A week is supposed to be a long time in politics. What we were reminded of this week is that with regard to the monarchy, such a timeframe can feel much longer. Thursday became a rather surreal day, mixed in with an emotion consisting of both inevitability and disbelief.
As far as the stock market is concerned, the week beginning September 5th was supposed to be the start of as much as three months of solid activity, in a year to date which has seen precious little. The new pattern of WFH, school holidays/half term, as well as the Jubilee, the war in Ukraine, heatwaves and droughts, means that one has to be quite determined to find a window when business can actually be done. Now in the run-up to a State Funeral and Bank Holiday on September 19, it would appear that this September is going to be a part-time affair.
Egdon / Union Jack / Reabold /Igas
Nevertheless, investors have at least maintained their love of small-cap oil and gas over the past week, with Egdon (EDR), Union Jack (UJO) and Reabold (RBD) leading the way. Igas (IGAS) peaked at 110p, a reminder that one of the positives of London being such a reticent market, as compared to say the United States, is that even if you are late to the party in a situation, there can still be plenty of upside. It has of course helped that the newspapers are suggesting that fracking plays could outshine production from the North Sea. This may be ironic given the way that the green lobby and the Nimby’s ensured that energy policy going into 2022 was absolutely on the wrong track.
This of course, is in contrast to the normal scenario in small caps where the upside on good news consists of a one day wonder, or three fine days and the equivalent of a rather painful thunderstorm. In the case of Advance Energy (ADV), it was barely the one day wonder variety of rally, as a non-binding heads of terms agreement delivered a 111%, before the killjoy suspension. As stated previously, it would appear that the powers that be are oh so keen to suspend shares that are making money for shareholders. Although I suppose in the case of most Advance Energy shareholders it is a case of making some of the money back.
CleanTech / Atlantic
A positive situation that so far has not been suspended is Cleantech Lithium (CTL). Shares here had already begun their stellar ascent before the announcement of a MoU Signed with SunResin on August 24. It may be jumping the gun, but Atlantic Lithium (ALL), which has previously announced indicative ASX listing date of 26 September 2022, looks set to follow CTL’s share price run.
Now that investors seem to have got the message regarding Lithium being a hot commodity, it may be worth trying to work out what the next EV hero will be. This week saw Tirupati Graphite (TGR) announce a significant expansion to its footprint in Madagascar. Given this, and all the work the company has done since coming to market in December 2020, it appears a tad unfair that the shares are still at the IPO price.
Also slightly unfair perhaps is the 10p share price of Wishbone Gold (WSBN). This came after a busy week for the Australia focused explorer. It raised £2.37m to fund expansion at Red Setter and Halo. However, it is likely that once the market ends its sulk, which applies to almost any company currently fundraising, the merits of WSBN’s activities on the ground will start to kick in.
Finally, having been writing about small cap stocks day in, day out, since joining Shares Magazine in 2000, it is my habit to look on the bright side in this area. Growth companies are a notoriously tough area, where the odds are normally stacked against investors, rather than in their favour.
However, with the right research, and attitude, there are rewards to be had. The right attitude in my view means not throwing stones at companies, not insulting management, and not adopting a holier than though approach. A good percentage of the big winners so far this year in small caps are ones where formerly either the management or the company’s merit have been questioned, and now they are multi-baggers. A noticeably example this week has been ValiRx (VAL), where a 70% share price has been delivered after a recent deeply discounted placing.
While negative comments are admittedly great clickbait, I do not think the shock jock approach is appropriate to the stock market, where very often we are talking about the hard earned cash of working people. The collapse of Cineworld (CINE), or whatever the latest company to stumble is not a cause to celebrate openly, even if you are short. On this note it is to be hoped that recent declines in the likes of Caerus (CMRS), Rambler (RMM) and SEED Innovations (SEED) can be turned around swiftly.
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