Member Info for TrekMadone

Hi HH,

I seldom trade anything that I don’t want to hold. So basically I do my fundi’s the same for a trade as I would an investment.

Sometimes that may mean a hop on hop off like I have done recently with FRES, AVCT and HEMO but I know the story and if I get it wrong it’s ok to wait. That mitigates losses and helps with one’s impatience! But I will buy a dip opportunity knowing the news calendar and then sell the news even if just a %.

It’s also really important to be able to trade in the volume that I want. I can’t have a stock where you put £xk and then can’t sell coz there is no market! So watch the volumes and the spread.

Also I often trade the same stocks because of what nom says about understanding the stock and not just a chart. I also don’t mind paying more than I previously sold for to go again grabbing an extra nibble.

That’s my trading and I accept it’s non conventional but I am not really a trader. I am more of an active investor.

For stocks I hold I usually trade some and hold some. But only if there is the opportunity.

This year I have been trading down a position so if I have 10 shares I may sell 5 and buy them back cheaper to lower my average. It sounds simple but you have to be all over it! And you must always watch the bottom line to know that you have the same number of shares and your capital remains the same or more.

This year has been more difficult, obviously, but by trading done on my largest positions I am up significantly again just in the last few weeks of the year! My best has been DEC where I have more shares and a core holding at 1025 giving me a +23% yield after tax!

But I don’t get them all right. SEPL is a company I highly rate and having been at below 90p average with 50k shares I sold them at 123-130 range.

Only to buy them back paying 128 average now. But the news changed, so did the outlook and ops improved. So I decided that I would re-enter. So that time a position of just hold would have worked. But I protected my capital following a court summons and a rig capsize! Joy!

And that’s key. Like I keep saying there are really only two rules to investing.

Rule 1 protect your capital

Rule 2 see rule 1!!

No capital and you are out! So never be afraid to take an early loss if that’s what it takes. I feel for the guys at COPL it really sucks! We posted many warnings here but it still don’t stop folk getting caught out. I have been and so have the others!

You will find your own way and that’s the most important,

Good luck

Usual caveats

Trek

IQAI - interesting that you wouldn’t trust a CEO with a near 30% stake from him and his family in the business that has reputable scientists working for them. It also has a contract with a multi billion dollar mcap customer + FDA’s which you obvwoupd be aware are notoriously difficult to come by.

Yet you would consider HARL who could depend on government contracts. Now they really are trustworthy!

Furthermore, you are able to jump to a derogatory conclusion about the CEO of a biotech and yet you ask for advice on another investment. Surely you would be able to apply the same level of DD having previously arrived at such a conclusion with another potential investment and be able to make your own mind up.

You will usually find us pretty helpful here and try to share experience. Even with a posters first post who clearly knows a lot already!

Or perhaps it’s just me overthinking stuff!

Pays when investing though!

Usual caveats

Trek

Mixed day today but now I have only 1 realistic moonshot left in play, IQAI! That’s how it goes.

I don’t see DEST as a ten bagger from its current mcap although not impossible.

TXP was never a realistic ten bag but given the current SP low it’s should do v well from there.

PXC I am now mostly out given the self imposed delays!

Yesterday I sold some DEC at 1176 and bought them back today paying more! I wasn’t expecting the SP to react positively to the over due reply to congress. I guess given its questionable legality they can wait for a detailed company reply! But that’s just an income stock.

It’s one of those things some trades come off others don't but never be afraid to hop back on. I do still have my DEC 1025’s under the mattress though!

As for other baggers I still like both UPL and BRES esp that both have pulled back a little but I haven’t done loads of research on them. Enough to take a position though but then I keep getting attracted to income.

Particularly at SEPL which could easily double its divi soon so I added more there and at PHNX which I rate as undervalued and has indeed lagged the sector even after recent excellent guidance!

So IQAI is the last remaining potential ‘rocket stock’ in my pf which I hold with ever increasing confidence I might add!

Usual caveats

Trek

Right-on,

I have sent two emails. Not had any replies.

I have arrived at my decision having been misled several times now, albeit I do appreciate the complexities and would buy back in once finance is resolved as that is what is needed to ‘release’ the asset.

I have two rules with investing…

Rule one … protect your capital!

Rule two… see rule 1!

I am not prepared based on my research and evidence to allow further wealth erosion. I was able to liquidate over time what was for me a significant position and still have a few left after their self imposed ‘deadline’ unless they’ve been stopped out now!

Good luck with your investment here I hope it comes off.

Usual caveats

Trek

It’s admirable that DEC propose to respond openly to the questions which go well beyond the regulatory expectations and would also reveal significant commercial information.

Don’t get me wrong whilst I expect a responsible operator to hold much of that information and be closing any gaps it seems that the underlying content, timing and short lead time is for political gain rather than being an environmental champion!

