Unwrapping the official Oak Bloke Top 20 Investment Ideas for 2024.
Let me begin with the readers’ ideas I chose.
IP Group which is also an OB holding and a British jewel. A +£1bn beast which invests in long-term Cleantech, Health and DeepTech ideas patiently and diligently. I’ve estimated the discount at near 70% and growing month by month. I believe the discount will close during 2024, and we will see some exciting realisations in all 3 of its sectors. The US have the magnificent 7, we have the magnificent 1. The difference being the 7 trade on a PE of 50. If IPO has a year in 2024 like it did in 2021 then it trades on a PE of 1.15. Interesting to note that Cathy Wood’s Ark Invest was up 72% in 2023.
Capital Georgia CGEO which is a former OB holding and a Georgian jewel. A near £1bn beast which invests in Georgia’s fast growing economy and holds the listed Bank of Georgia boasting spectacular ROE above 30%. I believe this holding in 2024 will be serving up meat and potatoes aplenty, and sits on a 53%-64% discount to NAV which I believe will close. Aggressive buy backs deliver something like a 5% returns, in 2024 it will potentially be, or nearly be debt free, and there is further potential for a sale or perhaps an IPO of its PE holdings in 2024 and potentially the introduction of a dividend.
Augmentum Fintech AUGM is a consistent star performer and I believe its NAV sits on an unjustified discount and is very conservatively valued with a superb Investment Manager in Tim Levene. After trading on a premium to its NAV for years, it sank to a heavy discount in 2023 which offers, I think, an exceptional opportunity. I believe 2024 will see further progress in its portfolio, and for fintech generally, and I’m very excited by what this stock will deliver.
Power Metals POW offers exceptional value at the close of 2023, and offers multiple upsides for an outsize return in 2024. The hidden value of its listed holdings, its Royalties, the planned IPOs, its 2024 drilling results and some recovery in commodity pricing as well as a thawing market with lower interest rates will drive POW higher. Perhaps much higher. The NAV doesn’t reflect the opportunity and the night is darkest before the dawn. 2023 has provided a ground floor opportunity to access a cornucopia of opportunity here. A lot of big words to say it’s cheap and I believe will be less cheap next year.
Fair Oak is also an OB holding offers a high income and diversified approach to access the collateralised loan obligation market with outsize returns. 2024 is not just about growth and value, but also receiving income too. In my mind, this is my stalwart plodder chugging dividends at me, and despite it dealing in “junk bonds”. I set out why I think this label is misleading, despite it being almost universally talked down. This is why it’s part of the OB Top 20 2024.
Pendragon is a car dealer in the throes of a partial take over by a US car dealer chain. Out of the ashes, remains its Pinewood business and this represents a truly exciting opportunity for its established and growing SaaS business I believe this opportunity has been completely overlooked by the market at the close of 2023 and will thrive in 2024. This is an idea I’m definitely buying into in 2024.
Petrotal is a high yield, high growth play operating in Peru. The Amazon Jungle is not the usual place to find an O&G firm, but this idea represents a high quality opportunity for 2024 with growing reserves, production and profitability. I speak to how you are paying 8.5p a share premium to its current NAV for what looks like seriously good value in 2024 and beyond, with a 10% high yield, buy backs, special dividends and growth.
TP ICAP is an inter-dealer trading platform and data provider in a wide array of global markets covering a wide array of financial products, commodities, fixed income and equities. It is also a high yield play, growing and with a significant discount to its worth, so representing a quality, growth and value play for 2024. TCAP deals in volatility and there’s been plenty of that. My analysis shows while there is a SOTP argument, the true value here I argue is the synergy of “data and trade” is powerful - combining its Fusion platform across its Data offerings, Brands, Products/Markets and regions - enabling value adds to buyers and sellers - like risk management, compliance and flexibility.
REA Holdings REA’s Preference Shares (RE.B) offer exceptional value at an astonishing discount to NAV. At first, I was sceptical about including this one. But this is an interesting share whose preference shares have a 11.4% base yield in 2024 (based on the ask price), with a 10% likely special dividend on top, which has struck a deal to a loss making plantation and 20% of another which reduces the debt pile. This could bounce from a 2023 H1 loss to a bumper PE of 1.2 in 2024. Wow!
