Material gainers were Aeorema, Pilbara Minerals and Thungela.
Material Falls were MPAC, TekCapital, Treatt, Vertu and Vistry.
A number of other holdings had significant moves, mainly adverse, but were in themselves not material to the portfolio.
Sales
Hallmark Financial This company remains well below its NTAV. However after significant losses this year its NTAV is much lower than it was. In August the annual results suggested to me that whilst unlikely it is almost at the point where losses could exceed NTAV. Having hit my trigger point I needed to either sell and move on or add further to the position. Adding did not appeal so the position was sold. 50% loss.
Holders. Poor results. Yes they need time to implement the changes they are making but value is disappearing as the company losses money and management really on its holding to keep the shareholders complaint in the place of better communication. Loss 20%. Only redemmed by being a sub 1% holding.
Jadestone. Another month another warning about Operations. Possibly not the most dramatic issue but I have lost confidence in the management so sold. 5% loss.
New Purchases
PetroTal – This is a company that on quite conservative modelling after the release of the 2022 ½ year will make at least £80m. (Management have indicted a significantly higher figure). With a market cap of £400m and cash in the bank it is a PE of 5 or less. Added to this the company has had a number of issues, that if they get resolved will improve the picture and is itself doing a number of things to improve the operations. The big risk is of course the oil price. But I think it is staying high. So I am buying a conservatively valued business with a number of possible upsides many of them potentially very material. On an EPV basis I think this business is significantly undervalued.
Southern Energy Corporation - £95m market cap of which £25m is cash from a recent raise. The company is running at the end of Q2 at £8m a year profit and in the Q2 report raised a number of items that should make a £15m run rate by year end perfectly possible. So a PE of somewhere between 9 and 4 with potentially a number of follow on upsides. Again the issue is the oil and gas prices.
Reductions
Aviva. Results added to the general feeling that the company continues to sit on excess capital. This will allow the ongoing dividend stream to be strong and the company is beginning to accept that it has little rationale to hold the cash so there is likely to be a capital return.
Vertu. Sold a small part of my Vertu holding. It hit a trigger point and I reduced to free up some cash to do something else with. I still hold most of my position as I think the company is under rated. But it was hitting a trigger line and I felt there were larger and more certain opportunities elsewhere.
Adds to existing holdings
Capital Ltd. Really strong Operating Results. The company is not the easiest so gets avoided, so gets undervalued. I added
Crocs. This was a sub 1% holding at the end of July. All my sub 1% holdings are looked at on a regular basis with a consideration to add to or sell. Crocs thesis still looks strong and the business undervalued so I added.
Chevron. I continue to be happy to invest in Oil and increasingly see news that suggests that the market is operating under genuine restrictions and maybe even overcapacity. As such the oil price is imho unlikely to collapse. Chevron is my big oil investment.
Lithium Americas. Another sub 1% holding that when I had some cash I wanted to move up. Plus any day now they should get rulings on their Thacker Pass project. If they win I expect a share price movement. It is after all possibly the greenest project in the world. Though regularly opposed by the green movement who only want mining in the third world. If they lose I think given the Govt move to support US lithium a way will be found to allow the project. Also added to the position in Lithium that I gave up with the URNM sale last month.
Serica Energy. As I sold Jadestone I added to Serica as a small O&G company.
TP-ICAP. Strong results reinforced my initial thesis and this position got moved above 1%.