I hope all are well.
Another week on the markets, it’s approached that time of year – sell in May and come back St. Ledger’s day. It seems the markets, particularly at the micro end, are quite muted at the moment. News flow has been reasonably slow and few baggers can be found. Having said that, the FTSE has been building in strength despite recently being knocked of its perch by the surprise snap election. I’m not surprised to see the FTSE up this morning – 7,100 is a nice support level for the index, which is where it closed on Friday.
A reminder that I filled out the Penny Stock Portfolio with a bunch of stocks last week, so head over there to check them out! It’s only been a week, so most haven’t moved significantly either way. However, three stocks from the portfolio performed strongly last week. Motif Bio is up 44.5%, SDX Energy is up 39.9% and Thalassa Holdings has gained 19.8% – not bad given last week was only a 4 day week! These are stocks I believe have long term potential, so I’ll be holding on to them, rather than selling in and out. Naturally, they will have a bit of a correction, but I believe that the long-term trajectory for these stocks is up. Motif Bio, I think will head toward 50p before encountering some resistance. Longer term, the trend looks favourable for the drug company. One thing to watch for is the raising of funds to finalise Phase III testing. The placing for stage one of Phase III, amid the delayed, fumbled NASDAQ listing, hurt the share price. However, management will be raising cash from a much stronger position this time around, so I don’t expect this placing to derail share price momentum significantly.
One stock from the portfolio that has performed less well is Anglo Asian Mining, which is down 21.1%. However, the fundamentals remain good. The company announced a strategic update on Tuesday. It seems the market weren’t overjoyed with it. However, I didn’t think it was too bad. Anyway, the stock dipped as low as 15p this morning – a key support level – and has since recovered to 16.25p at the time of writing.
I’ve got a meeting later this morning, so only a quick post this morning – I hope to get a couple more out this week.
Market Cap: £32.57m
Ascent Resources reported its audited full year results for the year ended 31 December 2016. I don’t normally cover results from AIM resource stocks, but given the year that Ascent has had I thought it might be worthwhile.
Obviously, it’s been a truly transformational year for Ascent. The AIM stock struck a gas sales agreement signed with INA. By virtue of the acquisition of Croatian company, Trameta, it gave Ascent the ability to access the export production pipeline to Croatia and sell gas at the border to INA. This was significant due to the myriad of legislative hurdles the AIM company were struggling with. Investors faced long wait for legal process to play out. The INA agreement gave Ascent alternative way out, which they sealed with the sale of first gas from the PG-10 pipeline this month.
What’s next for the Ascent Resources?
Ascent are entitled to “ retain up to 90% of the income received against historic costs”. To date, the AIM resource company has spent €43 million, so management are expecting a build-up of cash reserves. This is on top of the recent £3.0m raised via equity placing through PrimaryBid.com in February 2017.
The AIM company will now revisit the legislative barriers surrounding a environmental permit, which prevented the construction of a larger gas treatment facility in Slovenia. This will provide the Ascent Resources with further capacity if successful. Ascent make clear that the delays it has suffered have been “solely on the permit application process”, rather environmental concerns or issues raised by special interest groups.
If there are companies that you want me to cover in the coming days or have significant news due imminently then let me know. My aim is to deliver value to readers, so I want to ensure I’m doing this as much as I can.