The Christmas season used to have a couple of great standout events, apart from the Queen’s Speech and the New Year’s Honours List. The other two were Top of the Pops, and for more devoted music aficionados, the Festive Fifty courtesy of John Peel.
Part one covering in reverse order the count down from number twenty @ZaksTradersCafe
The Stocks of the Year 2020 is clearly less salubrious than the above, especially when related to some companies on the AIM market but can nevertheless be quite entertaining in its own right. Perhaps more importantly, one can use hindsight to provide insight into what stocks maybe tomorrow’s winners. Indeed, after 2020’s Top 20, I will be looking at the top 20 contenders for 2021. For that, I am happy to open the field to anyone who wishes to get in touch and distil the best ideas. I am also happy to stand corrected on the list below. Also, those companies not in this year’s top 20 can still make the grade in the top 20 for 2021 which is due for completion around the last week of the year.
Top 20 of 2020 Criteria:
- Share price performance: Clearly it would be tempting to just list the top risers of the year. This is clearly going to weigh heavily in the list. But just as Mr Market does not always get it right, share price alone is only going to be one factor in the top 20 list.
- The Company: This is a rather broad brush including the aptitude and presentation of the management, PR, IR, the business model, and of course cash generation.
- Market Perception: while this may sound a little like an overlap on PR/IR, it is intended to cover that magic ingredient which can cause some companies with just a dream to multi-bag, and others who are going great guns to be side-lined. Related to this are the companies who are attacked by shorters with no just cause, or successfully ramped while running on fumes. Finally, there is the luck factor. Bad luck is in hospitality in 2020, good luck being renewable. Of course, there is the cliché that the harder you work, the luckier you get.
The Top 20: 2020
20) Powerhouse Energy (PHE): Plastic Fantastic
I start off with Powerhouse Energy, the waste plastic to hydrogen group. It helps that the company underlines the criteria for the Top 20 list in a comprehensive fashion. The stock started rising sharply at the start of the year from below 0.5p, peaking towards 3.5p. Helping the momentum where the arrival of “sugar daddy” Peel Environmental, the acquisition of Waste2tricity, and a £5m fundraise, all of which rather placed a pie in the face of the bears. But for those bears not assuaged by these points, the arrival of COVID-19 and the Green Revolution, have meant that there has been strong demand for any stock market real estate offering renewable/sustainable characteristics. Of course, ITM Power (ITM) and Ceres (CWR) could also have made the top 20, but did not purely because they were largely left untouched by the bears, and therefore far less entertaining.
19) Verditek (VDTK): Hotter Than The Sun
It is no coincidence that solar panel specialist Verditek has been placed alongside Powerhouse Energy (PHE). In both cases, these companies had a mauling from the bears, and in both cases, the Green ascendancy meant that they could raise cash and get on with business. Verditek raised £3.5m at the end of October, more than enough to drive its business model, and with a very capable new CEO Rob Richards, providing the opportunity to get on with the job. The positive twist to what Verditek could achieve was illustrated at the end of September with the company’s first commercial order in the Australian mining sector – a buzzing area. The military applications of Verditek’s offering should not be forgotten or the technology where its panels are ten times lighter than conventional panels.
18) [email protected] Capital (SYME): The 1100% Surge
It is tempting to suggest that any company which manages an 1100% share price rise in the space of a month – August – must have something special going for it. Perhaps not surprisingly, even after this rise, and maybe just because of it, the company became a magnet for the bears and the darling of small-cap punters. It can be said that in terms of the inventory monetisation company attracting the limelight, there have been several factors at play, the main one perhaps that few actually understand what inventory monetisation actually is. Add in the highly upbeat Italian charms of CEO Alessandro Zamboni, with his potential $3.75tln market, and it is not difficult to resist being pulled into the vortex of the fintech platform. Much will depend on Zamboni’s ability to execute his strategy and drive revenue before the [email protected] Mania fades. So far, the momentum of the summer continues, and private investors remain on side.
17) Remote Monitored Systems (RMS): Behind The Mask
Given all the hoo-ha surrounding the company best known for anti-viral face masks of its subsidiary Pharm2Farm, it is perhaps surprising that shares of RMS are well up on the stock market leaderboard for 2020, the ongoing pandemic notwithstanding. This is especially the case given the rather high-profile share sales which the stock has had to absorb. However, it would appear that investors prefer to focus on wunderkind Dr Gareth Cave, founder of Pharm2Farm and the developer of the nanotechnology. With the face masks rollout due early in the New Year, and production set to ramp up, it may be that RMS becomes a rather more straightforward stock market play based on manufacturing and sales than the shenanigans fest we have seen in the last few months of 2020. With forecasts that masks will need to be worn for the foreseeable future, the question is whether the unique properties of Pharm2Farm’s face mask can corner the market in such an environment?
16) Zoetic (ZOE): Rising To Higher Ground
It feels like we have been promised the CBD / marijuana play in the UK for years, but somehow the right combination of company, management, product, regulation or distribution never came along. This state of affairs meant that even when Zoetic shares started to take off in the summer, on the basis that they were the real thing, it was difficult to believe that the vertically integrated CBD group was the real deal, with the risk being it was merely a flash in the pan. However, subsequent months have more than proved otherwise, especially in the wake of the company’s “landmark” distribution agreement in the US, which really proved to be a landmark. When you add in the spark of a rumoured distressed short in the market from the 30p’s to add some extra spice to the situation and the Chill brand company appears very well placed in the wake of some 88,000 stores Stateside, which will clearly be a backbone for sales going forward.
15) Jubilee Metals (JLP): Processing Power
It would appear that 2020 was the year that metal processors in general, and Jubilee Metals, in particular, were able to shake off the myth that they are not scalable businesses. Of course, a massive rally in both precious and industrial metals helped the cause, especially once it became clear that COVID-19 would not be a material factor on operations. This point was underlined by the November release of the company’s audited results for the year to the end of June. The financial highlights here included adjusted group EBITDA up by 132 % to £ 22.6m and earnings growth of 162 % to £ 18.3m. EPS was up nearly 100%. Perhaps though, the best aspect of this performance is that it did not include the rest of 2020, thus giving followers of CEO Leon Coetzer’s money-making machine plenty to look forward to in the next update. This is especially the case given the way he has been buying up the rights to copper, chrome and cobalt tailings, left, right and centre.
Join us when we publish part 2, as the countdown continues towards the top five.
(The opinions expressed here are those of the author, a columnist for Share Talk.)
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