Hello reader,
I have one article left to write before the end of 2023. It will be my 93rd article and that’s since I began writing in August 2023. Wow, that’s a lot of articles. A lot of ideas. A lot of thinking.
I am rapidly heading towards 500 active readers and that number grows daily. Thank you, reader, for referring my work on to other people.
This list “the escape list” is a list of stocks I’ve written about in 2023 and that I considered for my Top 10 (of the 20). In fact, apart from the 10 reader ideas, and the 1 article about why I didn’t pick all their ideas, plus a few general articles about investing, there’s around 75-80 articles you can read about the list below. I will reference some of these 80 articles as I speak about the escapees, but you can visit the archive to read (or re-read) them too. If you wish.
Let’s talk about them exactly as they are listed.
Jubilee. JLP was a tough one to exclude. The modular approach, the low costs being achieved, the USP, the announcement of a JV with IRH for a 350MT waste dump with 1.5% copper - there’s lots of reasons to feel positive about JLP’s future. It’s faced bombed out PGM prices in 2023 and prospered via Chrome instead. My forecasts for JLP is that its share price will revert in 2024. Perhaps I will kick myself leaving it off the list. Definite a close contender. But in a KZG vs JLP smackdown I felt KZG held the edge, just.
NSCI is another. Lots of exciting tech plays. Its biggest holding PDS progressing to Phase 3 trials with a technology not dissimilar to Avacta to fight cancer, but without the 2X price appreciation. Lots of other holdings which should do well in 2024 but the “15% carry” via EMV could make this one double bag based on the sale of one of its holdings in a day. This was a smackdown against TMT and TEK - and one of the three had to be excluded.
KDNC ended the year jumping a little after a long decline in price. Lithium had a kicking in 2023, will it recover in 2024? Its Amapa iron ore mine via its new partner TCIDR should proceed with its DFS and FID during 2024. Its other holdings are proceeding with their mine development too. Its holding EMH dropped by a 1/5 on a delay of its DFS into Q1 2024 which I thought was weird. This was a BSRT vs KDNC smackdown and the near term income streams of BSRT tipped it to be included at KDNC’s cost. A strong 2025 candidate.
ATM was another strong candidate for the list. It is moving towards polymetal production (Li and Ta in addition to Sn), and successfully raised finance in 2023. It should finalise and announce a Lithium offtake agreement in 2024, as well as its Tin Phase 2 expansion. It has the distinct advantage of being a producing mine with cash generation. Whilst it has a strong future upside target price, I felt 2024 may not be the year for ATM in my list. If Tin prices return to their recent past highs I may rue that comment!
VLG is another overlooked value play I’ll be writing more about next year. One upside I hoped to see in 2023 was Chinese sales. These do not appear to have materialised. Nevertheless I continue to hold VLG and expect I see progress in 2024 - more than other analysts believe - but it doesn’t offer the same level of upside as the 5 value holdings I chose. After a year on consolidation and paying down debt will we see a further purchase in 2024? Or will VLG itself get snapped up for its defensive and cash generative assets?
BMN
BMN was also a tricky one to exclude at 2p with a target of at least 5p and, exactly as the OB believed, all the uncertainty of funding has been resolved and with quality management making all the right moves (actions do speak louder than words), doing deals to maximise value, building resilience, greater capacity and driving down per tonne costs. I believe BMN will do extremely well in 2024. My research indicates the vanadium market will move to deficit in 2024, although the question mark around the strength of Chinese economy leaves the timing open. If BMN doesn’t shoot the lights out in terms of share price in 2024 then this is a very strong candidate for 2025.
MKA is another which could easily have made the top 10. I agonised over MKA as it could provide a lot of upside in 2024. The news that China is restricting REE is music to MKA’s ears and the share didn’t move on the news (incredibly). Will the market wake up in 2024 as its Maginito recycling comes on line in Germany and progresses in the US (supported by the IRA and probably in 2024 by the Defense Act). All that before you consider Songwe and the MDA it was “assured” in 2023. Will it happen in 2024?
i3 against DEC stood no chance. But I do think i3 is ridiculously priced. In my i-i-i article there’s clearly upside and it will do well in 2024 and beyond.
Supreme is another really strong, supple holding. Quality management, who’ve pulled off some superb deals in 2023. The share price doesn’t reflect their achievement - particularly as the record profit is despite a crisis in customers’ overstocking Lighting, in the threat of legislation against vaping, a supply chain crisis and high inflation - where you are moving location too. Imagine what they can do in a less crisis-ridden year?! I believe we will see a build out of its health and wellness products in 2024. This was a strong candidate for the 2024 list and will be one for the 2025 list.
RGL nearly made the cut. Only 1 of my 10 ideas for 2024 pays a dividend (DEC) and I thought long over including a 2nd one, and this was a leading contender with a very tasty dividend and large discount to NAV where the NAV itself has been beaten to the upside on realisations in 2023! In the end, I based it on anticipated share price growth and while RGL will continue to do well, it may just be a steady performer in 2024 with steady progress on voids and some realisations just like in Q3.
