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.
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 comprehensive fashion. The stock started rising sharply at the start of the year from below 0.5p, peaking towards 3.5p. Helping the momentum were the arrival of “sugar daddy” Peel Environmental, the acquisition of Waste2tricity, and a £5m fund raise, 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) Supply@Me 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 Supply@Me 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 nano technology. 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.
14) Alien Metals (UFO): On Another Planet
It can very often be said that interviews are the window on a company, and if the right chord is struck can be transformational. This came through via CEO and Technical Director Bill Brodie Good, as his message that Alien Metals will be an aggressive mining sector portfolio builder not only came through as 2020 progressed, but was seen to be a strategy which was taking off as quickly as the share price. As the year came to a close the company with one of the wittiest ticker codes around said it was continuing to develop its projects in Mexico and Western Australia and continues to develop its exciting portfolio in the iron ore, silver and copper commodities. It was clear that under Brodie Good’s stewardship the Alien is both nimble enough and with sufficient bandwidth to grab fresh opportunities when they arise.
13) Galileo Resources (GLR): Positive Trajectory
One of the Colin Bird stable of companies who have benefited from the improvement in sentiment and prices in the mining sector, 2020 was the year when all the hard work and persistence started to pay off. Highlights apart from a 5 bagger move from the March lows included the acquisition of Crocus’s copper exploration assets in Botswana in May, the commencement of exploration programs on its Kalahari Copper Belt licences in August, and buying of 100% of Africibum and its interests in the North East Kalahari Copper Belt project in Botswana. Of course, all of this happened in the run up to copper arguably being one of the hottest metals around as the EV and clean tech emerged as the buzzwords of the year. Away from copper, Galileo said in November that it had signed a marketing agreement with Zopco in relation to the potential sale of zinc willemite ore from the group’s 95% owned Star Zinc project in Zambia.
12) Power Metal Resources (POW): PR Hyperdrive
Although it may seem that metals explorer and development group Power Metal produces more PR and IR than both Rio Tinto and BHP Billiton combined, it seems to be the case that such an impression is erroneous. Nevertheless, CEO Paul Johnson is certainly in the “force of nature” category in terms of building the momentum behind the Power Metal. This is not least in terms of his recent stakebuilding up to the 7% level. Among the many highlights from the company in the recent past was a Drilling Progress Update from the Botswana Molopo Farms Complex which is targeting prospective “massive” nickel sulphide and platinum-group metal mineralisation. To end the year Power Metal started its exploration battle at the Alamo Gold Project in in Arizona where geological mapping has identified conglomerate units which are prospective for hosting coarse gold.
11) Pensana Rare Earths (PRE): Fortune Favours A Brave IPO
Of course, at the end of 2020 we now know that rare earths are the new rock and roll – or at least one of them, in the stock market, something which Rainbow Rare Earths (RBW) and others have underlined this autumn. But back in July being the first UK IPO post COVID-19 might have had some in the brace position regarding what the stock market reaction might be. However, having already been listed on the ASX clearly provided stability to the cause, and the stock has soared from an equivalent £33m versus the Australian listed market price to near £150m now. When you add in the way that Chairman Paul Atherley appears to have transformed himself in Clark Kent fashion since taking up the post, and that we are in the run up to Saltend Chemicals Park in Humber as the proposed site to build the U.K.’s first rare earth processing facility, there is plenty to look forward to. Not least Pensana being the world’s first fully sustainable magnet metal supply chain, from mining to production, or as they say these days, “vertically integrated.”
10) EQTEC (EQT): Ready For Deployment
The Green Revolution dream clearly gave momentum to proprietary advanced gasification technology group EQTEC. But the reason for the relatively high placed inclusion in the top 20 of 2020 was the “rug pull” provided to the bulls by Aries Clean Energy’s US patent infringement claims. For some reason stock market cynics complained regarding the close proximity of the £10m placing earlier in July and the legal run in. However, all of this proved to be a buying opportunity in the stock from below the 0.5p level, something which would have been rewarded by the stock doubling by the end of the year. What was noticeable is that the Fintwit crowd were almost unanimously backing the buy the dip idea, hence also backing the idea of the inclusion of EQTEC at number 10 in the hit parade. In terms of newsflow the recent highlight has been EQTEC awarding an independent technology and market review to Wood Group and a non-binding heads of terms with Wood and Deltasource to help ensure the effective deployment of EQTEC technology into the global energy-to-waste sector.