I would assume that every oil and gas producer and indeed any ‘polluter’ both private and public should have to account similarly. That includes the state that have adopted redundant wells! Especially given what is now an absolute admission of state liability and neglect!

The irony is that DEC and next level with their smarter technology could actually be the solution rather than the problem. It could indeed make sense for the states to quantify their own liabilities and scale up the likes of Next Lvl to address these problems constructively without political point scoring!

Now that would be a win win outcome!

Usual caveats

Trek

I have been here for over 2 years and am probably down overall mitigated by some well timed trades esp on the last bounce to +30p from under 20p where I nearly doubled my trading pot which covered some previous losses.

It’s great having so few shares but it also can work against you. If the news isn’t good it’ll be impossible to exit hence I sold gradually as by the 2nd Jan approached and seemed less likely.

However, if the news is good it will be equally impossible to buy until the sp settles down.

The lack of liquidity here has added additional risk to the uncertainty. Given the bod ‘crying wolf’ so many times I have no idea what to expect anymore.

I will probably sell the last few tomorrow or Monday at latest, reset and take it from there but it’s likely I end up adding to other positions which are financed and due news soon. That seems the more sensible option now.

If the bod can misled about the key bond financing then they can equally mislead elsewhere and I fully expect any finance to now include a placing as part of it which will be open to all as a softener, probably via primary bid. Which is fine if you have a few k sat in your bank account!

If that’s the case then I will defo buy back in after as they will have cash to meet the first coupons.

If the deal doesn’t come through then imo the sp will just keep dripping down as the assets are only as good as the cash!

Good luck,

Usual caveats

Trek

Hi Gav,

Yes DEC remain as operator.

The sale of assets was the original collateral on the balance sheet of 230m for the sustainably linked loan. This represented 305m of our RCF.

The steady predictable production has enabled a favourable reduction in debt albeit we have given up a % of assets.

I doubt this was a response to the enquiry. It would have been unlikely to conclude this structure within that window. I suspect this was always planned as another step to enhance the SP with better debt terms and less asset risk. There are some big holders here who must be significantly underwater!

At least now they can see an increased likelihood of the dividends paying off their investment assuming the 30m cash and the 12% reduction in debt compensates for the assumed loss in revenue from those divi producing assets.

That bit to me isn’t clear but I kind of figure if not then what’s the point!

Usual caveats

Trek

Pretty clear and succinct.

The cash position really takes the pressure off as they can move M3 forward, funded, whilst getting the best deal for XF. And note that there are several interested parties.

Just hold/buy the dips and this should play out successfully soon.

Not many stocks you can say that about!

I’d rather sit here than elsewhere in the mining/biotech/E&P sector wandering when the next raise is!

The XF deal here should be hugely transformational for the SP!

Usual caveats

Trek

I agree publican,

Imo the objective of this move was just a catalyst to flush out an appropriate bid following the last failed attempt.

For sure holders want to cash out but not at this price.

It’ll come!

Usual caveats

Trek

That’s why there are a lot of longs that are also short and shorts that are also long. And profit churns + forwards sells and CFD’s!

The PI hold and hugs facilitate the above especially in a stagnant market like London!

I hope the hold and hugs win but there will also be many other winners along the way!

It’s just that in this casino or even on the majority of the wider London market for that matter, hold and hug seldom pays. Go look at the stock charts!

You see it’s fundamentally geared against hold as the MM doesn’t get paid if no one trades. The more volatility the more trades. Hence we see stocks go up and down disproportionately on low volumes. Even a 20% sp swing whilst 99% of folk may stick!

They don’t make any money if everyone sticks!

Hence the published MM schemes to generate trades through a variety of means like ALGO’S, AT trades, small transactions and hedges.

But it’s not all bad coz without the MM a sell on an illiquid stock could be at 20p and a buy at 100p!

So they do… make a market!

But the fkrs also run long/short bets alongside their books!

Usual caveats

Trek

Thanks Tiburn,

I have always stated that DEC’s cashflow drivers are primarily about volume and breakeven as opposed to NG price and yet the market is fixated on price even though it is below or for that matter even above the hedged price.

It’s the volumes that turn the dial on profitability once the hedge is set above the breakeven which includes debt payments, ops costs and of course divi etc.

So here’s a thing. With price well below DEC’s hedges logically one would assume that uneconomic, unhedged competitors would at least switch off uneconomic operations hence allowing others to fill the void.

Surely a low NG price environment against solid demand with decs hedges at a premium is not a bad scenario!

But then there’s logic and there’s trading!

I am trying to play both whilst having a long outlook and would rather buy and hold! Such joy!

Usual caveats

Trek

I am mostly on sidelines now.

My concern is that given the further delays how will the first payments be met on the copper bond.

We have 4-6months working capital and the Riverfort to finish paying.

Of course it could all come out of the 80m but also it could be a parallel equity raise to meet first payment, which I expect to be bi-annual.

I just don’t know enough now and can only guess but the longer it takes the more of the cash balance is used.

