Stock Picks | I3E - BREAKOUT IN PROGRESS?

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7th Apr '22 by AnonymousUser858

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AnonymousUser858

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5 comments

timarr

7th Apr '22

Hi tournesol

I bought into I3 Energy (LON:I3E) after researching it following your previous post. Unsurprisingly I'm quite pleased so far but I agree that the share probably has quite a long way to go.

This is the first time since those heady TMF days of the early noughties that I've invested in oil stocks and it's all a bit reminiscent of those times. Underinvestment in oil exploration leading to a supply shortage, opening up the possibility of serious gains in smaller oil stocks sitting on exploitable reserves. Even better if they're actually producing since they can suddenly pay off debt and fund developement from their own cashflow.

Given the timescales to bring new development online the next stage would be M&A, you'd think.

There are a few of these around - Iog (LON:IOG) and Union Jack Oil (LON:UJO) have both moved into production at just the right time, for instance.

History doesn't repeat, of course, but it does seem to be rhyming.

timarr

Roodini

10th Apr '22

hi timarr,

If you want to explore some others Serica energy £SQZ is producing vast quantities of gas and its current annual revenue is about the same as its market cap!

An estimate of its cash flow can be found here from its own results.

I checked the data again last week based on current o&g prices. £sqz

£Igas has also started a break out. In its last it was highly valued well above its current price back in the day when fracking was taking off in the USA. Since it was banned in the UK all that value vanished.

Also worth checking out O&G service companies And drilling companies have been in long term sucker stocks but most are starting to breakout. On the us markets NBR, SLCA, NOV etc.

timarr

10th Apr '22

Hi Roodini

If you want to explore some others Serica energy Serica Energy (LON:SQZ) is producing vast quantities of gas and its current annual revenue is about the same as its market cap!

Thanks. I've held Serica for quite a while now, but not Igas. I don't really believe fracking will be allowed in the UK, I think the current study is a political sop for the fracking wing of the Tory party.

timarr

Roodini

10th Apr '22

Hi Tamaarr, you might be right, but I think if they don’t start fracking then the gas prices will continue to sky rocket. If they do restart then in a few year time, gas prices should come down a bit but IGAS et al will likely be a multibagger.

Did you see this article the other day about serica.

https://www.proactiveinvestors...

Some Investment bank raised its target for it to #6.

“The US bank similarly rates Serica Energy as a ‘buy’ and hikes its target to 600p, from 360p, and called the company’s exposure to UK gas prices “unrivalled”

Ive held for a while aswell and likely will for some time yet.

Brilliant Leader

12th Apr '22

Thanks for the write up tournesol, I bought into £i3e in February having never heard of or researched them before this year (I normally avoid the O&G sector). I note that 2021 FY results have been published this morning with a significant beat against the forecasts shown by Stockopedia, that is, 2.6p EPS actual versus 0.58p forecast, although revenue is as per forecasts. Nonetheless, once these results are picked up by Stockopedia I suspect they will lose their momentum trap status as the quality score rises.

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i3E - BREAKOUT IN PROGRESS?

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AnonymousUser858

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