2 Overlooked Companies, That Could Be About to Release Signficant News

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2 Overlooked Companies, That Could Be About to Release Signficant News

The content of this blog is not intended as investment advice. Please do you own research.

Making money on small cap companies can be hard, in fact, “Over the past 20 years, investors would have lost money in 72 per cent of all the companies ever to have listed on Aim“.

As regards small caps, I believe you have to do the research and combine this with buying at the right price.

I’ve often said (although I may have subconsciously acquired it from someone) that you can buy shares in a bad company at a good price and make money and conversely buy shares in a good company, at a bad price and lose money. The magic combination is, to buy a good company at a good price.

How do you know what is a good price to pay for a company?

In revenue and profit generating companies, there’s many types of valution metrics you study ie price / earning ratio, earnings per share and return on capital employed are just a few but for small caps it’s different.

Often these companies have no revenue let alone profits to speak of. The share price is largely driven by news and momentum.

If the news is good and it attracts enough attention, the share price will rise. This rise will attract more buyers and the momentum takes the share price higher. The trick with small caps is not to be too late to the party.

This is why I believe research is the answer.

Find a company with cash, good assets, a strong shareholder base and a management team with a decent track record (and a plan to boot) and all you have to do is buy at a good price, then wait for the news.

This is why I’m highlighting the 2 companies below, as I believe they have the above qualities but are largely overlooked, due to their lack of news, which should change over the next few months…

2 Overlooked Companies, That Could Be About to Release Signficant News

COMPANY 1

Energiser Invetments (ENGI)
Share Price: 2.375p
Market Cap: £3.56m

Energiser Investments is an investment company that invests in operating companies, with an underlying property portfolio. For example, serviced apartment companies. It can also invest directly through equity or loans into property.

I’ve written a blog post about Energiser before. Essentially their management have a good track record but are still to reveal the first step in their plan, which is, investing in operating companies.

CEO Dominic White has been on the podcast twice to outline their plan but we still await the news, the will kick off this plan. It can’t be that far off, as it was back in October when the company restructured its board to bring in Dominic White, who’s objective is to launch a focused investment and growth program.

To add Energiser Investments (ENGI) to your Vox Markets watchlist click here and hit the, “Follow” Button.

 

COMPANY 2

Upland Resources (UPL)
Share Price: 1.25p
Market Cap: £5.89m

You can read my previous blog post on Upland Resource by clicking here.

To summarise, Upland Resources have a 2 phase strategy.

Strategy 1: To acquire interests, low risk, near term cash generating assets.

So far, they have completed their first strategy, albeit, with a bit of a hiccup on the second asset acquisition, Wressle.

The stumbling block was Lincolnshire County Council’s Planning Committee, who refused planning consent for the development of the Wressle Oil Field (subject to planning going ahead, Upland will hold a 10% interest in this field).

There’s an appeal process going on and several parties close to the situation are confident it will be resovled as the planning was refused on a previously drilled well. I think a good analogy I heard was: it’s like the council giving you planning permission to build a swimming pool, then refusing planning to fill it with water.

In fact one of the interested parties in this licence, Union Jack Oil, are so confident that a positive resolution will follow, that they’ve recently increased percentage holding at Wressle.

Strategy 2: To acquire higher risk but company transformative assets.

On a recent podcast, CEO Dr Steve Staley, when gently pressed by me, suggested news on strategy 2 should be released in the next 6 months but hopefully closer to 3 months.

They are looking at the following areas: Morocco (worth noting the success Sound Energy has had in this region), Malaysia (lot’s of board experience in this area) and another region, not yet revealed.

Steve and the board have a very good track record, are fastidious in their due diligence and have a lot of skin on the game

To add Upland Resources (UPL) to your Vox Markets watchlist click here and hit the, “Follow” Button.

The content of this podcast (or content associated with it) is not intended as investment advice and people featured may hold positions in the companies they talk about. Please do you own research.

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The content of this podcast (or content associated with it) is not intended as investment advice and people featured may hold positions in the companies they talk about. Please do you own research.