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Small cap movers - Nighthawk Energy and Nostra Terra post big gains as tide turns for junior oilers

Small cap movers - Nighthawk Energy and Nostra Terra Oil & Gas post big gains as tide turns for junior oilers
Junior oil stocks stood out last week

Is the tide turning for junior oilers after a rough couple of years during which young ambitious firms have been hit hard by low crude prices and a dearth of investment?

Well, for two of AIM's strugglers the answer appears to be a resounding yes.

For US-focused duo Nighthawk Energy (LON:HAWK) and Nostra Terra Oil & Gas (LON:NTOG) were right up there with gains of 77% and 30% respectively.

The former’s performance was driven by news its leading shareholder, a Swedish property developer Johan Claesson, has increased his holding in the AIM-listed oil producer to 18.6% from 16.53% previously.

Directly and indirectly he holds more than half the business.

Stock popped..

Turning to Nostra Terra, its stock popped after it said it had negotiated a US$5mln lending facility carrying an interest rate of 4.75%.

Also among the risers was business-to-business software specialist Cloudbuy PLC (LON:CBUY), which was up almost 80% on the week with no immediate news flow.

However, before the Christmas break, the firm unveiled plans to shore up its shaky finances with a £3.4mln cash call, backed by long-term backer Roberto Sella.

A company looking at the AIM exit door was Lombard Risk Management (LON:LRM). For the banking software group received a 13p a share offer from Vermeg Group, valuing Lombard at just over £52mln.

Significant premium..

That was a significant premium to the prevailing share price, which unsurprisingly advanced on the back of the approach. The stock ended the week up 77%.

Looking at the wider market, the AIM All-Share barely registered a movement over the week (it was down 1.29 points at 1,066.27). The FTSE 100 was similarly listless, but at least it nudged into positive territory, rising 37.37 points over the five trading sessions to 7,780.76.

It has been another horrendous week for one of the junior market’s most innovative companies – a firm called Deltex Medical (LON:DEMG).

It has come up with a patient monitoring system that could help save the NHS tens of millions of pounds a year.

But it has fallen prey to the curse of the smaller company – the need for cash.

The last update from Deltex showed that while revenues for the year were £5.9mln, it still burned through £1.3mln last year. At December 31 it only had £200,000.

The cost base has now been adjusted so its overheads are met from operating cash flow. Still investors have been afflicted with a massive case of the jitters with the stock down 44% over the week.

Bottom fishing..

There was a bit of ‘bottom fishing’ for stock in TomCo Energy, the bombed out natural resources stock with the price up 13% Friday.

That put a stop to the tumble in value of TomCo (LON:TOM), which had subsided quite markedly in the previous four trading days to end the week down 30%.

The company has spent much of its time as a listed company attempting to develop an oil shale asset in Utah (with little success).

Recently it has pivoted and is now trying develop and commercialise a technology invented in the 1980s by the oil majors that processes oil shale deposits.

The only snag is TurboShale, the company TomCo set up to develop the breakthrough, requires significant funds – something in the order of £1.1mln. That had investors a little nervy and twitchy.

One to look out for in 2018 is the Mortgage Advice Bureau. Its last annual results marked the eighth successive year of 20% profit growth.

The company runs a 1,000 strong network of mortgage advisers.

Its asset-light, hugely cash generative model means it pays out a fairly hefty dividend too (it yields around 4%).

Okay, the shares were up over 60% in the last year – so you might ask whether it is too late to jump on board.

Well, it is worth noting that a shake-up is occurring in this part of the financial services industry, which is being driven by technology.

Being a first adopter of the latest advances, chief executive Peter Brodnicki reckons there’s plenty more scope for the company to grow.

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