GROW remains at a huge discount and again nearly was included. I notice similar holdings like OCI, USA, SMT already are all up 20%-30% at the end of 2023. I’m sure GROW will do really well also. Also because I’m very positive about the FWD acquisition/merger. Against TMT and TEK I had to exclude one, so that was GROW.
VSL also has decent upside but is in wind down in 2024 so will generate a nice low risk return through dividends and capital returns but from a percentage price point of view it will decrease following capital returns so could never be a top 10 idea for practical reasons. But like CHRY below there might be a wee fox!
CHRY was another great candidate especially given the news in December that a prospective sale may occur in Q1. It might be WeFox or it might be Starling but this made CHRY very attractive for 2024. Against TEK and TMT I chose the latter but this one might end 2024 as ahead as it contains a number of potential IPO candidates still at a silly discount.
HOC
HOC ends the year up a bit from its 2023 lows. Gold prices in 2024 are looking tasty and the AISC of its new mine as well as how it will drive down costs at its existing mines now it has the environmental permits makes this a strong contender. But HOC is already quite a big company (it rejoins the FTSE250 in 2024) so do elephants gallop? With Mara Rosa coming on stream in 2024 I discuss in HOC on the block how it looks ready to have a good trot!
CTL
CTL has had a tough year with its Lithium story. Extracting lithium from brine using a filter technology called DLE. In Cattle CTL I set out the rationale earlier this year. I think CTL has every right to be in the OB top 10 but given lithium isn’t sure to recover in price in 2024 I decided to strike this one from the list.
ORCA
ORCA ends 2023 as a 5 bagger if you bought at the lows. I decided to buy a little back when there was talk on no more north sea oil, ever, ever, honest guv. Yeah right. And just like in Lord of the Rings “meat’s back on the menu boys!”. Not a surprise. Could ORCA go another 5 in 2024? Yes it could. I discuss this in Orca in the North Sea. The trouble with ORCA is it’s quite high risk. I do find its CEO very credible - and oil which has been produced with the smallest carbon footprint is very appealing - and was appealing to the NSTA also.
TENT
TENT is another mystery dropper in 2023. Yes interest rates and discount rates, and a touch of back luck with break downs, but come on! This stuff is very low risk and very thematic. Show me how else to buy hyroelectrical base power assets in the UK stock market (I believe HEIT may has 8% of assets as hydro) and sell power at £100/MWH rising with RPI. Now there is talk of a proposed realisation of assets. I’ll certainly be voting against such a move as will I believe many of my readers…. and it’s a strange development. It didn’t make the list due to this question mark.
LINV
LINV has had a 2023 battering. A technology play on Housing and specifically buy to lets and specialist mortgages. It ends 2023 licking its wounds on a profit warning. The investment case remains however, and the deleveraging whilst painful in 2023, leaves it with much less risk going forwards. A queue of lenders have stepped in to provide loans and mortgages, or to buy up an established mortgage book. LINV’s value is its technology and this could be another one to surprise in 2024 and a possible regret to not include being on my list.
AA4
AA4 after covering Amedeo earlier this year do I believe Amedeo will do well in 2024. Yes, the case is still intact. Will it shoot the lights out? No it’s a steady eddie but further news on A380 residuals in 2024 could be strongly supportive and provide some nice further gains. Meanwhile it generates a nice dividend and will continue to do so for at least several years to come.
INOV
INOV - ah my let’s talk about pain article. It began at 15p it ends at 15p. Its NAV has closed during the year - far more than GROW or TMT for example. Its NAV has steadily declined. Will 2024 be a positive year? I do believe at some point it may shine. I’m positive about the future of ONT (Oxford Nanopore) as I set out in my IP Group article. I believe Schroders are working hard to turn this one around too. So who knows maybe 2024 will be its year. Reaction engines is a very interesting holding for both its military use and space travel where its engine can morph between being a jet and a rocket. But of all the 11th places this one was probably a 12th place. The easiest one to exclude from a top 10 for 2024.
Feedback
As with my other article on readers ideas, please do comment below on what you consider were the ones that got away, and why.
That’s all folks!
Well that’s all from the Oak Bloke for 2023.
Next year I’ll be closely following my 20 ideas for 2024 (and remember reader this may be tweaking existing articles as well as writing new articles so do bear this in mind), also covering progress in my 20 escapees (aka I’ll be suffering pundit’s remorse!) and introducing new ideas too. I’d like to do more comparison and “smackdowns” as I call them in 2024. It’s a very useful way to battle test an investment idea, to consider why X and not Y. Like a Top Trumps for investment ideas. I’m toying with the idea of vodcasts and podcasts too.
The coming week will be busy for me, so transmissions will resume in a week.
As ever, this article is not advice.
Finally, may I wish all my readers a very happy, healthy and prosperous 2024.
Oak
Great article. I favoured GROW purely on the basics of the top 5-6 monster sized businesses of which it owns a stake. Also my son works for one of the portfolio companies (not mentioned in your blogs) flying below the radar which IMO is a 🦄 in the making....
Oakstanding idea generation - thank you for all your output and more power to your elbow in 2024