There was a slight problem for those looking to pick the winners for 2022, this time last year. At that point, hardly any of the black swans that we are now all too familiar with, war, inflation, rising interest rates, and ultra-high taxation, were on the horizon.
Indeed, even if some guessed what was to come, they would only have been the people who always look for doom and disaster, and therefore were not looking for winners, but losers. Queering the pitch yet further, there has been a divergence between the blue chips and the small caps. Indeed, living up to the blue-chip moniker, companies like BAE Systems (BA.), BP (BP.), Shell (RDSB) and Glencore (GLEN) all flew by more than 40%, taking advantage of being exposed to defence, oil & gas and resources in general, being sought after for obvious reasons. It seemed that the smart money was all too happy to play it safe, rather than go for “growth” stocks, which traditionally have risk and liquidity issues to overcome to get them over the line.
Boom to Bear
Another point that was illustrated in 2022 was the way that the greatest pain in the stock market is when we go from boom/bull conditions to an illiquid bear market. This not only means that the laggards are hit but also most galling, good companies are sold off on a “baby with the bath water” basis. Investors scrambling for cash will quite understandably sell out of the stocks where they are least underwater, and which are the easiest to exit first. This means that a characteristic of 2022 has been stocks like Hvivo (HVO) being down on the year, even though the challenge trials group has announced contract win after contract win over the year.
After The Cull
So how do we navigate the 12 months ahead? The good news is that there has already been a severe culling of the small-cap area. In many cases, such as Hvivo, the cull can be argued to be overdone. What we also know historically, is that when a bear market starts it is much swifter than the start of a bull market, and much more indiscriminate. However, as bear phases continue, and the dinosaurs have been eliminates, the new breed of companies that emerge can very often be regarded as being “safer” from future sell offs than they would be in a bull market. This is not only because they are vulnerable to short squeezes, but because they do not carry the overhang baggage of those investors in at the higher levels, who are always looking to sell into strength.
Rabbits Out Of Hats
For instance, Bens Creek (BEN) may be the right company in the right place, metallurgical coal, but having pulled the rug from under people long near 100p, it will have to pull several rabbits out of the hat to move from 20p back to 100p. In contrast, Harland & Woolf (HARL) had already spent the best part of three years tiring out its longs before the FSS contract news hit the newswires last month. It would seem easier for it to go from 20p to 100p, than for the same to happen at Bens – even if the latter was on fire.
Management
So the recent trajectory of a stock – especially in the past 12 months is a factor when deciding whether it could be a winner or not. This is backed by the way that companies who have managed to keep their heads above water during one of the worst periods in the past 50 years, should continue to perform. The main proviso is that there is a business there, production ongoing, or imminent, and one of the key drivers, the management know what they are doing. In many ways, the biggest casualties of 2022 have been those where the management was good for the easy money times before inflation hit, but then found itself out of its depth when the hard days dawned. Of course, there is an element of luck, Bitcoin’s fall was never going to help crypto miner Argo Blockchain (ARB), and problems in the High Street hurt Made.com, but these and other casualties of 2022 underlined the importance of preparation. This has been illustrated by the plethora of small caps going cap in hand for fundraises so close to Christmas, when they had every opportunity to do so earlier in the autumn – if they had been monitoring their bank account properly.
So the key factors for the top 20 for 2023 are:
- Relative performance against the stock market fall of 2022.
- Management strength.
- Being on the zeitgeist of the key economic factors such as inflation, interest rates, high tax.
- Having the pricing power and ability to withstand the factors described in 3.
- The absence of negative sentiment towards the company, with neutral sentiment actually being a positive in many cases.
