Sunday, 22 June 2014

DocsLaymanChatter XXI

Yet another busy week in the markets and of course I'm now running nearly a month behind for my summer break, with a trip down to mid Wales planned over the coming weeks and of course a longer than usual summer holiday penciled in I still find myself at only 40% cash not 80%.

This may seem an odd statement but I have been exposed or trading the markets over summer for years and never done particularly well during this period so made a promise to myself I'd take a layoff by this re-charging the batteries. Oil & Gas seems to have picked up the mantle held by the junior miners earlier in the year, clearly we are seeing the signs of a busy few weeks in this sector. Rose Petroleum seems to have private investors reveling after they announced their recent fund raise. £6.5m for a small company like this is pretty impressive and whilst the market was informed that the placing was oversubscribed I went off to chat to a city source to confirm the level of interest. Indeed the report came back that Rose pet looked to raise £5m yet the placing demand was incredible thus they agreed to move it up to house some decent industry money then scaled back others as the £6.5m demonstrated a great demand. (I hold stock to be clear)

Having seemingly shared some mixed words with my old buddy Tom Winnifrith regards our old spar Lenigas it was clear that regardless of who was right or wrong! Leni Gas & Oil released a correction statement 6 days after I flagged up there error. Now Tom didn't think it was a story and thats fine, '' I did '' In essence the correction was still out at sea but nonetheless it's been highlighted via RNS and the fact 6 days later tells us everything. I'm not worrying about this now as that battle has ended. I think my 32% short / sell call on LGO here shows that the understanding would have been rewarded should you have held an interest (I don't / have not to be clear) - The call was made here

After following the adventures of sheriff Winni down to the Quindell Agm I have to say '' Love him or hate him he does what he say's '' I think this is paramount as a journalist, writer, commentator or blogger. Many make the noise and fail to follow up with action. There is no doubt that Tom is a man that lets the actions speak as loud as his words, I enjoyed the video's of which you can see here.

Quindell what are you hiding?
Quindell I don't think you will be popular in the FT or Sunday times

Over to Astar Minerals, It would appear that I'm back up against James Parter and Tom Winnifrith with reference to Astar Minerals. James felt the companies valuation was wrong and Tom found holes in what he believes to be the news released by the company.

I have enjoyed both fellow writers work in the past and I certainly don't intend on locking horns over any a company with folk I know to be good writers, particularly those unafraid to ask awkward questions, so I intend to cover this based on fact and my own personal opinion.

Astar was a shell company with a legacy board and unworkable assets, the company sat on a shelf with nowhere to go until the new team initiated change. Andrew Frangos and Stefan Olivier came onboard from Cornhill Capital with a view to taking Astar into the oil and gas space in Mexico. We have been told since day one that the team jumped on a plane into country and you can hear the Chairman AF comments here In Andrews words '' We have been a team for nearly 10 years, We are young enough yet old enough through hard work to do deals which we are excited about ''

I covered Astar at 0.1p or 1p post consolidation which wasn't a bad shout when you consider it hit high's of 3.95p, I wanted to explain a little further as to how I could see this move shaping up against those who believe the company is overvalued.

Astar as a shell held £1m with a market capitalisation a little over that price so for me it was a case of, If the right people come in with the right idea's then we would see an uplift from the 1-1.25p area and quite quickly. Legacy holders represented a very small amount of the company so the upside would come in essence from the new money entering. With a hint of direction the share price nearly always rises as the seed of possibilities are planted and I believe this is what Astar has done '' Planted seeds of potential whilst forming meaningful relationships '' this does not mean Astar are fool proof or infact bullet proof but it does show that they have not done as many have before them and just either sat on hands taking wages / remuneration or as with another well known shell '' left legacy holders open to drive the companies value down '' so far so good then ay?

Not really as the sheriff of aim Tom has drawn pistols towards Astar too, I'm just waiting for the raft of open letters that he loves to pen, but will say this '' when Tom get's a bee in his stetson then usually he has good reason '' So off I went to try and look at the pro's and con's of Astar further. My findings and reasoning is quite simple.

If the CEO and Chairman had set this company up as a quick meal ticket with an insincere view then It begs the question?

Why would the CEO leave a young family to spend 3 months overseas for a very modest financial reward (if any at all) also why would two brokers in the city jeopardize their current and future business relationships for a relatively modest amount of cash. From some fag packet arithmetic the company could have (if disingenuous) pocketed a hundred grand but in reality that's chicken feed to sell your future out which is why I don't believe this is the case at all.

I believe Tom may have a point on terminology and whilst investors are pissed off at him right now I know how much value Tom holds, I have also enjoyed a pizza and beer with him and always found Tom to be a great guy, on this ground I won't be drawn into personal berating that I see in social media so please leave me out of that. I also see James Parters point on valuation although believe that using a nav calculation is insane right now as clearly it adds no par value to the recent news nor the possibilites born out of change.

I have no reason not to believe that Astar are working hard to do what they say will and until I find otherwise then I'm behind hard working folk also don't see a slam dunk case against them nor see a big enough agenda to warrant two guys ruining their professional futures.

The Jv with the Nogal's seems to have caused a stir but if we consider that the affiliations are through a subsidiary or other venture partnership in which this  relationship can be made perfectly clear then really what is the crime? '' Not being acutely correct '' well that was a point I raised last week but was a non-story.

Needless to say I called the CEO here who was on the move stateside to Mexico, I didn't hear the tone of doubt in either Stefan or Andrews voice but I accept I could be wrong.

Keep your peckers up


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(These are but opinions derived from my own experiences and thoughts and are not adopted as a statement of fact)

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