With Japan expecting another QE, EU remains soft and China facing the threat of a hard landing, the Federal Reserve has decided against raising interest rate in the short term. Many expect it to be Q1 2016. Gold is shining now. With many gold mining stocks having had their marketcap reduced by some 80%, now's the time to buy some.
3 stocks you could explore:
ASX listed Newcrest Mining (NCM) and St Barbara (SBM) and US listed Barrick Gold (ABX)
Please do your own research before buying.
My disclosure: I own shares of SBM.
Tuesday, October 6, 2015
LGO RAISED 1M POUNDS
LGO reported that it has raised 1M Pounds by issuing 111,111,110 new ordinary shares at 0.90 pence a share as working capital to be deployed for drilling purposes at the Goudron Field targeting the Goudron Sandstone. This did not go down well with investors and provide an opportunity for short sellers to pound on the stock.
Nevertheless, it is a step in the right direction to target the Goudron Sandstone which has a more consistent flow rate as demonstrated by Well GY672, very much unlike the C- Sands which has a high depletion in the flow rate.
I think LGO knew of the shortcomings and therefore realigned their strategy. The drill to the C-Sands however are not put to waste as it has provided LGO with invaluable data to plan for a water flood in the future.
My disclosure: I won shares of LGO.
Nevertheless, it is a step in the right direction to target the Goudron Sandstone which has a more consistent flow rate as demonstrated by Well GY672, very much unlike the C- Sands which has a high depletion in the flow rate.
I think LGO knew of the shortcomings and therefore realigned their strategy. The drill to the C-Sands however are not put to waste as it has provided LGO with invaluable data to plan for a water flood in the future.
My disclosure: I won shares of LGO.
Monday, October 5, 2015
LEG SHOT UP 50% IN EARLY TRADE YESTERDAY. HERE'S WHY
LEG shot up 50% in early trade yesterday before settling at 0.107 pence, an increase of 33.13% over its opening price.
LEG reported that its investee company, Virtual Stock (VS) valuation has gone up to 58M Pounds from 25M Pounds a year earlier. With a 7% stake in VS, this puts the value of LEG's stake in VS alone at more than 4M Pounds, higher than its current marketcap of approximately 2M Pounds, and that excluding its other investments.
On top of that, VS reported that Nick Jenkins, the founder of moonpig.com has bought a small stake in VS. Nick has been actively investing in start up businesses after he sold moonpig,com for 120M Pounds. His purchase of a stake in VS is a timely endorsement.
My disclosure: I own shares of LEG.
LEG reported that its investee company, Virtual Stock (VS) valuation has gone up to 58M Pounds from 25M Pounds a year earlier. With a 7% stake in VS, this puts the value of LEG's stake in VS alone at more than 4M Pounds, higher than its current marketcap of approximately 2M Pounds, and that excluding its other investments.
On top of that, VS reported that Nick Jenkins, the founder of moonpig.com has bought a small stake in VS. Nick has been actively investing in start up businesses after he sold moonpig,com for 120M Pounds. His purchase of a stake in VS is a timely endorsement.
My disclosure: I own shares of LEG.
Friday, October 2, 2015
ANOTHER STERLING PERFORMANCE FROM NAGACORP
Nagacorp reported that it January - September revenue increased 47% while its VIP gaming increased 52% from a year ago.
Compared to its peers in Macau, which are experiencing a drop in both revenue and VIp gaming, Nagacorp stands out as a BUY.
My disclosure: I own shares of Nagacorp.
Compared to its peers in Macau, which are experiencing a drop in both revenue and VIp gaming, Nagacorp stands out as a BUY.
My disclosure: I own shares of Nagacorp.
CREDIT SUISSE: MACAU GAMING STOCKS CORRECTION OVERDONE
Credit Suisse reported that the Macau gaming stocks correction is overdone and so far the hotel booking of rooms in the Golden Week has been satisfying.
Macau also reported that its visitorship rose 7.6% on 1 October 2015 compared to a year ago.
Credit Suisse top pick is Sands China.
Many of the Macau casino stocks have inf act fallen almost 70% from their record highs. This could be an opportune time to invest in some bigger names like Sands China, Wynn Macau and Galaxy.
