Bitcoin? Pff, so yesterday. What's YOUR total punt stock?

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22nd Dec '17 by lemonjar

27 comments 7681 reads

Ok, probably a bit of punt of a conversation starter, but I just read Paul's comment on today's SCVR about holding Mobile Streams (LON:MOS) as a total punt stock. So I wondered what others have as their punt stocks?? Not thinking so much of the IQEs of the world, but more the low stockranking poor quality total jam tomorrow stocks you'd normally not touch with a barge pole...

I actually don't hold one right now (boring...?) though keep half an eye on OptiBiotix Health (LON:OPTI), Nanoco (LON:NANO), Kromek (LON:KMK) (briefly held, didn't work out) and one or two others.

Who's holding the diamond in the rough?? This could be a "told you so" post in a year's time :)

merry Xmas

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About the Author

Lemonjar

Premium Member

27 comments

runthejoules

27th Dec '17

Wish I'd been in ImmuPharma (LON:IMM), has been on a tear nice work Underscored.

Stupidly too many of my investments are in what other people would call punts. A lot have done okay recently but I'm too thick and slow to sell the spikes before they do a placing, usually. Kodal Minerals (LON:KOD) (disastrous) European Metals Holdings (LON:EMH) (in the doldrums) Versarien (LON:VRS) (again, should have sold spike & bought lower) Seeing Machines (LON:SEE) , OptiBiotix Health (LON:OPTI) , as of today, Westminster (LON:WSG) , Idox (LON:IDOX) and Luceco (LON:LUCE) for the recovery, £CAPX, Innovaderma (LON:IDP) and ValiRx (LON:VAL) which was really bad timing. Xeros Technology (LON:XSG) should have sold & bought back lower. I have a very (too) diverse portfolio and do hold some good stocks as well, honest!

Gromley

28th Dec '17

Interesting that you say in the initial post :

"Not thinking so much of the IQEs of the world, but more the low stockranking poor quality total jam tomorrow stocks you'd normally not touch with a barge pole..."

With this in mind , I would propose ... erm .... IQE (LON:IQE).

I presume that this was a "high flyer" at the start of 2017?

It recently lost it's green status for momentum and is now classed by Stocko as 'style neutral' - I'm not sure how dynamic the momentum measure actually is, but I would imagine it could even end up in the "sucker stock" bucket if the price continues to drift.

It's certainly not at this stage flagging much promise as far as Stock Ranks go (43 and reducing), so it arguably fits nicely into the unloved jam tomorrow category.

Arguably the price had "got ahead of itself" (at least in terms of investor sentiment) and fell on the back of a very positive (but not positive enough for some) trading update (down over 20% from its recent peak).

But essentially my reading is that the growth story is still very much intact (and at the point where this starts to really show in the numbers).

The falling momentum score may also be a bit of a 'false flag' ; certainly the share price momentum has stalled but in terms of earnings momentum - 2017 estimates fell slightly in December due to dilution , but in fact the Update suggests that the earnings 'beat' will exceed the dilution, meanwhile for 2018 I believe a number of (but not all) analysts have been cautiously sitting on their hands "we know the forecasts need to increase, but we haven't a clue by how much, so we'll leave it".

Share price wise I Personally believe that a 25% uplift to the recent highs is a very conservative expectation for 2018 and in fact some of the more outrageous aspirations are very much still in play.

It should be said that there is some concern that IPhone X sales (to which in the near term IQEs fortunes are deemed to be linked) may be disappointing, but there is much more to the potential than this.

March-2018 will be where the company provide their full 2017 results together with 2018 outlook and I would expect this to revert IQE back into the "high flyer" category.

Something that I have been musing on recently is that momentum is a negative predictor in the 'short term', but a positive indicator in the 'medium term' [either Ed or Ben cited this] - I wonder if this is a characterisation of that effect?

cig

28th Dec '17

Mine is serial disappointer Photonstar Led (LON:PSL) though I've almost lost hope myself. Keeping that small position on the off chance the current business model works out.

Rusty2

28th Dec '17

IQE (LON:IQE) "I presume that this was a "high flyer" at the start of 2017?"

No it would not have been a high flyer the value rank is too high at around 63, it would have been a Super Stock: http://reports.stockopedia.co.uk/1082719/IQE_LSE_1082719_20170103.pdf

Probably March High Flyer and then Style Neutral soon after that.

I do hold a small amount of IQE (LON:IQE), I'm not sure about them now, compared to some European peers they look expensive.

