Skip to main content

Your stock market edge

As we have no chance of winning any war, whether military or otherwise, it is rather ironic that the concept of conscription has been mooted this week. Nevertheless, with apparently no values, or borders worth defending, it may be that the alternative idea of national service would be a winner. It would certainly set the cat amongst the pigeons as far as giving the knife crime and mugging brigade something else to do. The only danger is that national service, or indeed conscription may put off some people coming to this country seeking a better life.

Helium One Rises

It was suggested here at the time of the December fundraise at 0.25p, raising some £6m, that the discount was so brutal there was a decent risk / reward from those share price levels. This has proved to be the case, and provides us with some lessons. For instance, HE1 was not shy in going for a second autumn fundraise, perhaps when others might have thrown in the towel. In addition, all its RNS’s were positive through the period, whatever the result, underlining the power of positive messaging. The latest one was interesting in this respect: twenty times background helium shows, and over two thousand times background hydrogen shows. However, the update did not tell us what the industry standard is for multiples of background for a bankable asset? But at least the latest news suggests that HE1 is not a duster, and therefore probably deserves a market cap of north of the £21m currently at 0.62p. Nevertheless, until we are clearer on what the company is actually sitting on, one would suggest that sustained price action above 1p / £30m may be pushing it.

The Week’s Risers

Of course, the main topic in the coffee houses of the City is whether 2024 will be the year for the small cap turnaround, and whether there are any green shoots? In fact, Helium One has already been a decent win for those with faith in the space, and during the week it was joined by some other decent contenders. For instance, the run up to what appears to be a luxuriant crop for Hydrogen Utopia’s (HUI) medical cannabis crop next month pushed up its shares nearly 50%. Corcel (CRCL) continues to feel the benefit of last month’s positive drill results in Angola, and back above 1p looks as though it is ready to revisit recent highs above 1.3p.

Interior components supplier, which few have heard of, CT Automotive (CTA) saw its shares continue to soar as it revealed a sharp swing into the black. Above 70p it looks as though the shares could clip 100p by the end of next month. Those who enjoy a wildcard play will have noted how shares of Sudan focused upstream oil play Wildcat (WCAT) bounced off the 0.2p zone once again. Even a glimmer of long overdue positive news in coming days could see the stock revisit recent 0.5p resistance in quick time.

Echo Energy (ECHO) resumed its recent recovery in the wake of last month’s debt restructuring news, and the previous month’s new CEO news. It would appear that the turnaround does have legs here, and that above 0.1p – old December support, the shares could push ahead to the 0.25p zone in coming weeks.

Golden Metal Resources (GMET), was a situation where the fundamentals followed the technical, which have been hot for some time. The trigger for a 50% share price rise this week, which everyone and their mother has been claiming the credit for, was officially bonanza silver at Garfield. However, one could say that the company was jumping up and down ahead of this news, in singing its praises, off the back of prospects for its strategic Pilot Mountain tungsten asset. The key here is actually the merit of having a geologist, Oliver Friesen, as CEO. This obviously takes a lot of the guesswork out of discovering what it under the ground.

On The Downside

One of the surprise fallers of the week came in the form of CleanTech (CTL). The surprise here is that the Chile focused multi-project group has already raised enough cash £8m at the end of last year to advance its plans, a point underlined by the way that this week the company announced the start of its drilling campaign at Laguna Verde. 14p seems particularly harsh given the much of the hard graft has already been done here.

Shareholders of First Class Metals (FCM) may also be thinking that they have been treated harshly, perhaps not so much by the market, as by a seller. Recent news last month regarding spodumene at ZigZag could have been regarded as a company maker in its own right. Indeed, once the last of the bedwetters here is out, one would imagine that this will still be the case.

Another company which was also in the “hard done by” category Zenova (ZED), saw its shares fall this week, even though this month has witnessed a company of very strong sounding RNS’s. The first was expansion of its fire safety offering into Latin America, and the second a deal in Germany. All of this comes after last month’s confirmation that its extinguishing fluids have been confirmed as fully compliant in accordance with EU standards. Once again, the groundwork has been set for a rebound in the stock.

Finally, as an example of how cruel the stock market can be, one can bring forward the example of Xtract Resources (XTR). On the face of it news of the proposed disposal of the Manica Gold Project for $15m was an absolute winner, especially as this is actually more than the present market cap of the company. However, after a few minutes the market read through the RNS in question and noted that the $15m will be payed in stages over the next three years. So this apparently merits the shares being lower at the end of the week than they were before the news was announced? It is a funny old world.