  • Net assets (majority tangeable) just under 200m
  • Of which 122m euros is cash! (mostly won in court settlement from customer contract cut short).
  • Tiny Pension surplus
  • 32.6m 1H2012 sales,
  • 12.2m EBIT loss on 61mw shipments,(full yr shpments expected to be 100-120mw)

There are another 2 on-going claims but one defendant probably unlikely to pay. I do not know the size of these claims or what payout they could be. From the RNS:

“We have been unable to reach a satisfactory agreement with two long-term contract customers who have been amongst the industry leaders in recent years and we are seeking resolution under the jurisdiction of the International Court of Arbitration. While successful judgements in the Group’s favour are anticipated there is increasing uncertainty as to whether one of these companies will have the financial resources to fully settle its claim.”

They repeated “make the necessary decisions during the remainder of the year to serve the best interests of shareholders.”

19th November Management Statement marks a change in tone from management – importantly they mention return of cash.

“The Group has a strong net cash balance and the Board is continuing to reorganise the Group, to enable the return of cash to shareholders. The Board expects to make a further announcement before the year end.”

Reduced full year volumes expected 100-105mw

And then bingo!

13th December Trading Statement http://www.pvcrystalox.com/scripts/php/rns_viewer.php?id=20563710

“The Board has now completed a strategic review of the business which has taken account of these adverse market conditions and the Group’s significant net cash balance. The outcome of this review is that the Group will carry out a radical restructuring while retaining its core production capabilities and returning excess cash to shareholders.”

“The Group intends to adjust its operations to align with anticipated sustainable short term market demand so that the ongoing business will be broadly cash neutral in 2013.”

“The Group expects to return cash to shareholders during Q2 2013 in a manner that will provide shareholders with an element of choice as to the form in which they receive the cash. Further details on the process will be announced in due course.”

So if we take a guestimate loss for second half 2012 of 20m this leaves cash of around 100m euros at year end. Company planning to be cash neutral in 2013 which I’m guessing means they won’t be burning cash and so will have much reduced need for a cash cushion. They intend to close one German factory and reduce yet further UK and German production. If we say money raised from factory closure/asset sales matches restructuring costs then we still have 100m cash, a company with around 80m net non cash assets and a current market cap of £40m at 9.5p (about 50m euros mkt cap and 11.7 cents – at £0.81/euro)

So we have twice the current share price in cash and once again in tangible assets. They could give away half their cash and you would still be holding the shares and business/assets for free. The remaining court cases could provide an added bonus.

The question remains of course just how much cash they give away but management has certainly changed strategy and language from ‘conserve’ to ‘return’ cash. I’m invested here but would like to hear from others before I plough more in.

 

Shaun

Capital Drilling – CAPD – BUY

I’ve bought some capital drilling this morning after Centamin CEY suspended operatinos in Egypt. CAPD do provide services to CEY but they also have many other customers. The drop of 40% seems well overdone. Admittedly this is only a quick glance but the company seems profitable, has varied customers and i expect some sot of share price recovery sooner rather than later. Additionally we do not know the cost, if any from suspended work for CEY in Egypt. My guess would be that CEY will still have to pay some sort of fees to CAPD.

In at 16.19p

Remember these are all personal best guesses with my own money. Hopefully this website will show how profitable investing has been for me. But of course it might just show the opposite :-/

PVCS – PV Crystalox Solar – BUY!

Statement out today that indeed they plan to return cash to shareholders.

Restructuring, job losses, planning to be cash neutral next year all make me bullish about significant cash return. I have topped up on the fall, which i am very surprised about. Investors taking profits and knee jerk reactions to the loss for the year which is farily unimportant. This is a cash and assets play, ideally for shareholders the company would cease trading and liquidate.

http://www.londonstockexchange.com/exchange/news/market-news/market-news-detail.html?announcementId=11427622