20) OKYO Pharma (OKYO): 2.75p Target 7p
Given how grim 2022 was, it would not be wrong to simply regurgitate favourites from this time last year, and take the view that the only way in most cases from now would be up. However, the other problem with the bear market in small caps is that timelines have been stretched, as well as valuations kept a lid on until companies are much further down the line as far as their milestones. A good example of both delayed market response and depressed share price is dry eye treatment group OKYO. Of course, it may be the case that even after the latest announcement of clearance of its Investigational New Drug (IND) application from the FDA to initiate a Phase 2 human clinical study. What the market has perhaps still not cottoned onto are a few factors here with OKYO. The dry eye treatment market is a multi-billion dollar one, with the jump in technology with OK-101 which is a treatment, rather than current applications which mere address the symptoms of dry eyes in a mechanical way. Just as important is that because OK-101 is a topical treatment it will have accelerated FDA approval, a point underlined by this month’s news from the company. Such an accelerated approved clearly means that the costs of development are that much more economic. Finally, given the way that the market cap is back to where it was two years ago, despite the advances made, we should see a realignment in 2023, especially given the drug will be “moving into the clinic in the first quarter of 2023.
19) Polarean (POLX): 49p Target 150p
Another life sciences company Polarean, and another one which has just been given the thumbs up from The Man From Del Monte, aka the FDA. In this case, the green light is one we have been waiting on for the longest time at the medical imaging technology company with its drug-device combination product. The delay / uncertainty provides an explanation, other than stock market conditions as to why POLX shares have been on the back foot. Indeed, it was September’s request from the FDA for additional information that took the wind out of the stock at the time. Given what a rocky ride it has been for Xenoview, and how perhaps some weak hands had given up the ghost, it could very well be that we seen a meaty reaction, even between Christmas and New Year, in favour of Polarean. However, even if there is not an immediate re-rate, the breakthrough for the lung disease focused group must be regarded as transformational. The company is cashed up, $22.7m at the last count, and the relief that the New Drug Application has been successful just before the 30 December deadline is likely to maintain fundamental momentum for quite some time.
18) Baron Oil (BOIL): 0.14p Target 0.3p
Stocks like Baron Oil who have outperformed since the autumn have a special place in the stocks for 2023 top twenty. This is because, by definition, they have managed to weather one of the fiercest storms in recent times. Clearly, given the massive climb in oil over the course of 2022, Baron and its peers were always going to be looked upon favourably. But in current stock market conditions this is never a done deal. It is also usually the case, even in bullish conditions, that many stocks struggle to remain above their latest placing price, and for an extended period. Therefore, it is quite gratifying that even after the £5m raise in November at 0.12p, we are standing at 0.1425p. The timelines for the upside argument centre around Dunrobin in the first half of 2023 in terms of the CPR and potential farm in partner. Chuditch could potentially report ECRE findings and a possible JV partner early next year, with an appraisal well commitment due by June. 2024 should see drilling / spudding coming through for both. Given that Allenby are looking for a 0.775p target here, 0.30p is not only conservative, but also something which should be on offer sooner rather than latter in 2023.
17) Hvivo (HVO): 10p Target 20p
Having peaked as high as 47p early last year, it could be argued that challenge trials group Hvivo, formerly Open Orphan, has been treated rather harshly by the market. True, the peak was at the height of the pandemic, and the company was regarded by many (rather inaccurately) as being a Covid play. True, it was a beneficiary of that period, but what the company now lead by CEO Mo Khan, has shown this year is that it is company for all seasons. It is also, at a time of intense awareness of communicable diseases of all kinds, right in the box seat for its clinical trial and laboratory services. This point has been underlined by a “magnificent seven” of thick seven figure contract wins this year, something which has rather surprisingly not moved the dial as far as its share price. While one would suspect that at some point soon the dam of doubt will be burst, at least the present share price near 10p and a £67m market cap, the implication is that those arriving to the stock now see a situation where the rapid growth should feed into the valuation, and perhaps most importantly of all, sentiment. With the p/e expected to fall below 10 for 2022, and the prospect of yet more contracts, the inflection point for Hvivo shares should not be far off.