Hence reduced accordingly.

Will likely buy back more when I see the terms and hopefully at a much higher price but the Bod really hasn’t helped investors here!

Good luck all

Usual caveats

Trek

“ Why is the market down today ?”

Coz the market doesn’t think rate cuts will be as deep and as rapid as first thought.

As well as economic news..

Weather, Red Sea etc are inflation drivers and ME risk heightened.

Usual caveats

Trek

Hi Evi,

All things said I took a few off today at 1176!

Just moved a third to cash into the close with a view of feeding back in later.

Trek

Pretty close to start up news imo.

All present and correct RNS due to ramp the SP up!

Can’t see any bad news this close to the placing news. Now that would be silly and even if things weren’t’ ‘tickety boo’ atm then it would be viewed as needing just some WD40 so not sufficiently market sensitive at least yet.

Bigger news good or bad much further on yet imo. Next RNS will be to onboard holders.

Makes for a nice trade even if you don’t understand this stuff there’s usually some underlying logic and odds one can play!

That’s the theory!

Usual caveats

Trek

Great news! Increased dividend stream coming up for SEPL!

I was looking at the trade spread which was less than 0.5p. I thought that’s odd. Then I saw the RNS!

Just added 2k shares. Nigeria is a high growth market and this will be extra revs for sepl!

Usual caveats

Trek

The underlying tone of the DEC narrative is total return to shareholders!

Rusty is obviously pretty pssd at the SP and now we have this interesting dynamic where irrespective of the market perception there are buyers for our hedged producing low decline assets!

And that’s irrespective of the now obsolescent 2021 Bloomberg politically motivated headline grabbing narrative!

There’s obviously little perceived risk from that follow up engagement as our suitor has now made a huge financial commitment which would have involved in depth DD!

Likewise there is obviously confidence in allowing DEC to operate the asset. Indeed the lowest CD seems to be debt reduction!

We have posted here before how the stock price has been diametrically opposed to the US 10year treasuries!

I see this deal as another risk mitigation taking on board erstwhile unforeseen events, namely higher interest rates, the magnitude of which was an under appreciated threat in the previous modelling!

DEC is about returning money to shareholders by the responsible and profitable run off of assets.

That model was challenged! Well threatened!

Rusty has reacted, creatively again! And there is an obvious win win for DEC, its stakeholders and the SPV.

Some may say that with rates reducing it’s a sell out on the cheap. But then many thought HH gas prices would be at +4 by now!

This deal is reflective of DEC’s dna and seems to be a ‘win win’ according to the SP reaction.

Irrespective of the complexities the biggest plus imo is that the deal finalised because or debt and it’s repayment glidepath and profit spin off is attractive! And that’s what the 11 banks said all along!

For us a 12% reduction is huge! On top of the 23 run off!

Expect more of the same!

Usual caveats

Trek

“ This disposal to the SPV keeps DEC with a meaningful stake of 20% and also operatorship of the producing assets in Appalachia. In the transaction the company has reduced its debt and generated proceeds to the Company of approximately $200 million, comprised of an Asset Backed Securitization placed at the SPV and a sale of an 80% equity interest in the SPV for approximately $30 million.

This deal is a smart if slightly complicated structure but one which means that the proceeds will reduce net debt by some 12% and add to the general corporate purposes of the company. DEC continues to show appeal as it structures according to the market place, the management is very smart indeed. ”

https://www.malcysblog.com/2024/01/oil-price-dec-union-jack-europa/

Trek

Hi northfork,

You are correct.

https://ir.div.energy/dividend-tax-information

My apologies.

Got my dates mixed up!

Thank you

Trek

Hi Evi,

I have traded it loads but my trading objective has always been to be in touch with the SP nadir so that when it recovers I bag a big yield and have a nice cushion whilst maintaining as close as possible to my original bottom line.

I have sold a percentage on many of the bounces even for a few pence but this is a big move up and I would rather sit at 1025 now rather than work the margins any more.

It’s still 23.5% yield and with 2024 hedges in the money big time and pressure now on unhedged producers it still represents a huge opportunity imo. This SP which is well behind broker recs (for what they are worth!) could still have legs!

Like I have always said. An illustrative 20k in DEC at a 24% yield provides 6 times the ftse100 max yield!

https://www.dividenddata.co.uk/ftse-index-yield.py

So basically to get the same return you have to put in 120k into a ftse etf to get the same yield as Dec. But Dec is a single stock so higher risk but then you only invest 20k and have the rest in the building society getting an extra 5% yield!

So if the market crashes DEC and all stocks would crash but it’s actually a safer bet as most of your capital is in cash!

Whilst that’s not how I play it it shows that there are other creative ways to view a high yield stock like Dec that has a history of paying and increasing divi’s. Phnx is another. Similar principles!

But it really only helps if you get in near the bottom!

Usual caveats

Trek