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

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October was a tough month for a lot of investors and professional portfolio managers. There were very few bright spots in the market. Inflation and energy prices have remained a major source of concern, both for market participants and also the wider public. What happens in the financial markets – and on the battlefields of Ukraine – is being felt on the high street. Some money managers have told us they have taken client assets almost entirely into cash.

BOUGHT: Octopus Renewables Infrastructure Trust [LON:ORIT]

We added another investment trust to our portfolio. Even before COP 27, we were aware that there is a lot more money and government support going into the renewable energy space. Some of the best opportunities are not in directly listed assets, which is why it is sometimes better to simply buy an investment trust to get this exposure. There are a handful of very good quality trusts operating in this space, so we were spoiled for choice. ORIT’s is not just a European strategy – it has assets in Australia as well. Those interested in the topic should also check out our very interesting chat with Ross Grier of the NextEnergy Solar Fund on our podcast.

BOUGHT & SOLD: Kistos [AIM:KIST]

Sometimes a trade just blows up on you. You buy the stock and then it almost instantly breaches your risk limits, causing you to sell it again. In the interests of full transparency, we have to own up to this one. We liked the fundamentals on Kistos, and even though the gas market has slipped a little, the North Sea producer still appealed to us on several levels. Investors seem concerned about the company’s tax position however. Although shares have rallied again since we sold them, we have to respect our risk management limits on this one. They remain down 3.16% over the six month period.

HOLD: SPDR Gold Shares [NYSE:GLD]

We are keeping SPDR Gold Shares in the tactical portfolio as an inflation hedge. Although it dropped more than 10% from our entry point, we have maintained the ETF in the portfolio as we anticipated inflation would pick up, and gold with it. Many gold bulls have been baffled over the last six months at the lack of activity in the gold price. GLD dropped south of our 10% risk limit but we kept the trade on more as a hedge mechanic than an active position. As it turns out the gold price has rallied into November. This seems to be more to do with the flight from cryptocurrencies than the impact of inflation. More on this when we have it.

CLOSED: Twitter [NASDAQ:TWTR] – short position

We exited our short position on Twitter following the acquisition of the company by Elon Musk. The shares have now been suspended. We felt there were a number of key issues with Twitter – as did many other investors – which Musk has also realised, hence his initial effort to back out of the deal. It looked like a great short opportunity. Musk is now in the process of drastically cleaning house within Twitter, with thousands of redundancies. We went short Twitter at $40 in August, but exited the trade in early October when the short turned against us at $44.

SOLD: Europa Oil & Gas [LON:EOG]

Like Elon Musk, we were cleaning house in the energy portfolio. Europa Oil & Gas saw its share price plunge in October from 2.2 pence to 1.13 pence. Going into the end of October, it had changed little. The selling seems to have been prompted on news that the Serenity appraisal well in the North Sea was disappointing. i3 Energy and Europa said they would plug and abandon the well. We expect more from our energy stocks, and given the state of global energy markets, this one was going in entirely the wrong direction. Bad news was compounded by the fact that 100 feet of other targets in the Captain sands were found to be water wet.

Sold this month: BHP, Hugo Boss, Kistos, DeepMarkit, Anglo American, Europa Oil & Gas

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 94.82 +29.3%
Sosander 15.80 18.75 +19%
Lloyds Bank 40.40 42.02 +4%
Glencore 272.00 499.5 +83.6%
BP 337.95 479.8 +42%
SPDR Gold Shares ETF 173.00 152.24 -12%
Kingfisher (Short) 244.30 218.9 -10.4%
Croda 7174 6760 -5.8%
NVIDIA (Short) 136.47 134.97 -1.1%
Gabelli Merger Plus+ 9 9 +/- 0.0%
HealthEquity 71 77.94 +9.8%

*Prices as of close of play on 31st October 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 211.50 428.60 +102.6%
MTI Wireless 47.00 49 +4.3%
Nordnet 152.20 137.0 -10%
First Rand 5229 6435 +23.1%
Turkish Airlines 13.86 101.30 +630.9%
Live Nation 81.78 80.0 -2.2%
Airtel Africa 109.6 113.1 +3.2%
Riverstone Energy 566 634 +12%
VinaCapital Vietnam Opportunity 498 429.5 -13.8%
Kenmare Resources 503.0 410.5 -18.4%
BlackRock World Mining 699 647.23 -7.4%
Implenia 26.8 37.6 +39.5%
Next Energy Solar 120 107.2 -10.7%
Octopus Renewables Infrastructure Trust 104.4 104.6 +0.2%

*Prices as of close of play on 31st October 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 2.77 +145.1%
Taat Global Alternatives  1.26 0.46 -63.5%
Kodiak Copper 0.24 0.74 +208.3%
Euro Manganese 0.44 0.27  -38.6%
Thunderbird Entertainment 1.05 3.34 +218.1%
Pineapple Power 3.25 1.88 -42.2%
Atlas Salt 0.82 1.9 +131.7%
Cloudbreak Discovery 4.50 1.35 -70.0%
Net Zero Infrastructure 0.045 0.0220 -51.1% Shares suspended, here’s why
Electric Guitar 3.22 2.65  -17.7%
CleanTech Lithium 35.2 48.5 +37.8%
Canadian Overseas Petroleum 32.5 16.05 -50.6%
Torq Resources 0.75 0.62 -17.3%
Network Media Group 0.10 0.09 -10%
Fortitude Gold 6.7 5.6 -16.4%
FPX Nickel 0.5 0.42 -16%
Medigene AG 2.4 2.28 -5%
Sogeclair 22.9 16.7 -27.1%

*Prices as of close of play on 31st October 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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