16) GreenX Metals (GRX): 33p Target 50p
Part of the “joy” of the small cap space is the search for the winning lottery ticket. While such tickets are certainly not for widows and orphans, or indeed, most of the rest of us, now and again a prospect does catch the eye. The latest situation where 1+1 may equal 11, is GreenX. Here last month we were delivered the possibility of a win at the £84m market cap company of up to as much as £737m against Poland. This is allegedly for lost profit and damages related to Jan Karski and Debiensko projects. While there was no timeframe for this potential windfall to hit the GreenX bank account in November’s RNS, one would assume that the window of the whole of 2023 could be enough to deliver some news significant enough to move the dial. Rather tellingly, in a market wish is quick to erode any share price gains, shares of GreenX have stretched to maintain year highs nearly a month later.
15) Marula (MARU): 3.75p Target 10p
Management is one of the keys to success in the small caps area, although the most important factor, one which is very much related to who is running a company, is the ability to execute. Indeed, to paraphrase the saying regarding real estate, execution, execution, execution, is the decisive factor. With CEO Jason Brewer we have someone who on meeting him comes across as a force of nature, very much hands on, boots on the ground, something which alas is rather rare in the mining space where this is very much required. It also helps that he has a Masters in Mining Engineering with Honors from the Royal School of Mines, Imperial College. Having turning the former All Star Minerals into Marula, we are said in the run up to the stock moving up from AQUIS to the AIM market, something which rather intriguingly has been flagged. Therefore, like the run up we are seeing from fellow AQUIS evacuee, Hydrogen Utopia (HUI), this rather provides an open door for the bulls to charge through, as they seek a potentially larger pool of liquidity. Such a thought may have been in the mind of recent stakebuilder Paul McKillen, as he moved up from 5.82% to 9.38% earlier this month. Of course, the key in mining plays is production. We are also in the run up to the major milestone of delivery of the first shipment of high-grade lithium ore under the $5 million lithium prepayment facility to a subsidiary of commodity giant Traxys SARL. The recent development of the company’s move into graphite in the form of the Bagamoyo Graphite Project in Tanzania, should also be noted as it diversifies itself within the battery metals space.
14) Tirupati (TGR): 33p Target 100p
Speaking of graphite, and production, it should be the case that 2023 is the year when Tirupati crosses over into being a significant world player in the graphite production space. This is important as we attempt to wean ourselves off the China commodities stranglehold, and as the much vaunted EV revolution starts to take place. Indeed, I have been reminded on a number of occasions that lithium-ion batteries should really be referred to as lithium-graphite. This at least underlines the importance of graphite. If the penny dropped on this point with investors to a greater degree than it has already, then one would assume that Tirupati’s share price would be well above its IPO price of 45p from a couple of years ago. In fact, simply on a “water under the bridge basis” we have seen Chairman Shishir Poddar’s company transform itself since 2020, as well as the agenda regarding graphite becoming all the more mature. Recent fundraising by the group also means that 2023 should really be the year when the production kicks in and the revenues soar. Given the way that Tirupati in recent months has kitchen sinked expectations, and bitten the bullet on costs, as well as raising the cash to complete the Suni Resources acquisition. The stage is set for the execution of the 30,000 tonnes a year production target, in the “first half” of 2023.
13) Quetzal (QTZ): 3.4p Target 10p
We are all too familiar with the meltdown that there has been in the tech space, as the market has travelled down the other side of the mountain that it climbed during the pandemic. Indeed, in the sub sector of the crypto space things have been even more harsh, a point underlined by the demise of FTX, in the most ignominious way. However, such crises offer opportunity, and the opportunity that Quetzal has cracked is to be one of the few fully regulated and integrated providers of both fiat and crypto services. Tap customers can access several major crypto exchanges, allowing them to trade 26 crypto assets and store them in Sterling, Euros and/or US$. While some may feel somewhat squeamish in the current crypto environment, there is little doubt that there is demand for digital assets, and that this demand requires as much security in terms of the security of the entity which they have placed their money. While previous to this year it may have seemed that Tap had engaged in regulatory overkill, at the end of 2022, this has been fully validated. At the same time, the demise of other crypto based platforms acts as a perfect cue for business to flow Tap’s way, a process which one would expect to accelerate next year, as the RTO of Quetzal with Tap is complete in early January. The new company will be known as Tap Global Group, after Quetzal paid a consideration of £20.25m. The market cap of Quetzal on suspension this month was just under £6m. It will be interesting to see how the market reacts once the shares return in a few weeks, hopefully towards a £20m zone market cap.
