This is the second part of the 24 stocks for 2024. Just to reiterate, the target prices are the minimum expected technical / charting levels the shares in question are expected to go to. This is unlike most broker note price targets… Ideally, if the targets are hit, they would be hit well before the end of 2024 in most cases. Obviously, if the share price falls below the suggested stop loss, the target is no longer valid. Stop losses are there to prevent the chance of being left holding the baby when a situation turns sour, a point that I do not see many others looking forward to the stocks of 2024, if anyone for some strange reason.
13. hVIVO: 23.75p Target 45p Stop Loss 16p
Rather unfairly hVIVO (HVO) shares were forced to regroup after the massive rally seen at the time of the pandemic. Nevertheless, the massive 137% gain for 2023, generally accepting as having been an unforgiving year, only serves to underline the progress made. There is the prospect of much more to come given the way that at 23.75p we are still some way off the best levels of 2021, at 40p plus. The driver, as has been the case for the recent past is the drip drip of new contracts for the world leader in testing infectious and respiratory disease products. The latest one was a bumper affair, a £16.8m full-service contract with an existing top five global pharmaceutical client. This allowed HVO to announce that it is trading ahead of previous market expectations driven by margin expansion. Coverage in The Times of the company being one of the stocks of the year should do HVO no harm at all, although of course it is being included in this list that really counts!
14. Hydrogen Utopia: 3.3p Target 8p Stop Loss 2.5p
If nothing else, Hydrogen Utopia (HUI), a company specialising in turning non-recyclable mixed waste plastic into hydrogen and other carbon-free fuels, this year managed to move up from Aquis to the standard list this year should be enough to prove enough the merits of the company. But after the initial celebrations of the “upgrade” the market has been keen to focus on those perennial bugbears of funding and rollout of the first waste plastic to hydrogen plant. Perhaps understandably, the company has sought to get on the EU green gravy train bandwagon, latterly in Ireland, something which should get over the line in 2024. To address the funding factor the company has played it smart in terms of its future share of medical cannabis producer Ohrid Organics. The North Macedonia based company should be turning on the taps as far as cannabis and cash by the end of Q1 2024, and one would expect the run up to this event to drag HUI shares off their recent lows. Such an infinite funding runway should then be more than enough to help the group finance the plants rollout, which after all is the big green imperative, as well as underlining the “getting paid to make money (via plastic waste) to make money from hydrogen production.
15. Incanthera: 6.5p Target 15p Stop Loss 4p
In a cynical market, and for those who have been around the block for some time, it is rare to encounter a company which inspires at first glance. However, in the case of Incanthera (ICA), a company which has innovative technologies in dermatology and oncology, it looks as though we have a sweet convergence of IP, timing, and a massive addressable market. It is also helpful for those coming to the story at this point that the heavy lifting of commercial product development is out of the way enough for its unique delivery technology to shine. The announcement this month of a commercial deal for the launch of Skin + CELL, ICA’s skincare range, with Marionnaud Switzerland and Austria, part of the A.S. Watson Group, can be regarded as a green light for the bulls. This is especially the case as ICA moves to communicate with the stock market regarding the merits of its unique offering, where it is apparent that we are only at the foothills of the opportunity.
16. i3 Energy: 11.25p Target 20p Stop Loss 8p
While there is plenty of huff and puff in the small cap resources, it is still the case that there are relatively few significant, well run producers in the space. Ironically, the market in its current mode is relatively loathed to give the few like i3 Energy (I3E) that stand out. We have been reminded of this in the wake of multiple director share purchase over the course of the autumn. The last notable one was from CEO Majid Shafik in November. All of these have been close to the 10p level. One can understand why given the way that shares of i3 were trading at more than double this level at the beginning of the year. On an operational basis, the company has got over the Q2 disruptions, so much so that for Q3 it was able to increase production enough to meet previous guidance. There is now little excuse for holding down the shares near 10p any longer.
17. Marula: 13p Target 25p Stop Loss 9.5p
Perhaps rather unusually in Marula, we have another three companies attached to story. This is because Marula (MARU), Unicorn (UMR), Shuka (SKA) and new listing Neo Energy (NEO) effectively come as a package. They have the common denominators of Jason Brewer, and Quinton van der Burgh of Q Global Commodities. This is significant for two main reasons. The first is that as most of us know to our cost, in a bear market the decisive factor with regard to a company’s success or failure is funding. The second is the strength of the management. Given that Q Global Commodities is a company with $60bn of JORC assets under its belt, possible access to this sorts out the funding aspect for MARU, UMR, SKA and NEO. As far as management is concerned, JB has proven himself to be one of the most proactive on the UK market in the recent past, getting on with the job, and delivering appropriate newsflow on a regular basis. If you add in the expertise of billionaire entrepreneur QVB, we have four companies that have an unbeatably foundation for 2024.