Gromley

28th Dec '17

Thanks Herbie , I was forgetting that IQE (LON:IQE) would have been sufficiently lowly priced to even score highly on value at the start of 2017 (sadly though, I had not discovered it at that stage). In fact though I'm pretty sure it was still rated as a 'high flyer' as late as early December.

I know (because I took a snapshot) that the Momentum Rank was 93 on 8th December vs 81 as of now, so these things can move relatively quickly (if of course the underling metrics being measured move).

Just out of interest when you say "compared to some European peers they look expensive" are there any particular metrics you are thinking about in that context?

Personally I think we have a situation where the consensus earning for 2017 and the growth into 2018 are understated (possibly significantly in the latter case) so I wouldn't be sure how to readily make comparisons.

Rusty2

28th Dec '17

I was just looking at the Stockopedia comparison, some basic numbers such as Mcap v net income, PEG, Value rank. IQE (LON:IQE) mcap is 58x net profit, WAF is 28. PEG IQE is 1.33, WAF is 0.36. IQE has some debt, WAF has lots of cash and pays about 3.5% divi. BESI same sector but different type of company, also measures well apart from PEG but as you say forecasts are not that reliable. But I think we need to start seeing some large increases in profits just like some of the European shares have produced in this sector.

FREng

29th Dec '17

The problem with new antibiotics is that they can't be sold in high volume because that would destroy their usefullness as resistance builds up. So they have to be kept as the antibiotic of last resort, rather than being sold by the tonne to farmers. Unless you know that £MTBF has found one where that cannot happen?

Wimbledonsprinter

29th Dec '17

FREng. That is true. Motif Bio (LON:MTFB) drug Iclaprim is targeted at acute bacterial skin and skin structure infections - the size of a iphone or larger - therefore potentially life threatening infections which will only be treated in a hospital setting. Other potential indications for which they hope to get approval will also only be for use in hospitals. Nevertheless, revenues and profits could be high in relation to market cap - one broker forecast I see is for net profit of $140m by 2022 - roughly similar to current market cap. Admittedly, all broker forecasts need to be taken with a pinch of salt and there are many hoops to get through.

FREng

29th Dec '17

Thanks for the extra info. Motif Bio (LON:MTFB) is now on my watch list!

Best wishes for the new year.

BlueFrew

29th Dec '17

I have some Summit Therapeutics (LON:SUMM) tucked away with fingers crossed. I've looked at drugs that might help my son (he has Duchenne) and I think this is the drug (Ezutromid) with a good chance of succeeding. The drug has come out of work that Dame Kay Davies has done. She is one of the foremost experts on Duchenne, so the science is certainly sound. However the issue has always been one of absorption into the bloodstream. The current phase II trial will show whether they have cracked that particular nut.

In boys with Duchenne, a protein called dystrophin in not present in their muscles. In immature muscles a protein called utrophin is present, but as the muscles mature utrophin is (in healthy muscle) replaced by near identical dystrophin. The idea of the drug Summit Therapeutics (LON:SUMM) are developing is to carry on the production of utrophin even in mature muscles. The reason I think it has a good chance of succeeding is because it is simply trying to increase production of a protein the body makes naturally anyway, rather than trying to fundamentally alter anything within the body.

They also have a C difficile antibiotic in trial as well. That seems promising, but it isn't really why I hold here. Although a successful phase II trial of Ezutromid may see somebody like Sarepta Therapeutics buy the rights to the drug while Summit becomes an antibiotic specialist. That may be a reason for the recent acquisition of Discuva. Though that's entirely speculation on my part.

extrader

30th Dec '17

Hi all,

I probably have a few total punt stocks without realising it......

Joking apart, my nomination for a 'conscious' punt is Zanaga Iron Ore Company ZIOC.

ZIOC - currently 12p - holds a 50% less one share holding in a project for the extraction of iron ore from the Republic of Congo (the 'good' Congo, not the neighbouring Democratic Republic of Congo). The other 50% plus one share is held by Glencore (GLEN), who acquired this stake when it took over Xstrata a few years back.

Xstrata spent abt US$ 350 m on the concession, exploration rights and feasibility studies in the good ol' days of the commodity cycle. The project has been on hold because depressed iron ore prices /lack of Chinese demand didn't support the economics, which include a significant capex element for the infrastructure (at present non-existent) to transport the ore from the coast to a seaport for export.

The resource is of particularly high quality and quantity (potentially the 4th or 5th biggest on the planet). It is much 'cleaner' to smelt than most iron ore, a factor which appears to becoming more important to the Chinese.

There have been no cash calls or dilution since IPO (at around 200p, from memory) and the principal shareholders of ZIOC are HNWI's, including Clifford Elphick (Gem Diamonds), with a limited free float.

