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Frontera Resources, the great hope of the Bombed-Out but Bouncing Back portfolio

Last updated: 11:24 22 Mar 2017 GMT, First published: 11:43 21 Mar 2017 GMT

Energy meters

When I came to the City, all I had was the sack on my back, and now I am a millionaire!

What was in the sack?

Ten million pounds.

It’s an old gag, but that’s how I feel after just two weeks of tracking the inappropriately named “Bombed Out but Bouncing Back” (BOBBB) portfolio, which continues to live up to only half its name – the “bombed-out" bit.

You can get up to speed with the principles behind the investment strategy by reading Bombed out but bouncing back - a virtual portfolio of recovery stocks.

This way madness lies

You can see why I find actively trading a portfolio maddening by looking at one of the stocks our filter recommends buying this week.

Buy Snoozebox Holdings PLC (LON:ZZZ), the stock filter suggests, at a “bargain” 0.6p. The shares are up 10.5% over the last week and up 50% over the last month, so how could we possibly lose?

The only problem with this suggestion is that we sold Snoozebox last week at 0.4p, swallowing a 30% loss in the process, thanks to the wide bid/offer spread of 0.45p and 0.6p.

(Notice now that the portfolio is up and running - into the ground - this has become a collaborative affair, as evidence by the use of the "we" pronoun).

As for the stocks the filter recommends ditching, they've all been dumped at a loss - even one that was showing a handsome profit last week: PCG Entertainments PLC (LON:PCGE), which fell out of bed with a bump when it opted not to renew the contract of its chief executive, Nick Bryant.

Oh well; you can’t really blame the stock filter for this sort of unpredictable event.

Gone, gone, gone (cos you done me wrong)

We turn to the Everly Brothers for the inspiration of the title of this section, as we look at the stocks that were in the BOBBB portfolio but are now “gone, gone, gone”.

Agriterra Ltd (LON:AGTA): Sold 492,000 at 0.2p each. Raised £984. Gain/loss: -£30.

I am sorry to see these go, if only because I won’t get the chance to reuse the “pristine Agriterra” headline again. The shares were sold at the price at which they were bought, which means our virtual broker is the only winner, trousering £30 in dealing fees.

CMC Markets Plc (LON:CMCX): Sold 1,010 at 135p. Raised £1,348.50. Gain/loss: -£11.82

Out go shares in my former employer, the spread betting firm CMC. We bought at 133.2p, sold at 135p, but still lost money thanks to the dealing costs. How appropriate.

Devro PLC (LON:DVO): Sold 681 at 197p each. Raised £1,326.57. Gain/loss: -£33.41.

The sausage skins maker had a decent week but not enough to avoid being dumped or to make us any money. We avoided a profit by the skin of our sausage.

PCG Entertainments PLC (LON:PCGE): Sold 518,400 shares at 0.13p. Raised £658.92. Gain/loss: -£341.04.

This time last week we were sitting on a £187 paper profit. We exited with a £341 loss, after the online games firm said it is closing its London office.

Wolf Minerals PLC (LON:WLFE): Sold 23,380 shares at 4.5p each. Raised £1,037.10. Gain/loss: -£322.25.

We’re still waiting for our first trading profit; this isn’t it. Never mind “hungry like the wolf”, I am “angry like the wolf” (and it’s not even real money). The Devon-based tungsten miner might well be one for long term investment, but as a trading stock, it has proved a dud.

Licking the wounds

In the first week of running this virtual portfolio, seven trades were closed out with realised losses of £1,554.25 (22.2%).

In the second week we lobbed out five stocks for a loss of £738.52 (12.1%) so although things are not improving, they are not getting badly as quickly as they were.

How’s that for some tip-top straw clutching?

More lambs to the slaughter

Last week I drew some comfort from the fact that three survivors of the portfolio were at least showing good profits on paper, but two of those (Agriterra and PCG) were subsequently sold for a loss, so let us not get too carried away by the fact ECR Minerals is up 21.7% since we bought it and BOS Global is up 5.8%.

Both have seen some directors buying in the last three months, so maybe there is a moral there.

Were this a casino now, I don’t care how many free drinks and chicken wings they were plying me with, I’d cash in my chips and retire to bed, but the next 49 columns of this regular series would be rather dull were I to do that.

Besides, the experiment is proving my suspicion that week trading (the lazy person’s alternative to day trading) is not a viable activity, so here are this week’s punts … er … I mean carefully filtered stock selections.

BlueRock Diamonds PLC (LON:BRD)

A kiss on the hand might be quite continental, but diamonds are a girl’s best friend.

Yes, we’re reduced to taking investment advice from Marilyn Monroe.

BlueRock Diamonds reported last week its new crushing and screening plant at the Kareevlei  mine is now fully operational. Let’s hope the share price keeps crushing it.

Purchase:  25,100 shares at 5.25p each.

CSF Group PLC (LON:CSFG)

The filter chucked up this stock but as the company, a Malaysian data centres operator, is delisting from Aim soon, I am going to choose to ignore it.

Flowgroup PLC (LON:FLOW)

Shares in the combined heat and power boiler specialist surged today as it revealed it has identified a preferred bidder for the sale of its Flow Energy Limited.

I am a little wary of buying into a share that has seen such a big rise – up 57% - on a single day as the idea of the filter is to identify stocks that have been steadily rising, but apparently Flowgroup had been doing just that before today’s announcement, so it makes the cut, though the bid offer spread of 5.75/6.5p is fierce.

Purchase: 20,300 shares at 6.5p each.

Frontera Resources Corp (LON:FRR)

Not to be confused with the Frontera Energy that cost us a packet in the first week of this virtual portfolio experiment, the company is hosting a conference call at 5pm today to update investors and analysts. Let’s hope it is good news, or this could be the final Frontera purchase.

Update: The shares shot up 18% the day after we bought them; oh me of little faith. 

 

Purchase: 510,000 shares at 0.26p each.

Snoozebox Holdings PLC (LON:ZZZ)

It’s back above its 50-day moving average, so we move back in … reluctantly. The wide spread remains a killer and there has not been any news flow to explain the recent share price strength.

Purchase: 220,000 shares at 0.6p each

Scores on the doors

Company

No. of shares

Total cost

Average price paid

Current bid price

Current value

Profit/ loss £

Profit/ loss %

BOS Global

12,525

£1,361

10.87p

0.11

£1,378

+£16.31

+1.2%

Bluerock Diamonds

25,100

£1,333

5.31p

4.75p

£1,192

-£141

-11%

ECR Minerals

58,000

£1,001

1.73p

2.1p

£1,218

+£217

+22%

Flowgroup

20,300

£1,335

6.57p

5.75p

£1,167

-£167

-13%

Frontera Resources

510,000

£1,341

0.26p

0.24p

£1,224

-£117

-8.7%

Snoozebox

220,000

£1,335

0.61p

0.45p

£990

-£345

-26%

 

  • Cash: £1.54
  • Market value of current holdings: £7,169.25
  • Total value of original £10k portfolio: £7,170.79
  • Total dividends: 0
  • Profit/loss on closed trades: -£2,292.77
  • Unrealised profit on current holdings: -£536.44
  • Total profit/loss: -£2,829.21

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