12) Canadian Overseas (COPL): 18p Target 40p
There was little trepidation in terms of including Canadian Overseas in the stocks for 2023 collection, if only because one suspects the company is marmite as far as many investors are concerned. A combination of the wait for it to get to its “promised land” and perhaps the somewhat John Wayne persona of Arthur Millholland, President & CEO. However, it would appear that as we end 2022, the “Stagecoach” is finally heading in the right direction. We have been helped by the latest announcement from the company regarding costless hedge restructuring, and November’s production increase update. Having at long last closed the Cuda acquisition in July, it seems to start 2023, we are in the home stretch as far as COPL’s executing on its multi-pronged strategy. In fact, the shares seems to be responding to this prospect, actually set to close slightly up on 2022, quite an achievement given how dire the year has been for many. I chuckled to myself in writing this update on the company in the aftermath of a comment on Twitter that hardly anyone on social media is talking about the company. Such social media capitulation is very often a positive sign as it can indicate capitulation on the part of the bulls. With the market now waiting on early 2023 news regarding a speculation of V partner, a buyout, debt restructuring, one can say that this situation appears well poised, with negatives most likely already in the price.
11) Premier African (PREM): 0.5p Target 0.8p
While the share price is not everything as far as a small cap company is concerned, it certainly helps against the backdrop of what is certainly a bear market in the space. It can certainly be said that for shares of PREM to have been a triple digit both this year and last, we have a stock which understandably has earned a decent and loyal retail investor following. This is perhaps set to continue for 2023, given the fundamental drivers currently in place. For instance, we have line of sight at PREM on production, which is due to come on tap early in 2023. Given that we are talking lithium, and this mineral has been one of the few bright lights in H2 2022 as far as the small cap stocks on the London market, there would appear to be everything to play for from a bullish perspective. The December 20 update was something of a lap of honour, with some very pleasant detail thrown in. For instance, the company said multiple thick high-grade zones intersected, with the lithium-bearing mineral assemblage exhibiting high spodumene content in the thickest pegmatite, north and south of the Machakwe river. With progress said to be ongoing as far as the Zulu pilot plant, current timeline expectations look likely to met without issue. Those looking for risk diversification though, should be mindful that Premier is not just lithium, but also tungsten and rare earth elements, across a number of projects.
10) Firering (FRG): 8.5p Target 25p
In case anyone is wondering why Firering is one place above Premier African (PREM) in the list of stocks for 2023, the reason is that in terms of lithium intercepts for H2 2022, FRG is at 8 and PREM at 10. In fact, our friends at Atlantic Lithium (ALL) are up at 4 in the hit parade, while AfriTin (ATM) stood at 6. Of course, all of these companies look set to be winners, it is just a matter of which ones offer the greatest upside, share price growth from current levels / market cap. In the case of Firering, the company knocked the ball out of the park with its November update in which it revealed 64m, grading 1.24% Li2O, what it described as “exceptional and amongst the best intercepts recently reported by our global peers.” This should have been enough to deliver a significant re-rate for the shares, and it did until this month’s final set of results from the Atex Project of 25m @ 1.39% Li2O. Perhaps it was because this was revealed just before Christmas, but the market gave a rather curmudgeonly response second time around. However, as the data above has underlined, FRG is rubbing shoulders with world class peers, and unlike the names mentioned above whose market caps are towards £100m and above, FRG is only standing at £7m. So the upside seems to be primed, especially given the way that company received an $18.6m investment to advance its lithium projects through to DFS Stage. This underwriting of cost is certainly not be sniffed at, and therefore makes this relative market newcomer the play to look at, especially for those who feel that they may have missed the boat in other sector peers.