Trident has dropped a third since I last looked at it a year ago. TRR offers a low risk return from mining royalties, and has fallen presumably in a Lithium backlash and its Thacker Pass royalty. The insanity is there are no producing lithium royalties in 2023 or 2024! Its borrowing costs have fallen and it starts 2024 with management buying shares and with gold on a tear and forecast profits doubling in both 2024 and 2025 this is a low risk way to play commodities, and when the OB has a couple of sizzling growth plays it helps to balance that with a plodder. Don’t feel plodding is inferior because if (and when) metals recover, royalty companies get the upside but avoid the many mining cost risks.
The Oak Bloke Value Ideas
Diversified Energy DEC probably needs no introduction to my readers. Being able to recommend this at sub £11 and 26% yield is a dream opportunity at the end of 2023. A stock picker’s fish in the barrel. Reader, I make no (fish) bones - this is my number 1 idea. As readers will know, I’ve scoured the accounts for and found hidden value in its undeveloped acreage in DEC-ember burn, I’ve analysed the current political methane probe, then dug deeper still, and satisfied myself it’s vexatious, I’ve run due diligence on its Asset Retirement Obligation, I’ve considered the current and future price of gas, I’ve considered buy backs and the impact, I’ve considered the sustainability of its dividend, I’ve considered read across valuations to peers like EQT and tackled the myths that seem to hold DEC back - the myth that it is “running out of resources”, and also explained the rather complicated hedging and how IFRS9 affects the accounts. In my opinion this is a (very, very) high yield defensive play for 2024.
Digital 9 holds the dubious honour of being the UK Investment Trust which dropped the most in 2023. It suffered a dividend cut, miscommunication, and danger of volcanic devastation. But the Oak Bloke, thinks the value here is exceptional for 2024. I analysed Arqiva and was astonished by what I found. In 2024 its sale of Verne completes, and the 70% discount closes. This is also a defensive play for 2024.
IX Net Zero also offers exceptional value at an astonishing near 90% discount to NAV. DEC and D9 had a hard fight in my mind whether this belongs at #3, not #1. Methanol for Shipping backed by BP, Warren Buffett and many others - and is the bulk of the hidden value. But in 2024 we will also see the Enphys SPAC play out and its other holdings progress. IX. is a growth play on ESG and the urgency of climate change makes this a holding which I believe will prosper.
Baker Steel is a different beast. The polar opposite. Investing in Cement, Gold and Coal and other mining opportunities. But, I argue, metallurgical coal for steel making is a necessity for now and is the baby thrown out with the thermal coal bathwater. BSRT caught the baby, got the coal mine financed and this will begin to earn colossal returns across its Coal, Gold and Cement holdings over the next few years. That’s before considering its utterly bombed out early stage stuff - and by early stage these are mostly post DFS - so just need cash. In 2024 I believe the market will recognise the value missed here and the prospective dividend yield will make this extremely attactive.
Agronomics is another play on the future. In my Part 1 article I speak to how we collectively eat too much meat and fish. Or too many people want to - and deserve to. What happens when the World wants to live like the West? So let’s make meat more humanely and 10x more efficiently. That’s the dream and increasingly the reality - and necessity - of Agronomics. Smarter food is a huge part of achieving net zero. In my part 2 article I show how it ends 2023 at a 50% discount which does not reflect the NAV progress in 2023. Blue Fin Tuna, Pet Food, Wagyu beef are some of the thin edges of the wedge where I believe why “ANIC will be ok, ok, ok Anic” in 2024.
Let’s move to my 5 growth ideas.
The Oak Bloke Growth Ideas
BELL is my first “sucker” stock. A real stinker according to Stockopedia. 80% down. Down but not out as I set out in DING DONG. There are $85m reasons why I believe this Tech Play will hugely prosper in 2024. The tech is proven and it’s world class. Some Medical Oxygen Therapy distributors are saying they will ONLY sell BELL. The commercials are in place, the funding is in place. China, Singapore, HK is now authorised. When that was announced last week the share price didn’t move a penny. This stock will look very different in 2024, I believe.
