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Our 2022 Picks: How did we get on in July?

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It was a quiet month in July for our stock portfolio. Some of the prevalent themes in June carried over into July, including the war in Ukraine, the lockdowns in China, high energy prices, and inflation. There has been plenty of speculation on the course of interest rate rises and where peak inflation might occur. Worries also mounted around the prospects for a global recession in the second half of the year.

We purged most of the underperformers from the portfolio in June, but sold some of our Finnish holdings in July as well (see below). This reflected a broader sell-off in the markets, which seemed to have stabilised a little as July progressed. Many investors we speak to now are sitting on the sidelines going into the holiday period, trying to assess whether the market has further to fall. Mining stocks are looking spectacularly undervalued at the moment.

FPX Nickel

We met with the management team of FPX Nickel earlier in the summer, which we have now added to our venture portfolio. This is a Canadian-listed small cap nickel venture which is attracting plenty of attention from the auto sector in North America. As a nickel resource its Decar Nickel District in British Columbia looks fairly formidable. The company is currently carrying out a step out nickel drilling project at its Van target. We know that FPX Nickel has been approached by auto firms that are keen to get a piece of this action before a major miner steps in.

Kempower

This is a Finnish-listed specialist in the EV charging technology space. We originally looked at the stock back in April. It is tightly held, and only listed on Nasdaq Helsinki First North last December. Kempower’s turnover in 2021 was €27.4 million. But its target is a €200 million turnover p.a. in four to six years. Large orders have been received already in Nordic countries from Finland (S-Group), Sweden, Norway and Denmark. It also has subsidiaries already in Germany, the Netherlands, the UK, Norway, France and Spain.

Qt Group

Leaving the portfolio this month is Qt Group, another Nordic stock and a global software play. The company issued a profit warning at the very end of July. It lowered its net sales outlook for the full year. Preliminary, unaudited figures for 2Q of this year showed net sales of EUR 37m, which is a 9% gain against the same period last year. Energy prices, inflation and “increased cautiousness in customer behaviour, especially in Asia” was blamed by management. Shares dropped from just under EUR 80 to trade just above to EUR 60 level.

Remedy Entertainment

Another software developer we took profits on was Remedy Entertainment, also leaving the portfolio in July. The company makes video games, including some fairly high profile gaming franchises, among them Max Payne and Alan Wake. It is based in Helsinki, and has been consistently profitable since it went public in 2017. Shares have not been doing well this year. Our trade peaked in late April and we took profits as the stock started to sink. The company applied to issue options rights to the tune of 2019 options rights in May, at the price of EUR 9.23 per share.

Sold in July

Harvia, MP Evans, Qt Group, Remedy Entertainment

Tactical trading portfolio

These are shorter term equity and commodity trades which we can see playing out within one to three months. We will sometimes keep these on longer if the trade is still quite range bound but we are anticipating further upside. These trades have the tightest risk parameters.

Company/Instrument Start price Current price* Percentage change
Raytheon Technologies 73.39 93.21 +27.1%
Sosander 15.80 21.25 +34.9%
Lloyds Bank 40.40 45.25 +11.9%
Glencore 272.00 461.85 +69.8%
Hugo Boss 52.00 57.5 +10.6%
BP 337.95 400.0 +18.4%
SPDR Gold Shares ETF 173.00 164.1 -5.1%
BHP 2389 2248.5 -5.9%
Kingfisher (Short) 244.30 258.60 +5.9%

*Prices as of close of play on 29th July 2022

Longer term buy and hold portfolio

These are positions where we see a longer term growth scenario, usually in the small to mid cap space, but sometimes larger companies. We will typically be keeping these stocks on the list for at least six months and often longer. Consequently our risk tolerance is higher for these positions than for the trading list.

Company/Instrument Start price Current price* Percentage change
Yellow Cake 211.50 373.6 +76.6%
MTI Wireless 47.00 54.5 +16.0%
Nordnet 152.20 135.95 -10.7%
First Rand 5229 6555 +25.4%
Turkish Airlines 13.86 50.4 +263.6%
Live Nation 81.78 92.78 +13.5%
Airtel Africa 109.6 158.8 +44.9%
Riverstone Energy 566 674 +19.1%
VinaCapital Vietnam Opportunity 498 504.0 +1.2%
Kenmare Resources 503.0 441 -12.3%
Genesco 62 56.05 -9.6%
BlackRock World Mining 699 672.57 -3.8%
Anglo American 3355 2950 -12.1%

*Prices as of close of play on 29th July 2022

Venture portfolio

These are companies which we see as having long term and considerable growth prospects. Due to their size and the nature of the business they are in, we feel that our normal risk management constraints should not be applied to these stocks.

Company/Instrument Start price Current price* Percentage change
Nano One 1.13 2.89 +155.8%
Taat Global Alternatives  1.26 0.80 -36.5%
Kodiak Copper 0.24 1.02 +325%
Euro Manganese 0.44 0.29 -34.1%
Thunderbird Entertainment 1.05 3.7 +252.4%
Pineapple Power 3.25 3.05 -6.2%
Red Moon Resources 0.82 3.4 +314.6%
Cloudbreak Discovery 4.50 2.03 -54.9%
EnWave Corp 1.01 0.62 -38.6%
Net Zero Infrastructure 0.045 0.0220 -51.1% shares suspended
Electric Guitar 3.22 2.85 -11.5
CleanTech Lithium 35.2 21.25 -39.6%
Canadian Overseas Petroleum 32.5 18.25 -43.8%
Torq Resources 0.75 0.60 -20.0%
DeepMarkit Corp 0.80 0.07 -91.3%
Network Media Group 0.10 0.07 -30%
Fortitude Gold 6.7 6.05 -9.7%
Europa Oil & Gas 0.025 0.0235 -6%
FPX Nickel 0.48 0.48 0%

*Prices as of close of play on 29th July 2022

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This article does not constitute investment advice. Do your own research or consult a professional advisor.

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