No doubt if you’re in an office in quasi-London Sydney, it’s been a long week, filled with at least three mornings of someone talking about their “football” team making a European final.
As if the election hadn’t made daily life dull enough. We even voted in a Kiwi as our most trusted politician.
Basically, the weekend couldn’t come fast enough, but here it is.
And here’s all the stories you liked most on Stockhead this week. It’s a trippy mix of shrooms, swindlers, miracle cures and sweet, sweet oil.
Kick back, and jump in.
1 – S&P confirms – the world is struggling to find more copper
Armageddon #1 – The level of funding spent on copper exploration over the past decade has increased significantly. The problem is, it’s not turning up any new discoveries.
From 1990 to 2008, $US14.5 billion was spent on searching for copper. In the past 10 years, that’s ramped up to $US25.8 billion. Sad result:
These are the ASX small caps trying to keep the dwindling stockpiles topped up.
2 – High Voltage: Wesfarmers pounces on Kidman. Who’s next?
Big news in takeovers was big.
$40b conglomerate Wesfarmers (ASX:WES) made a $776m play for Kidman Resources (ASX:KDR) – a 47 per cent premium to the previous day’s closing price.
Cue rocket for battery metals market, and no surprise to see lithium dominating the sector’s small cap top 40:
Here’s who else might be in the takeover sights.
3 – An oil price ‘Armageddon’ could hit in January – and these ASX small caps are braced for impact
Armageddon #2 – oil.
And we didn’t even have to insert “armageddon” into the story just so we could use a Bruce Willis pic.
MIT economist Philip Verleger said it in a paper last year when describing “an economic crash of horrible proportions in 2020”.
He was talking about the potential price of oil. A 2016 ruling that shipping companies must switch from cheap, heavy crudes to fuel that has less than 0.5 per cent sulphur comes into play on January 1.
From then on, the entire global maritime industry must use fuel made from a type of oil known as ‘light sweet crude’.
Best fact: It’s ‘sweet’ because it has a pleasant smell and a mildly sweet taste.
Stockhead found 19 ASX companies with operations in the midwest and Gulf regions of the US — the areas where light sweet crude is found.
4 – Director Trades: This is how you make money from small caps
If you’re struggling to make money from small caps… you’re probably not reading Stockhead enough.
Ha.
But actually, there’s another option – become the boss of a struggling small cap, and plump for options as part of your startup package.
We reported last week how Mike Ververka, the boss of online lottery company Jumbo Interactive, took 250,000 options at $3.50 each and sold 185,084 at $16.60 each – the price he’s grown the company to. He made $3.1m on that trade, and over his past eight trades has made $17.7m profit, at a cost of $6.3m.
Tidy. Here are last week’s other big moves in director trading.
5 – Six Chinese stocks have made double-digit returns in 12 months
Spade, you’re a spade — China is a risky place to set up shop.
Take Orcoda (ASX:ODA) for example. It’s been trying to extract $4.1m worth of trade debt out of China Mobile, and took them to court last year. In January a Nanjing court ruled in favour of the state-owned China Mobile not having to pay, and today Orcoda lost its appeal. Ouch.
But Chinese companies listing on the ASX are a different kettle of fish. Last month fintech smallcap Fintech Chain (ASX:FTC) went from nonentity to a 500 per cent share return after scoring an official green light from the People’s Bank of China to collect micro-revenues from transactions.
Yes, there have been plenty of flameouts in the Chinese-owned ASX stock space. But small caps like Fintech Chain are leading this new wave of success stories that have delivered double-digit returns in 12 months.
6 – Tech: Fastbricks has a 10 house target for its first robot run this year
Finally, the robot bricklayer struck a deal.
A JV with building products seller Brickworks (ASX:BKW) had Fastbricks (ASX: FBR) fans hi-fiving, sending FBR up 35 per cent in Monday morning trade.
The JV solidifies Fastbricks’ attempts to make “Wall as a Service” a thing, which is now looking kind of admirable.
Director of construction technologies Simon Amos told Stockhead a pilot where they test the Brickworks blocks will run for the next two to four weeks, and they’re in talks with Western Australian builders now to build the initial 10 houses.
After two years of YouTubes getting investors and brickies excited and flustered in equal measures, FBR reckons its first real work on actual building sites will be under way by the end of July.
7 – Money Talks: Uranium has good ‘tailwind fundamentals’ and could be set to ignite
Our expert tips are humming along just nicely, thank you.
This week’s most popular came from Arun Sengupta, executive director at Canary Capital. Sector? Uranium.
Sengupta reckons the case for uranium is strong, especially when you factor in there are 55 nuclear power reactors under construction and another 150 on the cards.
Producers, not so much. Ten years ago, there were around 450 worldwide. Now, there are 40 – and those new plants don’t run themselves.
Here are the uranium stocks Sengupta likes, and we also tapped MineLife founder Gavin Wendt for his top gold, coal and lithium picks.
8 – Patients are saying Orthocell has fixed their damaged nerves, shares go ballistic
Everyone loves a good trial result, and Orthocell nailed one on Wednesday.
Early data from the company’s Phase III trial on patients with damaged nerves showed that patients regained sensation and muscle function in affected limbs, and reported an 83 per cent improvement in muscle power.
Boom. OCC shares went to the moon:
“I’m living a normal life now. I can pick up my kids and I even swam a duo to Rottnest! I might even be able to play footy again next year – something that I thought would never happen.”
Moira would be proud.
9 – It’s now looking more like hydrogen may actually give battery electric cars a run for their money
Mass-produced cars that run efficiently on hydrogen feel a long way off, but readers still can’t seem to get enough detail on how that’s all going to roll out.
Maybe it’s because lithium ran out of puff last year. Or maybe it’s because research such as this from the University of Waterloo in Canada just keeps arriving.
The team reckons it has developed a new fuel cell that lasts at least 10 times longer than current technology, an improvement that would make them economically practical, if mass-produced, to power vehicles with electricity.
There aren’t a lot of ASX small caps into hydrogen right now. Just this one, in fact.
But that seems destined to change — mainly because people clearly want it to.
10 – Denver just decriminalised magic shrooms; is it only a matter of time before ASX biotechs start tripping too?
You lot were tripping too, over each other to read about the US city of Denver choosing to decriminalise psilocybin, the active ingredient in magic mushrooms.
Everyone’s looking for the new wave of pot stocks, but there actually is some proper science behind the treatment benefits of psilocybin.
There are positive signs for smoking and alcohol addiction, psychological disorders, and cancer-related depression. And methylenedioxymethamphetamine, more commonly known as MDMA or Ecstasy, is also showing promise.
There are sceptics, however, including Medlab Clinical boss Sean Hall. He’s more Team Cocaine when it comes to that sort of thing.
See you Monday.