9) Galileo Resources (GLR): 1.3p Target 2.5p
Given how many companies that Colin Bird is on the board of, it would have been churlish not to include one of them in the line up for 2023. While it was a close run thing between Galileo and African Pioneer, the mantra of cash is king won the day. This refers to October’s announcement of the company electing to receive its share of the Glenover Consideration as £5.2m in cash rather than Afrimat shares. Although, the shares are currently up one third on the year, the news in the autumn would have perhaps been greeted with rather more enthusiasm if we were in more “normal” stock market conditions. Looking to the future though, there are plenty of fresh fundamental drivers to anticipate in 2023. For instance, earlier this month GLR found evidence for historic and current gold mining along a 7 kilometre-long outcropping greenstone trend at the Bulawayo gold project in Zimbabwe. In November we heard news of the completion of drilling at its Luansobe Copper Project in Zambia. At the time the company said the Mineral Resource Estimate will provide the information required to progress towards a potential open pit mine plan. So we have GLR fighting on multiple fronts, and with Glenover reminding us that when appropriate it is happy to cash in for a considerable sum, something that more than justifies not only the present £15m, but considerably more.
8) URA Holdings (URAH): 1.35p Target 3p
One of the rules we were reminded of this year as far as small caps, is that it is not necessarily how good the news a company releases that determines the stock market reaction, but when. For instance, releasing a knock out update in the middle of a bear market can be as bad as simply not releasing anything at all. In the case of recent stock market entrant URA, we were treated to a lesson in just how such a scenario can pan out. URA came to the main market of the LSE back in March with a market cap of just £3.2m, quite a result given the new rules regarding a £30m market cap floor. Taking advantage of this, and with this being a plus for investors, the company led by CEO Bernard Olivier of Lexington Gold (LEX), ticked all the right fundamental boxes from the get go. This included purchasing the Gravelotte emerald mine in South Africa, historically one of the largest emerald mines in the world and was operational from 1929 to 2002. As if this was not enough, last month the company revealed a total Independent maiden JORC (2012) Mineral Resource Estimate of 29 million carats of contained emerald. You do not have to be an expert in the gems space to work out that not only is this a big number for any company, but for a minnow such as URA is concerned, it is transformational. The estimated value of 29 million carats is as much as $261m. If small cap investors had even a modicum of enthusiasm they would have jumped on the URA bandwagon. As it is we would assume that during the course of 2023 the value that the company is sitting on will be more fully appreciated.
7) Emmerson (EML): 5p Target 15p
While URA can certainly be regarded as a microcap and perhaps not everyone’s cup of tea, even though it is on the main market, a larger company which also apparently has everything stacked up is Emmerson. This year was a big one for the Morocco focused potash play, with this all the more impressive given the way the such projects as it is involved with are typically a tangled web of red tape and bureaucracy. The pivotal news came in September was that Emmerson was fully funded after a £6m equity investment from Global Sustainable Minerals Pte Ltd at 6p per share. The company added that this cash would be enough for it to complete basic engineering work, permitting and project financing processes through to a construction decision for Khemisset. This was finessed last month with the announcement that the company had signed a non-binding MOU relating to the offtake of potash and salt to be produced. The benefit of this is as EML said that it would de-risking the development for debt and other financiers. All of this suggests that we are well advanced on the runaway to create Africa’s first much needed commercial potash mine. With the shares now near 5.4p it would appear that a floor is in place for the stock to move up to a more realistic level that takes into account all the hard work done to date by CEO Graham Clarke and the team.