9) Novacyt (NCYT): Testing Times
Although there is usually a bunfight on Fintwit amongst influencers as to who spotted the big winners first, in the case of Novacyt, conspiracy theorists will be interested to know that the technical turnaround actually started in mid November 2019. This was obviously well before “official” cases of COVID-19 began – although, it has to be said the clue does appear to be in the name of the virus. For the PCR testing kit group it has clearly been a phenomenal year in all respects. While those living in Tiers 2 and 3 may wish that people stopped getting tested so much, vaccines or not, testing is here to stay if only for the authorities to prove that lockdowns were and are necessary despite destroying large swathes of the economy. Novacyt has pipped the other “COVID-19” plays to this top ten spot on the basis that it has held the bulk of its share price gains, as well as being the company which seemed to have first mover advantage in this particularly horrific Gold Rush. The prize is clearly that Novacyt would become / remain the winner in the diagnostic sweepstake. This is especially so given how crowded the space is for would be customers, including Governments and health organisations.
8) Greatland Gold (GGP): The Strong, Silent Type
While Eurasia Mining got to the £1bn market cap level with controversy in the City and outside, Greatland Gold shares have risen from around 1p at the start of the year, to 30p with understated ease. Part of this has been due to the steady pair of hands as represented by CEO Gervaise Heddle. Indeed, it can be said that his previous experience at private investor favourites Thor Mining and MetalNRG seems to have paid dividends. As far as the actual Greatland story has been concerned, the year is ending on a high with Heddle stating that the initial inferred mineral resource estimate for Havieron is a really important milestone. This is hardly surprising given the way that the result of the joint venture to date between Newcrest and Greatland has revealed 3.4m ounces of gold and 160,000 tonnes of copper. Indeed, Greatland has been both the mother lode and the flagship for the myriad Australian miners that flourished in its wake in 2020.
7) ECR Minerals (ECR): Diamond Drill Rig Forever
Given that it has certainly been the year of the Australian gold miner, a sector which has been said to have “saved” the economy there, it is not surprising that ECR has been a private investor favourite. Indeed, in September CEO Craig Brown commented on continuing interest in ECR’s Bailieston and Creswick projects with regards to potential joint venture or earn in opportunities. He added that the engagement was not surprising given the interest in Victoria gold opportunities, as evidenced by the many corporate transactions in the area. Since then events have centred on the company’s diamond drill rig and how drilling will commence at the Bailieston project which is located close to the Fosterville Gold mine which is currently producing 500,000oz a year. Indeed, shares of ECR have finished on a high for understandable reasons.
6) Dev Clever (DEV): Education, Education, Education
It should have been the case that anyone who had to go through the misery (or felt it was misery) of home schooling in 2020 would not only fully understood the merits of Edtech play Dev Clever, but also happily become a shareholder in the career guidance and development platform. In fact, for those who did back Dev Clever shares it was a phenomenal year given that the stock was trading at just a penny in January versus around 9p near the end of the year. With plenty of shares to be bought via a subscription at 10p over the near term, and Intrinsic Capital entitled to subscribe to up to 50m shares at 25p, there may be much more ahead to look at with Dev Clever than its current partnership with Veative and its recently announced B2C initiative in India. We were reminded of the group’s potential with the $1.2m impact assessment deal, and of course with the tapping of ex-Lenovo Business Development Manager Richard Lee as Global Sales Director of the Educate Division. In April Dev Clever signed a three-year partnership for Dev’s Launchyourcareer.com and VICTAR VR, which are now part of Lenovo’s offering for the online education sector. With the pandemic continuing to shine a light on online education, and being tied in with major players such as Lenovo and Veative, Dev Clever’s scalable, international offering has been a 2020 highlight.