Nevertheless, for some lower risk exposure, Nagacorp is another good alternative as their dividend yield is high. Its 2015 dividend payout is HK$0.3704 and this represents a 7.5% yield based on its current price of HK$4.92.
Moreover, its VIP gaming has gained vs the the fall in Macau casinos.
My disclosure: I own shares of Nagacorp.
Macau also reported that its visitorship rose 7.6% on 1 October 2015 compared to a year ago.
Credit Suisse top pick is Sands China.
Many of the Macau casino stocks have inf act fallen almost 70% from their record highs. This could be an opportune time to invest in some bigger names like Sands China, Wynn Macau and Galaxy.
Nevertheless, for some lower risk exposure, Nagacorp is another good alternative as their dividend yield is high. Its 2015 dividend payout is HK$0.3704 and this represents a 7.5% yield based on its current price of HK$4.92.
Moreover, its VIP gaming has gained vs the the fall in Macau casinos.
My disclosure: I own shares of Nagacorp.
US OIL RIGS COUNT DROPPED TO 614
US oil rigs count dropped by most in recent weeks, falling 26 to 614.
Oil rose in as a result and ended the week at US$45.54 per barrel.
With US jobs falling below expectations on Friday (2 October), many are betting that the Federal Reserve could delay the increase in the interest rate to 2016.
We could see oil price moving upwards into the US$46 - US$47 range next week.
Nevertheless the Federal Reserve could still surprise and initiate a hike in interest rate, but a better gauge will be the Q3 GDP reading.
Oil rose in as a result and ended the week at US$45.54 per barrel.
With US jobs falling below expectations on Friday (2 October), many are betting that the Federal Reserve could delay the increase in the interest rate to 2016.
We could see oil price moving upwards into the US$46 - US$47 range next week.
Nevertheless the Federal Reserve could still surprise and initiate a hike in interest rate, but a better gauge will be the Q3 GDP reading.
MORE SHALE COMPANIES COULD FILE FOR BANKRUPTCY DUE TO FINANCIAL DISTRESS
Oil price has remained in the US$40s per barrel. With mounting debts and low revenue, many shale oil companies could find themselves in financial distress in the next few months due to the following factors:
1) Data from the US Energy information Administration showed that the percentage of debt service vs operating cash flow has increased from 40+% in Q1 2012 to 80+% in Q2 2015. This means that a large chunk of the revenue is used just to service debts. How long could these companies last?
2) Oil price at persistently low levels is not helping either, despite the fact that many producers say that they are improving their efficiency and that they could produce more at lower costs. This is true, but will they ever generate enough cash to pay off the debts and capital invested in field. Most companies use EBIDTA to measure their progress. This is hugely misleading as we now know that the Interest (from debts) is high and so is the Depreciation (investment in oil field and machinery).
3) Financial institutions will be reviewing US shale oil companies from October - November whether to increase, maintain or reduce their credit lines. Some may not meet the new standards due to a shrinking balance sheet.When oil price declines, so too will be the value of the oil fields.
Here's an interesting article from thestreet.com which highlights the number of companies which could face some fianncial challenges ahead.
http://www.thestreet.com/story/13301491/1/how-many-more-oil-gas-companies-will-file-for-bankrptcy.html
1) Data from the US Energy information Administration showed that the percentage of debt service vs operating cash flow has increased from 40+% in Q1 2012 to 80+% in Q2 2015. This means that a large chunk of the revenue is used just to service debts. How long could these companies last?
2) Oil price at persistently low levels is not helping either, despite the fact that many producers say that they are improving their efficiency and that they could produce more at lower costs. This is true, but will they ever generate enough cash to pay off the debts and capital invested in field. Most companies use EBIDTA to measure their progress. This is hugely misleading as we now know that the Interest (from debts) is high and so is the Depreciation (investment in oil field and machinery).
3) Financial institutions will be reviewing US shale oil companies from October - November whether to increase, maintain or reduce their credit lines. Some may not meet the new standards due to a shrinking balance sheet.When oil price declines, so too will be the value of the oil fields.
Here's an interesting article from thestreet.com which highlights the number of companies which could face some fianncial challenges ahead.
http://www.thestreet.com/story/13301491/1/how-many-more-oil-gas-companies-will-file-for-bankrptcy.html
Subscribe to:
Posts (Atom)