18. Panthera: 6.25p Target 15p 4.25p
We know that retail investors love a punt, and we clearly have a sprinkling of them (with stop losses) in the Top 24 for 2024. But with Panthera (PAT), it would appear we have a punt, but where the downside is de-risked. This is said on the basis that the diversified gold exploration and development company with assets in West Africa and India, is effectively hedged in its claim regarding its Bhukia Project in India. Perhaps typically, this is one of those situations where a small company has a project attractive enough for the country in it to decide that it would rather have it to itself. Normally, one might suggest that this is part of jurisdiction risk in developing countries. However, with the $13.6m backing of litigation specialist LCM Funding SG Pty Ltd, a company with a very high success rate, those involved in PAT are looking at a very attractive example of no win – no fee. While how much and when the company will cash in from its litigation, the size of the asset suggests that thick 9 figures cannot be ruled out. In the meantime we have a well funded company to develop its other projects.
19. Poolbeg: 9p Target 20p Stop Loss 7p
The rule that biotech stocks and the London market simple do not mix is one that is rarely broken, especially within the kind of bear market that we have at the moment. However, there are usually exceptions to rules, and Poolbeg (POLB) has managed to underline this, with the shares being up 50% this year. This is even more of an achievement given the way that many so-called Covid stocks have been pummelled in the wake of the pandemic, but this stock is proving that it can be one for all seasons. The obvious driver for the win here has been progress regarding the company’s flagship POLB 001 treatment for severe influenza, backed by the recent positive patent, and collaboration news. But there is more than a very positive 2023 backstory, news in November that three former Amryt Pharma board members are joining the company should be transformational. This is logical given the way that Amyrt achieved a unicorn $1bn plus valuation.
20. Sovereign Metals: 26p Target 50p Stop Loss 20p
One of the characteristics of the stock market in 2023 has been mispricing of small cap companies, no matter how good the underlying fundamentals. Sovereign Metals (SVML) has been one of the stocks underlining this fact in an outstanding way. Part of the block in terms of valuation in such situations is the need for companies in a cash conscious market to underline that their funding position is secure. This was effectively done in July by none other than the £21m investment by Rio Tinto (RIO), a move that effectively de-risks SVML going forward. Given that the company is sitting on the world’s largest rutile-graphite project in Kasiya, the arrival of Rio as sugar daddy, is one that should mean that it is job done, as much as for future development, but in the share price. Recent support for the shares has been towards 20p, but really the shares should be on the right side of all time highs through 50p last year, well before the investment by the mining giant.
21. Tap Global: 1.95p Target 6p Stop Loss 1.5p
Speculation over a Bitcoin ETF has meant that 2023 has seen Bitcoin and the cryptos end 2023 with a flourish. Rather typically for the stock market in London, it has been loathed to price the rise and rise of cryptos in related stocks. This was pointed out in the Bulletin Board Heroes just a few weeks ago, when crypto miner Argo Blockchain (ARB) was trading below 10p. It has since tripled to peak above 30p. The read across to regular financial and crypto super-app Tap Global (TAP). Indeed, one could argue that it makes for a safer proxy to the world of digital assets than Argo. Evidence for this comes from the latest update from Tap, which revealed that revenue hit £2m in the year to June 30 from £50,000 the year before. Even better, as BTC recovered in H2 2023 revenue in the five months to November was £1.0 million. With the company having kitchen sinked the costs for scaling up the business, particularly looking to the US, it can be expected that 2024 will be the year when Tap shines.
22. Tirupati Graphite: 16p Target 35p Stop Loss 12p
The exercise of picking out contenders for 2023 this time last year was certainly not one which rewarded anyone giving the benefit of the doubt to a small cap company. Indeed, even if nothing much went wrong (or right) a whole swathe of small cap stocks have fallen by a half, almost as a default setting. Part of the explanation, apart from investors hoarding cash, has been that companies where the narrative contains multiple moving parts, tended to be disproportionately punished. As far as graphite play Tirupati (TGR) has been concerned, the focus has been on the much anticipated road to production ramp up. In the autumn the shares received a boost from the China curbs, and really this should be the winning factor for TGR in 2024, whatever the vagaries of the graphite price, production levels, or funding. The latest reported swing to profit marks an obvious fundamental inflection point.
23. URA Holdings: 1.2p Target 3p Stop Loss 0.95p
On the face of it the investment premise behind URA Holdings (URAH) has been a no brainer from the start. Interestingly enough, as we end 2023, this state of affairs appears not to have changed. Indeed, it has only become stronger, in the wake of the latest fundraise at the emerald and strategic minerals company. The market is not behaving as if the £1m raised to reopen the flagship Gravelotte mine will indeed get production up and running. It has also never acknowledged that the company is sitting on JORC (2012) Exploration Targets totalling between 168 million carats and 344 million carats, which given the see through value of over $250m, it bought for a song. Given that production is imminent early in the new year, as opposed to many where D Day in this respect can be months / years into the future, then the current 1.2p share price / £3m seems like merely cheap call option money.
24. Wildcat Petroleum: 0.40p Target 1p Stop Loss 0.33p
Another possible rabbit out of a hat situation, which has already started to come to life and could partly live up to its name is Wildcat Petroleum (WCAT). The reason for saying this is that we have been waiting rather longer than expected for a production sharing agreement, not helped by the conflict in Sudan. Nevertheless, the shares have doubled in the past couple of weeks, and even though it has to be regarded as something of a wild card, the downside looks limited, and the upside could be stellar if the Man From Del Monte signs on the dotted line for WCAT. Those who have interest here should maybe check out the likes of Savannah Energy (SAVE), which recently kicked its moment of truth in South Sudan to February 1.
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