6) Lifesafe (LIFS): 48p Target 100p
Another of the rather elite breed of IPOs for 2022, fire safety group seems destined to deliver as a leader in its chosen field. The strategy here was sound in that the company chose to lead with exploiting the domestic consumer regarding its StaySafe 5-in-1 fire extinguisher which can extinguish electrical, paper, textiles, cooking oil, petrol and diesel. The added plus is that it does this in an eco friendly way, something which has made the product a best seller on Amazon Prime. With this “every home should have one” product, Lifesafe has a solid revenue generating base to expand the footprint into the industrial area, as well as offering more products across the board for the domestic market. However, LIFS is doing well enough even with the present offering, with the upwardly revised its expectation of FY22 revenue to between £3.5m and £3.8m versus the previous £3m announced early this month. However, the big leap from the group for 2023 is going to be the newsflow associated with expansion into the wholesale and industrial areas. The big prize would be progress in the lithium-ion area, where as things stand when such batteries catch fire, the results can be disastrous. One only needs to think of laptop or EV fires to understand the scale of the problem and the unique position the company is to address a massive addressable market. Of course, investors in 2022 have not exactly been keen to give the benefit of the doubt to new concepts, even one as strong as next generation fire extinguishers. This is even though given how horrific EV fires can be one would imagine that fire extinguishers that can put them out would be mandatory as soon as they were produced. We are on the runway for such a scenario as earlier this month LIFS announced that it had made patent applications for a new fluid to extinguish lithium fires in lithium batteries. One would assume that Tesla’s Elon Musk, amongst other EV manufacturers will be taking note. In the meantime for 2023, with StaySafe 5-in-1 continuing to fly off the shelves and with the prospect of an expanded product roll out their appears to be little reason for LifeSafe shares to be trading below their 75p IPO price. Indeed, with only 22 million shares in issue it will take very little for the stock to squeeze back up from whence it came and beyond.
5) Arrow Exploration (AXL): 16.75p Target 40p
Although Arrow Exploration has been on the stock market for just over a year, the Colombia focused hydrocarbon play can already be classed as a safe pair of hands. This is said not only in terms of the shares which came to market at 7p, and recently peaked as high as 21p. There is also the matter of the board of the company, which is very much in the blue chip category in terms of notches on its belt and experience. All of this comes to a group with a market cap of £37m. CEO Marshall Abbott has led the company to be able to say that it is on track to achieve 3,000 barrels bopd within 18 months of listing, announced in the wake of record Q3 results as EBITDA rose from just under £1m to £4.6m. Those in the know regarding AXL are pointing to it being debt free, producing $2m of revenue per month, and therefore fully funded with $14m in cash as well as incremental production. With additional production set to come in imminently and going into 2023, there is the prospect by mid 2023 of a considerable ramp up in output as new wells come on board, leading to as much as 10,000 bopd, and a dividend payout in the manner of say, an i3 Energy. Given how long the shares have been consolidating in the upper teens, one would expect that the next time AXL shares break the 20p level, they will break higher for good.
4) Poolbeg (POLB): 6p Target 15p
While Poolbeg is a company which gets decent coverage as things stand, and has delivered strong newsflow over the course of 2022, the angle here is two pronged. The first driver is that after something of a hiatus in pandemic related news, it may be that the latest developments in China’s Covid surge, bring companies such as Poolbeg (POLB), Hvivo (HVO) and Novacyte (NCYT) back in focus with investors. The second driver with Poolbeg though is its position relative to Artificial Intelligence, something which we have been reminded of in the last month since the launch of ChatGPT. This has set social media alight, and it could very well be the case that once investors realise the potential leapfrog effect of AI in all areas of science and technology, they will appreciate the moves Poolbeg has made in this area all the more. To date we have read announcements that in November, the first of which centred on an AI programme leading to novel Respiratory Syncytial Virus drug targets. Later in the month there was news of the construction of the computational artificial intelligence influenza disease model being completed by CytoReason Limited. All of this is actually by definition even better than rocket science, and it could very well be the case that the market starts to appreciate the value of such game changing progress. The combination of Poolbeg’s data and AI really does offer an exciting prospect for 2023.
