May is the month of the Bank Holidays, so it may be somewhat disconcerting for some in the stock market, with three Mondays missing. In fact, it rather reminds us that given trading volumes and the overall level of interest, the stock market could open at 9am and close at 12.30pm, with little effective difference apart from providing a rather more comfortable life for participants.
That said, this week witnesses a flurry of CEO interviews, I believe I interview more than anyone else. Unlike my peers in this area, I normally know each company, and have followed their story for years. I think this makes a difference. What was interesting this week is that despite all the gloom and doom that continues in the partisan mainstream media, which obviously wishes to remove the Conservative Government, the companies I spoke to are doing well / very well. In a couple of cases, one might admit they hope to do very well.
The company which lifted the spirits the most perhaps was Warpaint (W7L). Here I spoke to Sam Bazini, the CEO. Here there were a couple of key takeaways: first the company recorded record sales, and second the company hopes to meet its upgraded guidance. All of this has been delivered by someone who left school at 16, something which I now wish I had. The whole story merited my comment in the RNS Hotlist: “When the going gets tough, the tough buy makeup.”
While it may be said that Warpaint has more than proved its fundamental argument, we are waiting on URA Holdings (URAH) to achieve the same level of recognition. I spoke to the company in the wake of its final results. Here we still have the proposition we have known for some time. The company is sitting on one of the largest emerald mines in the world, it has a JORC resource worth some $260m, and a current market cap of £2m. Go figure, is the phrase that comes to mind, especially with a likely capex of less than £1m.
One of the more difficult challenges that many small caps have is getting their name on the map. Last week I mentioned Graft Polymer (GPL), purely on the basis that the company is one that I know few have heard of. Coincidentally, this week the polymer modification company announced its final results. There are a couple of point to note here. First is that most investors are not fully au fait with what a polymer is. However, ones that look on Wikipedia will note that Graft Polymer is in business which is fully scaleable, and in demand from many sectors, including the cosmetics industry as mentioned with W7L above. On this basis, a share price at least back in double figures seems fair in the near term.
An interview with a company which occurred after several years was with Zenith Energy (ZEN). Here in speaking with CEO Andrea Cattaneo, there was quite a contrast with 2023, and the days well before the pandemic when we last spoke. It is clear that the company has found a niche in project development, is well diversified geographically and in the nature of these projects,and is clearly in demand given the energy crisis and need for energy security.
Away from the UK stock market, for the past month or so I have added the USA Chartbreakers to the Bulletin Board Heroes, covering the small caps over here. I usually record the USA Chartbreakers pre US open, as I did on Friday. I was therefore pleased to see shares of the latest meme stock, Top Financial (TOP) up more than 10x from the previous day’s close of around $20. In fact, similar things happened during the pandemic with companies such as Gamestop (GME), but it is still an event when a share price goes up far more than expected.
Finally, sticking with a USA angle, it was noteworthy earlier this month when Elon Musk threw stones at the BBC, our state controlled, and taxpayer funded, broadcaster. We are reminded of this with the departure of the BBC Chairman this week. One hopes that the BBC goes the way of the CBI, two organisations that should never have made it into the 21st century in their present form.
Disclaimer & Declaration of Interest:
The information, investment views, and recommendations in this Zaks Traders Cafe interview are provided for general information purposes only. Nothing in this interview should be construed as a promotion or solicitation to buy or sell any financial product relating to any companies under discussion or referred to or to engage in or refrain from doing so or engage in any other transaction. Any opinions or comments are made to the best of the knowledge and belief of the commentator but no responsibility is accepted for actions based on such opinions or comments. The commentators may or may not hold investments in the companies under discussion.