TEK is also a fallen growth play. Another sucker stock. It owns 9% of BELL. Owns 79% of Microsalt which IPOs in 2024 (or gets bought out?). Microsalt, I believe has a monster contract with Pepsi. Also owns Guident which is an autonomous vehicle “human in the loop” technology which is a key technology for autonomous vehicles. ReVive which prolongs EV batteries with 5-10 miles range through regenerative shock absorbers and commercialisation begins in 2024. It owns 40% of Nasdaq listed LUCY which has been in the wars in 2023 but has commercial agreements with Nautica/Reebok/Eddie Bauer beginning early 2024 and arguably have the best smart glasses in the world. A little David against three Goliaths of RayBan, Bose and Amazon. Any of whom could buy little David. TEK is at #7 in my list, but seven is my lucky number and I believe TEK could actually offer the largest percentage upside opportunity in 2024.
TMT is another hero to zero down over 70% in 2023. Yet with fast growing SAAS data storage BLZE and Uber-like transportation and delivery play, Bolt, as its 2 largest holdings, the value seems blindingly obvious to me. The VC talent running TMT is impressive too. I believe TMT offers a “no brainer” opportunity which offers exceptional value at the end of 2023. Interestingly this is not considered a sucker stock.
Kazera - KZG is another apparent sucker, but in my opinion sits on the cusp of 2024 greatness with Heavy Mineral Sands, Diamonds, royalties and a mine sale completion. Beaten down to 0.5p it jumped 20% in the past day or so so I’m recommending it at 0.6p. 29.9% of the company was sold to a HMS expert this month at 2.5X that price. The despair for KZG in 2023 seems palpable but I believe 2024 will be very different indeed. Whether Kazera Sosei is a fanciful, figment of OB’ imagination or not it really doesn’t matter. I believe KZG will greatly prosper in 2024.
Saietta is my final growth play (and final sucker stock). We’ll see. World class technology as Renault’s Papa and Nicole would attest, with commercials in place, cash (partly) in place, and a partnership in the USA and a JV in India which will propel SED to greatness. It’s true that SED lost its way in 2023, and new management had to make some tough choices to cull overcommitments to different programmes. The cull is a reflection of their management quality and those opportunities are largely deferred rather than lost. Focus on its India JV and the singular problem of Urban pollution shortening peoples’ lives by 12 years will be the making of Saietta. Its progress and now its $366m contracts pipeline is nowhere in the price. I believe the share price at the end of 2023 offers exceptional value.
So there we have it reader. I hope you find the list entertaining and interesting for your own further research. In one year either the Oak Bloke will revel in the kudos of having anticipated great gains in 2024 - or he won’t. This is ultimately me writing about my own portfolio (other than some of my readers’ ideas) and writing helps me set out the rationale, the investment case and the intrinsic value so I believe helps make me a better investor. I also use my writing to occasionally ask for support for causes - like this Christmas for the Salvos - or a local equivalent Charity if you prefer.
IMPORTANT:
I will be updating this page over coming days so if you are reading this in your email consider visiting the web site if you want to see the article evolve. By the way I evolve many of my articles, particularly to update and correct inaccuracies (my DEC dividend calculation whoopsie was a great example), but also as further thoughts occur to me or I think oh, I should have worded that bit better. As I said, I write to set out my own rationale. That rationale sometimes evolves.
Why I didn’t pick them
The hardest part of this exercise was selecting 10 of my best ideas. Because I now have a lot of “11th best” ideas. They deserve a bit of airtime too. I’ll be writing about those and why I didn’t pick ‘em, and I’ll try to do the same with readers ideas too.
Happy Christmas to you all,
Oak
PS this is not advice, if you need advice, well you’ll need to wait until you can speak to an advisor. It’s Christmas Day - very unlikely you’ll find one today. My advice is stop reading your phone and get back to your family and friends - Christmas only comes once a year. Make the most of it.
Thanks for your hard work in 2023. Great newsletter and much appreciated! 👏
Thank you for your writings. I hold about half of what you have. You mention your website. What is the address, please? The obvious one leads me to a woodworker in Melksham...:)