Toaster Tax
Apart from Lee Anderson being Lee Anderson, this weekend we wake up to the news of a forthcoming Toaster Tax, as shops will have to take back used electricals for recycling. This is of course all well and good, as are all the dozens of green / health / safety initiatives from speed limits, to paying for plastic bags. The problem is that no one has ever directly voted on all of this. A democracy relies on Government representing the people, not ruling them. For instance, if everyone voted that children are allowed to smoke, then so be it. Same with Brexit of course, but in the case of this issue, it was decided by the Government that the people were wrong and have fudged the issue ever since. Therefore, later this year we are choosing not an elected representative, but a leader. There have only been two solid Labour Prime Ministers in recent history, Harold Wilson (despite the 1967 Sterling Crisis), and the first “Conservative” Labour leader Tony Blair. Sir Keir Starmer is part of the long line of unelectable Labour leaders, like Kinnock, Foot, Corbyn and Milliband. The General Election is still for the Conservatives to lose, despite apparently being lost already. The key is that moment when voters are actually at the ballot box, deciding between Sunak and Starmer. Perhaps the Tories will take inspiration from Trump, who despite the MSM horror at the prospect, appears to be set for the White House, and to carry out the will of the people.
Premier African
The stock of the moment, where people are watching closely to see what happens next: production, is Premier African Minerals (PREM). The last time we had a get the popcorn moment out was in September with Helium One (HE1). That did not quite go to plan. But in the case of PREM we really are at a serious big reveal, if for no other reason that there have always been siren voices suggesting that this moment would never happen. The fact that CEO George Roach has managed to get to this point at his age (just a number of course, like a share price) is something to be highly commended. Contrary to popular belief, small caps are far harder to run than blue chip companies, something which makes it rather irksome that the CEOs of many FTSE 100 companies receive knighthoods, merely for just minding the shop. In the case of small cap resources companies, the odds are by definition stacked against management and shareholders. Hopefully, PREM shares being Friday’s top stock riser is an indication that Roach is set to deliver.
Hydrogen Utopia
I covered Hydrogen Utopia (HUI) last weekend on the basis that the market appeared to be behind the curve in terms of the imminent medicinal cannabis production, and the tsunami of implied sales / revenues that will logically follow. You do not have to be Bob Marley to appreciate the company’s strategy to be fully funded to execute its waste plastic to hydrogen plant roll out strategy via cannabis. It would appear that with the near 50% share price rise this week, Sun Is Shining on HUI, with the shares back above their 7.5p IPO, but still well below last year’s 17p peak. This should now be the near term target for the shares as we head into spring.
Hornby
I first started working in the financial markets – at least as an intern, in the wake of the 1987 stock market crash. I would take those days with gusto as compared to the over-regulated, illiquid horror story that we have at the moment. Therefore, this week left one with a sense of nostalgia, in the wake of announced stakebuilding at model railway maker Hornby (HRN) by Frasers Group. Both companies can be regarded as proper 20TH century names, and the news this week underlined the way that in the good old days we were treated to regular M&A. At least, as soon as the first RNS regarding stakebuilding came off the wires, having that 1980s experience I knew that something was up. Given that shares of HRN were trading as high as 70p as recently as 2020, it could / should be the case that there is further upside, especially if Frasers is committed to going all the way on the M&A front.
Emyprean Energy
If we are truly in a nascent bull market, as tentatively suggested last year, we should find small cap stocks that have been chronic performers to come back to life. For this to happen we need the return of liquidity, but we also need companies to deliver the correct newsflow. In the case of Empyrean Energy (EME), shares this week were up a third as the company announced the approval of gas pricing and allocation by the Minister for Energy and Natural Resources. This clears the path for definitive binding gas sales agreement (GSA) to be completed. With this support from the Indonesian Government, the GSA is now closer. Having the major terms settled and ministerial approval are very important milestones for EME. Best of all this significantly reduces uncertainty for any potential JV partner or buyer. Indeed, Mako gas is expected to play a significant role in lifting Indonesia’s gas production. It is in turn set to be transformational for EME, and given that the shares were more than double where they are now at 0.62p this time last year, before the big thumbs up from the Minister, we should see the shares re-rate much further.
ECR Minerals
A stock market rule which works well is to note down shares that rise on no new news over the past week, which in some ways is more powerful than those who have published a more recent RNS. The latest from ECR Minerals (ECR), was the Chair stepping down on February 15. Nevertheless, this week the shares were up nearly 30% this week. The market is clearly appreciating this month’s gold drilling news, and the way that the new powers that be, including market commentator, now COO Mick Whitlow, are getting on with the job and running a tight ship.
Clean Power Hydrogen
Although I like to think that I have an almost encyclopaedic knowledge of small caps, now and again there are companies that fall under the radar. In the case of Clean Power Hydrogen (CPH2) though, it may be that I am finally touching upon the stock at a decent inflection point. The shares have fallen from 30p in May to a low near 8p. However, all of this may change in the wake of the latest news at the green hydrogen technology and manufacturing group. The company announced it has developed an IP-protected Membrane-Free Electrolyser, and successfully completed its functional test of the Programme Logic Control of the MFE110 for Northern Ireland Water. The fact that this sounds like rocket science arguably does not do the company any favours, but it is clear that as the company has said, the successful test of the Programme Logic Control allowing for fully automated operation, signifies an important part of the MFE110’s journey to commercial production of hydrogen and medical grade oxygen.
Powerhouse Energy
Another company where the world milestone is apparently appropriate is Powerhouse Energy (PHE). Here the shares rebounded sharply off recent lows as the company showed it has pivoted into a new direction. It announced the signing of an initial 5-year framework agreement with Australian based, National Hydrogen Ltd. The key here, as the company said, is that the collaboration will be based on a license fee and royalties model. “This arrangement establishes a long-term relationship between Powerhouse and National H2, while also potentially providing a long-term income stream for the Group.”
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