Speculative Stock Portfolio

[aus_trader]

It's bee a long time since I bought any speculative stocks. And looking back I think that was a good move since any positions would have been held only for a short time as the market continued down.

Still cautious about overall market but I decided to buy back Zip Co Ltd(Z1P) that I have had in this portfolio before. It's having some price move from consolidating for a while which is similar to what is seen on the bigger multi-billion dollar rival Afterpay Touch Group Ltd (APT).

PS: I have also changed Qty for the CSS shares to allow for the share split/consolidation that took place recently.

Open Portfolio:

 

[aus_trader]

Just got out of Yowie Group Ltd (YOW). I've given it enough time to see a recovery. Management keeps going on and on about the tough retail environment and the amazing success and increasing market share of it's biggest competitor, which caused the latest plunge in share price.

Closed Positions:

 

[aus_trader]

Zip Co Ltd (Z1P) has had a great day up 6.7% on news Chemist warehouse joining Zip Platform.

 

[aus_trader]

After a nice move up to 20c, Food Revolution Group Ltd (FOD) has fallen steadily and was sold today.

Closed:

 

[aus_trader]

Gold price has dropped a bit and I have decided to sell Aurelia Metals Ltd(AMI) position. The sell order got filled just now.



Closed Positions:

 

[aus_trader]

Clean Seas Seafood Ltd (CSS) was sold today. It was punished by the market yesterday after the numbers came out. I think the fact that the company still hasn't got to Break Even numbers must have frustrated the big market players. I'll keep it in a watchlist, now that it is sold...

Although the market has been in a strong rally since the start of the year, I felt cautious buying into it. In fact some of the Gold related Entities in the Medium/Longer Term Stock Portfolio is a reflection of this. I haven't gone out digging up every speculative stock and loading up on the good ones with this market rally. I am still on the cautious side and happy to buy cautiously into defensive stocks. One such stock was added to the Medium/Longer Term Stock Portfolio today.

Closed Positions:

 

[aus_trader]

Zip Co Ltd (Z1P) has had a good run and I have decided to take profits as it is offering a Share Purchase Plan at 1.53 which I should be eligible to. The allocation could be so tiny though as they are capping the maximum to be raised at 5m.

Closed Positions:


Got a fair bit of cash as a result of selling this portfolio but in no hurry to speculate at the moment.

Also there a low-ball bid put in for the Children's Chocolate manufacturer Yowie Group Ltd (YOW) which was sold from this portfolio not long ago.

 

[aus_trader]

Oil price has been going up recently so have been looking into buying one of the more established oil players since the speculative end generally have their own shocks independent of the oil price.

Beach Energy Ltd (BPT) has run up so hard recently and near all time highs, so didn't pick that as there may be a pull back as soon as I buy. So decided to buy some Woodside Petroleum Limited (WPL) shares since the share price has actually pulled back despite a strong oil price. Not sure of holding long term so it's not in my Medium/Longer Term Stock Portfolio.

Open Portfolio:

 

[aus_trader]

Cash box waiting to be discovered...

In the same area of oil/gas research I was doing which led me to buy WPL yesterday, found a spec play with more cash than it's current market cap. Company is Karoon Energy Ltd (KAR) which has been in this portfolio before. Current market cap is around 255m but it has 330m cash and no debt. What about any value attributed to it's oil/gas exploration assets?

With Oil price slowly moving up, I am happy to take a stake given that KAR should be limited on the downside due to the cash backing. In fact if fund managers and private equity trusts discover this it may even get a share price boost due to the arbitrage opportunity.

Open Portfolio:

 

[aus_trader]

Zip Co Ltd (Z1P) shares from Share Purchase Plan (SPP) were listed today. Only 500 shares appeared in my account. Not sure how this was worked out initially, but then I came across their method of allocation:


I was hoping for a full 15% allocation as has been calculated by Zaxon in this #28 post. Since my parcel was too small to break up into "sell a portion and keep a portion", I sold the allocated 500 shares today.

Closed Positions:

 

[aus_trader]

Normally I look at market forces driving the markets such as price of Oil/Gold and individual company fundamentals. Although I don't look for specific patterns etc on the charts to make a buy decision, I do check out the chart of the stock or index that I am buying.

If chart reading / technical analysis can help to improve the performance then that's something that is really worth considering. Although I don't like analysis-paralysis, it's good to have a few more tick boxes to increase the chance of picking stocks that's poised to head higher. This gives the stock more of a "weight of evidence" criteria for selection rather than a single criteria.

So I've been monitoring some of the stocks of interest including some of the recent sells to check if it may be worth entering. Aurelia Metals Ltd (AMI) was one such stock that was recently sold in this portfolio. When it produced a Pin bar a couple of days ago on the 24th of April, I was interested. So I thought if it heads higher from there then the pin bar may signal selling exhaustion and I'll buy it...



That's what it did today, so bought some shares this morning.

Open Portfolio:

 

[Zaxon]

That's what it did today, so bought some shares this morning.

