Today's market overview
For some reason, maybe it's the wall to wall sunshine, equity markets are in confident mood again this morning. Not that our resident charting specialist Dominic Picarda is convinced by the rally, he thinks its more likely to offer a shorting opportunity.
IC TIP UPDATES:
Gulf Keystone's (
GKP
) results are among the most-read of any around today despite being a little thin on any new news, such is the prolific flow of news out of the company between results announcements. But what the company does confirm is that its plans to be producing 40,000 barrels of oil per day some time in 2013 remain on track. Many punters are hoping the company gets taken out before then anyway, which is one of the bull points in our buy case.
Sticking with oils, but a little closer to home in the North Sea, Ithaca Energy (
IAE
) has announced the commencement of commercial production at its Athena field in the Outer Moray Firth. The news has boosted Trap Oil (
TRAP
) too, which has plans in place for the company to complete an acquisition of 10 per cent of the Athena field by the end of the current quarter. Both companies remain on our buy list.
Entertainment One (
ETO
), the film and television content owner and distributor has more than doubled its full year revenues on the back of strong sales across its range of content, including the Peppa Pig children's programmes, which have broken America, and the Twilight teen film series. The company's share price has been hit by the calling off of takeover talks earlier this year and rumours the company is going to make an acquisition of its own, but this makes it even better value now.
Affero Mining's (
AFF
) investors have welcomed news this morning that its Nkout iron ore project in Cameroon has been deemed economically viable by independent assessors. This means it can move to a pre-feasibility study by 2013, although developing the mine to its full potential could cost almost $4bn (£2.5bn). Shares have sold off in recent months with the wider commodity sector but remain a buy for the long term value in the Nkout resource.
KEY STORIES:
Hargreaves Services (
HSP
) is the stand out car crash stock of the day. Its value has tumbled by around one third after the coal miner reported problems at its key Maltby Colliery in Yorkshire. An extension to the colliery has encountered problems with water ingress and gas build up and had to be abandoned. The problems encountered will result in a 12-16 week delay in production in the financial year ending May 2013, which will hit profits for £12m-£16m.
Cairn Energy’s (
CNE
) losing streak continues. The oil explorer recently bought North Sea outfit Agora Oil & Gas to diversify its risk away from Greenland, where it has drilled a series of unsuccessful wells. But the company’s first appraisal well since the $450m acquisition, the Tybalt prospect which is jointly held with Valiant Petroleum (
VPP
), has been found to be uncommercial.
OTHER COMPANY NEWS:
Engineering design software business Aveva (
AVV
) is popular after reporting a very resilient set of full year results. The company is very cash generative, hence the increased dividend, and it remains on the lookout for acquisition opportunities.
888 Holdings (
888
) has joined its fellow online gambling businesses in settling an outstanding back taxes bill with the Spanish authorities which means it should now qualify for the upcoming round of eGaming licences.
Greek mobile phone software business Globo (
GBO
) has been dragged down recently by concerns about the state of the Greek economy. Hence the trading statement today which emphasises how well the company is doing outside of Greece and reaffirms plans to sell the Greek consumer part of its business.
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