3) Reabold (RBD): 0.21p Target 0.5p
There is perhaps something of a coincidence to pan out in terms of Reabold being the next Prospex (PXEN), as far as being one of the most potentially outperforming stocks going forward. This is because in the autumn of last year Prospex survived a potential boardroom shakeup, something which now gives the impression of being a move to get control of a company at an opportunistic part of the cycle – just before things take off. In the case of Prospex the shares have quintupled since the rebel attack was seen off. A similar aftermath could be the result in the wake of recent failed moves for change at Reabold, something which the company has successfully seen off. In such situations shareholders can become unnerved, and the share price can suffer. However, now that the ordeal is over, we can expect sentiment to return, and the merits of the current management to be appreciated rather more than they have been to date. Indeed, so far little of the merit of the company’s sale of Corallian Energy to Shell has been factored in, or the prospect of a £4m distribution to shareholders. Reabold has said that it will use the proceeds of the £10 million sale to advance the development of its West Newton asset. Strangely, its valuation on Reabold’s books by the market is at a deep discount to that of Union Jack’s (UJO) 17%, even though Reabold has a 56% stake in the project. Such factors can be expected to be resolved positively for RBD now that recent requisition issues are out of the way.
2) Alkemy (ALK): 255p Target 750p
Being right on cue with newsflow is one of the best signs of future success and share price outperformance for small cap companies. This is what we have seen executed to perfection at Alkemy, the owner of Tees Valley Lithium. The goal here is for the company to develop projects in the energy transition metals sector, and this autumn saw major milestones achieved. The fun started, bringing Alkemy to investors’ attention with the announcement in October of Tees Valley Lithium entering into a MOU with bp Alternative Energy Investments, a subsidiary of BP (BP.). This announcement in itself flagged ALK’s pedigree, and subsequent news regarding planning permission being granted to develop Europe’s largest Lithium Hydroxide Refinery in Teesside, as well as a long Term Lease Agreed for TVL’s lithium processing facility have been the icing on the cake. With only some 7m shares in issue, largely owned by management, one would expect Alkemy to squeeze higher over the course of 2023, as further milestones are hit. The urgent need for the world to wean itself off dependence on China for its minerals processing fundamentally underpins the Alkemy story.
1) Hydrogen Utopia (HUI): 16p Target 50p
The winner as far as stocks to watch for 2023 has already proved itself in the most difficult fashion during 2022. Listing on Aquis in January at 7.5p, the waste plastic to energy group is set to hit the standard list of the LSE in January, quite a feat given the minimum £30m market cap requirement on this exchange. This is the equivalent of climbing the north face of the Eiger, given stock market conditions over the course of 2022 where so many IPOs are underwater. Having achieved its escape to victory, and with the stock tightly held, we can expect much more buying interest once the company is on the main board, especially on the institutionally side. The stock is already being actively marketed on the OTCQB in the U.S. as well as being listed on the Frankfurt Stock Exchange. CEO Aleksandra Binkowska has been proved exceptional in getting the footprint of the company on the international stage, a point underlined by the relationship with German hydrogen industry giant Linde. Indeed, the latest break for the shares through the 15p warrants zone means that those who do exercise can gain a tax free stock boost in their ISAs / SIPPs. The drivers for 2023 apart from the listing upgrade are the ongoing energy crunch post Ukraine as well as the need to address the waste plastic crisis. With HUI’s market cap now well above its peers, one can expect the former to overtake the latter in the next 12 months in terms of getting the first plant over the line, and the subsequent rollout all over Europe.
Disclaimer & Declaration of Interest
The information, investment views and recommendations in this article are provided for general information purposes only. Nothing in this article should be construed as a solicitation to buy or sell any financial product relating to any companies under discussion or to engage in or refrain from doing so or engaging in any other transaction. Any opinions or comments are made to the best of the knowledge and belief of the writer but no responsibility is accepted for actions based on such opinions or comments. Vox Markets may receive payment from companies mentioned for enhanced profiling or publication presence. The writer may or may not hold investments in the companies under discussion.