5) Chesterfield (CHF): Blue Chip Stakebuilder
In some ways Chesterfield Resources provided a lesson to all looking at looking at mining minnows, and in particular what might help turn a minnow into a major play. Indeed, the Cyprus focused copper and gold explorer was ticking along nicely for the bulk of 2020, with the shares rebounded well with the sector from the March lows seen elsewhere. However, the company surprised even the more seasoned stock market watchers as Polymetal International (POLY), the FTSE 100 precious metals mining group, invested £2,100,000 in Chesterfield to take a 22.5% strategic stake in the company. Perhaps Eurasia Mining watchers will note how this event at the end of November was rather snappier than the process going on at their company. Of course, Chesterfield used this news regarding its new “sugar daddy” to raise £2.5m. But it should be the case that the company can dine out on the blue chip validation for quite some time to come.
4) Wishbone Gold (WSBN): Living Up To Its Name
Not that we are deep in the top 10 stocks of the year – however esoteric the selection may be, a company only makes the grade if something or someone special is involved. In the case of Wishbone Gold it may be said that Wishbone Gold is something which has turned into something special courtesy of Chairman Richard Poulden. This came in the form of a June restructuring leaving the company with no significant liabilities and cash in the bank, while the impact of COVID-19 on the physical gold market at the time made it logical for Wishbone to exploit its gold and copper prospects within the mineral exploration tenements at White Mountain and Wishbone II in Queensland, Australia. Since then the company has applied for a new exploration licence to the South and West of the Company’s existing Wishbone licences and had a successful £1.75m placing to push forward with exploration on the new Red Setter Project in the Patersons Ranges near Telfer in Western Australia.
3) Gunsynd (GUN): A Galloping Pace
Perhaps what has been the most remarkable aspect of the rise and rise of mining investor Gunsynd, and what has placed it in the top three of this particular collection, is the way that the company managed to emerge from being an obscure shell to the favourite of both punter and professional investor alike. Given the small initial market cap and by implication relatively small funds to play with, we were treated to an exemplary run of investments by the company, culminating in the run up to the Rincon IPO at the end of December. While there is no question that there has been a boom in the Australian mining space, Gunsynd has proven it is not a one trick or one geography pony, something which sets the company up for even greater achievements going into 2021. Underlining the merits of team, Messrs Harris, Strang and Ruse, has been the latest addition of serial entrepreneur Chris Akers to the shareholder register.
2) Eurasia (EUA): £1bn Bear Burner
2020 was a year in which shares of the “last non consolidated palladium play” remained non consolidated, but managed to 10 bag during the year to reach a market capitalisation of more than £1bn. Perhaps just as remarkably, this change of fortune did not seem to change the minds of bears of Eurasia regarding the merits or otherwise of the company. While bears are notorious for never admitting defeat, being £1bn out on any call normally focuses minds. Indeed, not even the arrival of UBS to advice on a sale of the company (it has a significantly largely compliance capacity than the FCA) or a massive rally for precious metals and the mining sector seems to have changed the minds of the cynics. Set against this one must congratulate the management of Eurasia for getting on with the day job, and hence enabling those investors who where not scared out of their profits to cash in on one of the best bull runs of 2020. It could be argued that the rally in the stock has been of such magnitude that whatever strategic options are eventually chosen shareholders are likely to be left smiling.
1) Open Orphan (ORPH): A Growing Family
Shares of sprawling pharma services group Open Orphan were trading just shy of 5p at the beginning of 2020, and the deal to buy Hvivo was just completing. Having played a blinder in 2019 with the RTO into Venn Life Sciences, Open Orphan’s CEO Cathal Friel proved that just ahead of the COVID-19 striking, that most elusive of commodities – timing was also his. With Friel’s energy in evidence to a force of nature degree, as well as an enthusiasm to communicate, 2020 has seen an ongoing re-rate for Open Orphan shares. The engine for this has been the backing of sticky institutional investors, as well as an acceleration in the frequency and magnitude of contract wins. Perhaps as important as any other factor going into 2021 in the pharma space, the company now has the critical mass and diversity to flourish in the months ahead however the environment changes. Of particular interest in value terms to biotech fans going forward will be Open Orphan’s 49% stake in Imutex, which includes FLU-v, a phase III ready universal flu vaccine, and a phase I ready universal mosquito saliva vaccine.
(The opinions expressed here are those of the author, a columnist for Share Talk.)
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