As a timely reminder that short selling is not all plain sailing right now, I have been somewhat inconvenienced by the sharp rise in the shares of APR Energy (APR) on the news that 18% shareholder Fairfax Financial along with 11% owner Albright Capital Management and an entity named ACON Investments may make an offer.
If you want me to analyse a stock for you just drop me a line at sqmir@hotmail.com - Today I look at shares of APR Energy (APR), Gulf Keystone (GKP), Oxus Gold (OXS) and offer some share price targets.
It is always worth looking at the small print, the notes at the back of an annual report. The following gem appears in the (unaudited) interim statement prepared by APR Energy’s (APR) auditors, Deloitte, stating that:
I wrote about APR Energy (APR) two weeks ago after the shares had crashed from 360p to around 200p on a terrible trading statement and warned of the dangers of bottom fishing.
When a share price collapses it is often tempting to go bottom fishing on the basis that the fall is overdone. Some people use this as an investment strategy: look for the biggest fallers of the day and buy them: hoping that the bigger the fall, the bigger the bounce will be. Sometimes this works but it’s usually down to luck rather than judgement and more often than not ends in tears.
It may be interesting to note that despite the threats and uncertainties affecting the stock market as a whole, such as Greece, a bond market collapse and of course, thin summer conditions, it is still relatively difficult to find genuinely bearish situations at the drop of a hat. However one such situation does appear to be APR Energy (APR).
My name is Chris, I am an experienced investor with years of successful institutional and personal investing behind m,e but I would like to confess guilty to the charge that I have made a bad call. I accept that the Sheriff of AIM in a rare cross-jurisdictional move into the Main Market is correct in his judgements in his generous oral testimony here.
If you spot attractive investment themes early enough then profits should follow. Much more of a challenges is working out what to do when a good structural theme has tactical challenges. Take the temporary power world. Demand by the emerging world for power far outstrips the ability of central governments to provide it and so temporary power providers like Aggreko (AGK) and APR Energy (APR) have a ready market for their services even before you consider opportunities at major sporting events or music festivals. Over the last few years both have cleaned up and today stand proudly as key players in the global industry.
Who remembers back in October, when the temporary power company APR Energy (APR) acquired the General Electric (GE) turbine rental business for US$314m, largely funded by the issue of new APR Energy shares to GE (who become their largest shareholder at c. 15.5% of the company)? That transaction helped spike APR Energy shares to over 1100p. Since then the stock has returned to 816p and this could be a buying opportunity.