I too own AMI, and have done for a while. Gold stocks were very hot there for a while, but they all seem to have died of late. Now AMI isn't a pure gold play. They also do base metals. Here is their breakdown:


If you compare the gold price (their biggest revenue source) to AMI over the last 12 months, I wouldn't say their share price matches gold that closely, though obviously it's influenced by it.


Gold

AMI

 

[aus_trader]

I too own AMI, and have done for a while. Gold stocks were very hot there for a while, but they all seem to have died of late. Now AMI isn't a pure gold play. They also do base metals. Here is their breakdown:
View attachment 94187

If you compare the gold price (their biggest revenue source) to AMI over the last 12 months, I wouldn't say their share price matches gold that closely, though obviously it's influenced by it.


Gold
View attachment 94185
AMI
View attachment 94186

What I also like about AMI is it's actually producing a fair bit of cash.

Talking about gold miners in general, it's one thing having a large deposit (M Oz's) or some frantic operation pumping out a gazillion ounces per annum but a lot of gold operations are barely profitable. Some of the operations I have come across just looks not even feasible at current gold prices. I mean if an operation costs somewhere in the vicinity of US$1200 per ounce to pull the stuff out is it even worth it?

Not the case with AMI, it has a lucrative margin that gives a good buffer to stay profitable even if gold prices were to drop quite a bit. To add to your slides Zaxon, here's the low-down on it's profitability numbers:


I specially like the bit where the Cash/(Net Debt) jumped from a 32mil in debt last year to a 100mil+ cash this year !

 

[tech/a]

I too own AMI, and have done for a while. Gold stocks were very hot there for a while, but they all seem to have died of late. Now AMI isn't a pure gold play. They also do base metals. Here is their breakdown:
View attachment 94187

If you compare the gold price (their biggest revenue source) to AMI over the last 12 months, I wouldn't say their share price matches gold that closely, though obviously it's influenced by it.


Gold
View attachment 94185
AMI
View attachment 94186

Price is only moving between 60 and 80 cents
Potential profit is limited in my chartist view
Until something indicates a trend.
Think there are better opportunities.

 

[Zaxon]

Price is only moving between 60 and 80 cents
Potential profit is limited in my chartist view
Until something indicates a trend.
Think there are better opportunities.

The monthly chart shows a steady downward trend, so I've been far less impressed with AMI of late. It's total return over the last 12 months is 89.6%, so it has been an amazing stock. Currently I'm holding on to see if the monthly trend continues or reverses. But certainly in the short term, better opportunities elsewhere.

 

[aus_trader]

Price is only moving between 60 and 80 cents
Potential profit is limited in my chartist view
Until something indicates a trend.
Think there are better opportunities.

You could be right. However at the current profit capacity, the valuation for this stock is not stretched, see below:

I guess the big factor that could determine which way the stock may break out of the trading range you mentioned is the price of Gold. If gold goes lower, I guess the stock may slide along with it. However if gold soars, watch out

 

[Zaxon]

I guess the big factor that could determine which way the stock may break out of the trading range you mentioned is the price of Gold.

What's been dogging AMI specifically of late is the rumour that they may buy Glencore's CSA mine. We've been discussing this (elsewhere) for a while, but finally AMI put out a statement about it.

 

[aus_trader]

What's been dogging AMI specifically of late is the rumour that they may buy Glencore's CSA mine. We've been discussing this (elsewhere) for a while, but finally AMI put out a statement about it.

View attachment 94228

Hey Zaxon can you please put a bit more information about this possible acquisition here buddy ? It would be easier if you've been discussing it elsewhere with others already. Just cut and paste or summarise what you know about the merits or demerits of this possible purchase. I know I would appreciate it and any others reading this thread would as well.

 

[Zaxon]

Hey Zaxon can you please put a bit more information about this possible acquisition here buddy ?

Essentially Glencore is having some regulatory issues. They're trying to sell down non-core assets to free up some cash. Glencore has no other assets in the CSA Mine area.

However, AMI do. So it's a natural fit for them. Glencore, however, is asking too much for it. AMI said they would be interested in acquiring CSA, but not at the price Glencore is asking.

Separately, AMI has gone into a trading halt today. They're losing someone in upper management. Must be someone very significant to warrant a halt.

 

[aus_trader]

Essentially Glencore is having some regulatory issues. They're trying to sell down non-core assets to free up some cash. Glencore has no other assets in the CSA Mine area.

However, AMI do. So it's a natural fit for them. Glencore, however, is asking too much for it. AMI said they would be interested in acquiring CSA, but not at the price Glencore is asking.

Separately, AMI has gone into a trading halt today. They're losing someone in upper management. Must be someone very significant to warrant a halt.

Thanks mate, good information to know. It's good AMI is not buying the distressed assets at any old price and paying too much. Sometimes the newly acquired asset could be the drag on a good company like AMI. I know a similar situation occurred with Metals X Limited(MLX), a profitable miner that was pumping out cash like clockwork from a Tin operation they own. However Buying another mining asset called Nifty has caused the company to bleed cash ever since and the share price is on the slide as well. Miner and myself have been discussing it for a while including today in the MLX thread.