The 'punt ' is based on the 'gut feel' that the commodity cycle may have turned and various RNS's since the granting a few months back of a long-delayed Environmental Permit (including recent Chinese investment in potentially-connected infrastructure useful to ZIOC ) suggesting that management is clearing the decks for a sale.

There are many moving parts and unknowns (ZIOC's 'price'; GLEN's 'price', the Chinese (?) appetite) and possible outcomes, from outright sale of ZIOC's stake to A.N. OTHER, through to some kind of ongoing involvement with carried interest.

I've seen bulletin board speculation (I know, I know - 'consider the source' !) ranging from 30p, through 77p cash and a residual stake in the project to outlandish ££ numbers if you factor in the mine's potential 30 year life...

The asymmetric risk/reward - the share price hit a low of 2p in its darkest hours ;-> - make this an interesting punt IMHO.

I hold. NAI, DYOR etc etc

dustyie

30th Dec '17

Techfinancials TechFinancials Inc (LON:TECH) a DIAMOND EXCHANGE on block chain platform

This stock seems more credible than bit coin , check it on the video link below

https://cedex.com/videos
Remenber it a jam tomorrow stock ....... it boom or burst I think in 12 months

ambrosia

3rd Jan '18

intellia its on the nasdaq,
real jam tomorrow company, but if they can do what they say they can do, it'll be massive

homosap

3rd Jan '18

A total punt I bought a month or so back is Katanga Mining quoted on the Toronto Stock exchange. It is up over 200% during last year and up over 100% during the last month and 23% yesterday. While I would like to claim it as a well researched investment it is in fact no more than a punt on a potentially major cobalt mining operation in the DRC majority owned by Glencore. Mining operations were suspended for refurbishment and are only just beginning to come back on stream. It is expected that the demand for cobalt will increase dramatically with the spread of electric vehicles. Katanga topped out in 2007 at over 10 times the curret share price. I have not, however, crunched the numbers and in view if the considerable investment since then in the mines this may not be a significant marker for where the shares may top out in the future. Clearly the shares currently have a considerable speculative wind at their back.

Aislabie

22nd Dec '18

A year has gone by, so it is time to “fess up” (as Americans say). My two risky punts for the year have proved to be no triumph.
Gfinity (LON:GFIN) has had an almost continual decline from 23p to 7.3p. Revenue has climbed and the company seems to be getting established in the esports world, but profit does not seem to be in any near future and the fund raises will probably continue. Such raises could get much more difficult in a nervous 2019 market. In any case from this position it will require a better than 300% rise in the price to restore what has been lost. Probably there is little risk in sitting this one out for a while.
Intercede (LON:IGP) is exactly at the price, 28p, that it was a year ago. In the circumstances of the market this is not at all a bad situation and I would like more of my stocks to have been there! The turnaround is clearly underway and while the small profit in the 6 mths to 30 Sept came from tax credits, it does indicate (along with the growth in net cash) that there is something to look forward to. I will continue to hold

AnonymousUser252054

22nd Dec '18

My punt-picks would be a micro-cap turnaround hopeful, an energy seller with perpetually suspect accounts and a small biotech wannabe, so all in all, a mixed bag
Ashley House (LON:ASH) (11.75p) EV £8.4 m
Utilitywise (LON:UTW) (7.9p) EV £21 m
Angle (LON:AGL) (39p) EV of £48 m.

mortimer

24th Dec '18

sounds like conversations about the grand national

AnonymousUser252054

10th Jan '19

Interesting RNS from Angle (LON:AGL) this afternoon.

Disclosure: No position currently.

BarrySt

11th Jan '19

Motif Bio (LON:MTFB) has started to rise in anticipation of FDA approval (appreciate the OP was a year ago)

Howard Marx

11th Jan '19

After today's share price fall, I am selecting QUIZ (LON:QUIZ) for both Fantasy & real-world portfolios for five reasons:

Online revenue growth healthy at +34%
Huge scope to expand on the High Street e.g. they have less that 15 stand-alone stores in London & the South East
Healthy Balance Sheet - net cash £12.3m vs. market cap of £30m
Concerns re Debenhams (LON:DEB) are exaggerated - Debenhams concessions represent less than 15% of Group revenue
Valuation - Mr Market tends to get manic depressive after a sequence of profit warnings - which provides asymmetric share price upside (e.g. Superdry (LON:SDRY) has bounced 50% in the last month after three successive profit warnings led to widespread investor despondency).

The current year EV/EBITDA (based on today's revised guidance) is just 2.1x

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Bitcoin? Pff, so yesterday. What's YOUR total punt stock?

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Lemonjar

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