2014 – The Great Irish Share Valuation Project (Part VII)

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Botswana Diamonds, C&C Group, Formation Group, Irish Continental Group, Irish shares, Irish Stock Exchange, Irish value investing, ISEQ, Kingspan Group, Minco, Orogen Gold, TGISVP, The Great Irish Share Valuation Project, Tullow Oil

Continued from here:

[NB: Worth revisiting Part I if you’re a new reader, or you’d like a refresher on TGISVP & my approach to the whole project.]

Company:   Tullow Oil

Prior Post(s):   2012 & 2013

Ticker:  TLW:LN

Price:   GBP 800p

Well, I’ve definitely offended TLW shareholders in the past two years – particularly in 2012, when I predicted a 339p price target (vs. a share price of 1543p at the time). WTF..?! But I must admit, their response was far more dignified than that of the junior resource hoi polloi – clearly a better class of people. [The other day, I was amused to read about a US small-cap CEO lamenting his shareholder base used to ‘include those nice guys at Fidelity’, but now it was ‘just guys in muscle tees from Jersey!’] Hmmm, maybe they just weren’t taking me too seriously? But at this point, I bet they’re taking their bloody losses seriously. 😉 Ouch, down nearly 50% in the past two years (after bouncing from a recent 736p low).

Well, Tullow obviously needs to pick up its game on the exploration front, results were decidedly mixed in 2013. [It’s interesting to see how exploration drilling success (or failure) is still such a primary share price driver for a company the size of Tullow]. At this point, continued exploration success in Kenya has become increasingly important for the company, with estimated gross recoverable resources of 600 million boe (potentially a billion boe plus) to tap. I suspect we’ll also see a continuing secondary focus on Atlantic Margins exploration, but other non-core exploration (& mature production) assets will be likely disposal targets. Which explains the latest annual report cover: Africa’s Leading Independent Oil Company – current production in West Africa, future potential in East Africa.

2013 – The Great Irish Share Valuation Project (Part VIII)

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Aer Lingus Group, Anton Bilton, distressed investing, equine DNA, Greencore Group, IMC Exploration Group, Irish shares, Irish value investing, ISEQ 20 ETF, iShares MSCI Ireland ETF, New Ireland Fund, Orogen Gold, Pension Deficit, Ryanair Holdings, Smurfit Kappa Group, TGISVP, The Great Irish Share Valuation Project, Uniq plc

Continued from here.

Company:   Greencore Group

Prior Post:   Here     (valuation, see here & here for commentary!)

Ticker:   GNC:LN

Price:   GBP 95.75p

Well, I guess my perspective on Greencore last year was horribly wrong..! I’ve long considered GNC a distressed company, but the market clearly disagrees. So much so, the share price rallied almost 70% in the past year – my price target (of GBP 32.5p) was certainly left choking in the dust! But if my distressed premise is correct – and, objectively, I can’t see how you’d disagree with me – this rally isn’t so surprising. What..?! But companies like this are always a binary proposition – they simply die, or they survive & maybe even thrive eventually. And if everybody still feels blithely happy about them, they present a temptingly cheap buy. Greencore’s also a nice scary reminder of how dangerous shorting can be – poor underlying fundamentals are often ignored far longer than you can take the pain…

Fastnet – What’s the Forecast?

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2P Reserves, Aventine Resources, Bruce Rowan, bubbles, Cathal Friel, Cove Energy, FAST, Fastnet Oil & Gas, Independent Resources, Island Oil & Gas, John Craven, Jubilee Field, junior resource stocks, Kosmos Energy, Michael Nolan, Minco, Minmet, Mizzen Basin, Molly Malone Basin, oil, Oisin Fanning, Orogen Gold, Paul Griffiths, Petroceltic, prospective resources, Raglan Capital, Rathdowney Resources, San Leon Energy, shipping forecast, short sellers, shorting, Sterling Green Group, Terra Energy, TGISVP, Tiger Resource Finance, US Oil & Gas, USOP, value investing

I eyed up US Oil & Gas (USOP) here (‘I swear, yer ‘onor, I wuz just looking…I nevah touched ‘er!‘), and promised to return to Fastnet Oil & Gas (FAST:LN)… Ooh er, collywobbles – what’s he going to say about this one? Well, I really don’t know, we’ll just have to see where this post takes us – a reminder I never have an agenda when taking a first look at a company. My only wish is to find an undervalued & interesting company, regardless of sector or business. That, to me, is sheer bliss..! On the other hand, finding a ridiculously overvalued company is simply a fascinating glimpse of (in?) humanity. Because shorting such a stock would be all too rare for me.

And no, I don’t think shorting stocks is the inverse of good (value) investing. In fact, I can’t emphasize that enough! I believe there are v few investors with the aptitude & fortitude to regularly short stocks successfully. And there’s whole other dimensions to that skill, anyway – as I’ve noted about overvalued stocks:

‘…there’s always a chance, on their journey to oblivion, that they’ll bubble higher & longer than you might ever expect. After all, you can’t analyze irrationality, and you certainly can’t analyze stupidity…’

Right, back to the job at hand: Aah, Fastnet… That really conjures up childhood memories of the shipping forecast. ‘Specially on a stormy night. It’s amazing the drama one could wring from such rigid & clipped broadcasts. Comfortably sprawled in front of a blazing fire – half asleep before bed-time… Drifting away to the cadence of the names – Fastnet, Malin Head, Dogger. Thoughts of far-off barren rocks, mournful lighthouse flashes, giant crashing waves, and lonely fishing boats adrift in the black night, were sure to send a delicious thrill down one’s spine. Seems I’m not the only one who fell under this spell – just take a look here: ‘Influences on Popular Culture’. Here’s another fond tribute... And finally, here’s a marvelous Economist piece on the Fastnet lighthouse.

The Great Irish Share Valuation Project X

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Fiomi Diagnostics, Galantas Gold, George Soros, John Teeling, Lisa B, Minco, NAMA, New Ireland Fund, Norish, O'Donoghues, Oisin Fanning, Orogen Gold, Papua Mining, Papua New Guinea, Petrel Resources, Phillip Goldstein, Rathdowney Resources, Raven Russia, Real Estate Opportunities, San Leon Energy, shorting, Strongbow Capital, TGISVP, Trinity Biotech

Continued from here:

OK, we’re in the home straight now, at least within the original valuation stage of TGISVP. Eight companies left, mostly junior resource companies, so that should be fun..! I’ve booted Real Estate Opportunities (REO:LN), as trading was suspended in January. And please, let’s not bother talking about NAMA, court cases etc… For years now, REO’s had terrible corporate governance, far too much leverage, and pretty much promised to totally fuck investors... And so it has come to pass, and shareholders don’t even have a luxury Moroccan get-away to show for it…

I’ve no desire to short shares usually – a value mindset is far too dangerous an attribute to possess if you want to play that game. But watching REO fly far too close to the sun, and not even notice its wings were melting, I just got far too itchy… I really wasn’t worried what the price was – GBP 20p, 5p, 3p…who cares when it’s going to zero anyway. Unfortunately, I couldn’t find a spread-better who would deal in it – even Worldspreads (and their zero spreads…), if I recall..!? Perhaps I didn’t ring around/push hard enough? If anybody managed to do this successfully, I’d love to hear more details?