Has anybody had a look at Jupiter 2nd Enhanced Inc (LON:JSE)?
They are trading at a tiny forward p/e and throwing off cash.
Your distant relation
Your link shows a big negative free cash flow figure over the last 5 years and a massive hike (c20fold) in the number of shares.
And no dividends - it's not clear where the cash is being thrown, but doesn't seem to be in the direction of shareholders.
They are quite a new company, around 5 years or so, and have been buying up assets, which is where all the cash is going.
Have stated they expect to announce a maiden divi in 2020
Yes, held them for a while. In a similar mould to Petrotal (LON:PTAL), RockRose Energy (LON:RRE) and Serica Energy (LON:SQZ) , but offering some geographical diversification. There are some good commentators in the ADVFN board (yes, I know...) who do a lot of continuous diligence and scuttlebutt in them. Worth checking out.
I think JSE is a fantastic company. It is set up by the guys who took Talisman from nowhere to be the second biggest oil producer in the North Sea. Mount Tiede on ADVFN knows his stuff on this one. There is VERY little broker coverage but the IC mentioned a likely EPS of 31p next year, and the current SP is 55p. I think this is a very likely multi bagger and have bought in heavily over the last 6 weeks. It is hugely cash generative and one of the companies that isn't that well served by the Stock process, which is invariably focused more on historic results, and thus doesn't really work for companies that are moving from development into production.
If you look at LON:RRE you can see that 3 years ago it had a stock rank of 11 and a share price of 45p. It now has a stock rank of 91 and a share price of £17.45. I see no reason why LON:JSE won't follow a similar path: in fact, they could do even better as they are in a less competitive part of the world and their management team has more experience than that or RRE. Though I hold both.
Yeah, the quality rank is very backwards looking, so I think I'll disregard it. Thank you for the reply
Yeah, I'd noticed the similarities. Big oil leaving cigar butts behind. Thank you for your response
Today's Investors Chronicle (1st November 2019) now rates Jupiter 2nd Enhanced Inc (LON:JSE) a buy at 54 pence (having been a hold at 54 pence back in August). Prospects for growth are encouraging. Despite the red flags, it might be worth a cautious punt...
I really think the red flags in this case are a product of stock ranks being backward looking. They are not a good measure for companies that are in the development sphere, whether developing drugs or oil and gas fields. In the case of LON:JSE, their basic model is to buy established O&G assets that majors no longer want, and then exploit them ruthlessly. The majors are effectively forced sellers, often happy to give away the assets. The risks are relatively unlikely but high impact: mainly either than the O&G price collapses or that there is a site specific incident causing death, injury or pollution. But imo these companies are among the lowest risk, highest reward plays out there.
I really think the red flags in this case are a product of stock ranks being backward looking.
I wouldn't so much call them red flags as warning notes to take a look at.
They are not a good measure for companies that are in the development sphere, whether developing drugs or oil and gas fields.
I don't know if it is true or not that the StockRanks (and the QualityRanks in particular) 'discriminate against' these industries.
I do know however, that the do discriminate against early stage pre-profitability companies ( Jadestone Energy Inc (LON:JSE) is actually profitable now on a TTM basis). You can argue that the lifecycle phase they are in renders some of the measures irrelevant ; on the other hand it is observable that "pre-profitability companies often don't make it or take much longer (and more fund-raises) to become unprofitable. They are much more unreliable investments than more established companies.
By the same token, companies developing drugs, oil & gas fields, or mines are much less reliable investments than other industries.
That to me is the key to StockRanks - a low SR does not mean bargepole/bad investment - it means that on average stocks with similar characteristics are bad investments and therefore you should be much more certain of the specific investment merits to find the winners as the odds are not in your favour.
I know little about Jadestone Energy Inc (LON:JSE) , but your brief description put me in mind of Sylvania Platinum (LON:SLP) in the sense that they are not doing the same thing as their apparent peers.
So I am not convinced that the QR is harsh on Jadestone because it is in "oil & gas", but simply because it has not (yet) demonstrated that it can deliver sustainable profitability.
Many of the biggest winners come from low SR stocks, but the low SR is a reminder of the fact that they are quite rare.
Jadestone Energy Inc has jumped to 68 pence from 55 pence three weeks ago (23% increase). After my rather ill-informed remarks about red flags, I now hold.
Acquisition effectively increases the size of the business (on a number of metrics) by c.30% for what is likely to be less than $10m (they may even end up being paid.!) Really think the market has failed to reflect this excellent move and expect to see a continued re-rate to deal completion. Management are excellent and delivered a clear presentation and conf call yesterday which I recommend to anyone wanting to understand it more.
On Monday, 18th November Jadestone Energy acquired a 69% working interest in the Maari project in the Taranaki basin, New Zealand. On 19th November, Berenberg, on the basis of this acquisition, raised its target price in the group from 110 pence to 130 pence. The price of these shares has risen 30% in the last three weeks. It's usually unwise to buy shares on a parabolic rise, but if there's a pull back to mid 60s I'd be tempted to buy more.
Any one looking for a low cost cash generative oil company should have a look at £JSE
Listened to their presentation this morning on link from their RNS this morning for any one interest in them it’s well worth a listen when it uploads to their site
Other small cash generative miners are available
