Springhill's Low Cap, Low Liquidity Stocks

[springhill]

Hi all, just seeing if there would be any interest in a thread like this.
My style is mainly low liquidity plays, for some reason they fascinate me.
I am a nobody really with no claim to fame, but I like to contribute to ASF and for better or worse will put my neck on the line and keep a record of anything I think looks prospectively good (IMO of course) and how they progress over time.
Of course this takes time and effort, so if anyone cares let me know. On here or via PM is fine. If not, then this post was 2 minutes of my life i'll never get back.

[Knobby22]

Love the idea Springhill.
I also have a fascination with them.
If you get them right, they can really reward and you don't have the high frequency traders distorting moves.
Please continue. I will see if I can come up with a good company also.

[trillionaire#1]

I think cuttlefish had similar thoughts many years back(messing about with low liquidity stocks)
his concern was these stocks tended to invite dodgy traders moving the SP around and outsmarting plain jane investors.

[trillionaire#1]

XXL comes to mind,countless other micro stocks you could play with the SP if you were so desiring.

[Vesupria]

Would be interested in finding any low-cap gems, profits, cash flow, dividends, reasonable profitability obviously being a caveat to me. Would this be a thread in the style of Robusta's where you start with "X" amount of capital (or even an established portfolio) and keep track of the results?

[burglar]

... If not, then this post was 2 minutes of my life i'll never get back.

How do you value 2 minutes in the sunshine?
A fruit grower will know better than most.

I am having trouble keeping up with the pace.
Reading a post or 25, maybe part of a thread ...
Forming an opinion, replying to a post ...


Yes! You have my attention!

[So_Cynical]

I hold and follow quite a few low liquidity stocks, SND and GLB would qualify as low liquidity and CTN and CLV are slightly larger liquidity and all stocks i hold..how do we define "low liquidity"?

[CanOz]

I hold and follow quite a few low liquidity stocks, SND and GLB would qualify as low liquidity and CTN and CLV are slightly larger liquidity

You seem to have already defined your definition of Low Liquidity....

how do we define "low liquidity"?

Perhaps you should be asking what do others or the OP consider Low Liq.?

To me i think it needs to fit a purpose...which is?


CanOz

[barney]

will put my neck on the line and keep a record of anything I think looks prospectively good (IMO of course) and how they progress over time.

Of course this takes time and effort, so if anyone cares let me know.

Always interested in what you have to say Spring, so fire away

I also like to read between the lines of the Spec plays ... last few months have been a shocker unfortunately, but one I'm still interested in is RIE if you want to cast your eye over it ........ Also, dare I admit I have been accumulating PEN again recently ..... Now that the PENOA options are done and dusted I expect this to fast track back to 4 cents+ ... but I could be wrong (ps. Maybe PEN is not considered low liquidity, but at this stage it's still a Spec)

[springhill]

OK, I think this is worth proceeding with.
Firstly, thank you all for the comments, sincerely. I cannot multi quote and address each comment specifically as the system won't let me do that. I will try to cover what I can in my outline.

This is all in MY OPINION ONLY, I can't stress that enough.
I am not a guru, an expert, a know-all, a raging success, I don't have delusions of grandeur, I am a fruit grower who happens to have a limited amount of time and a passion for sifting through the chaff to find something that suits my style. For better, or worse. The quest to make a better life for myself, my new wife and future family (hopefully) is what drives me, plus it can get lonely in the orchard, it also keeps my mind active!
Enough of the indulgences.

Low liquidity plays can be a very dangerous strategy. If you pick the wrong stock you can be left holding the can, with no buyers anywhere near the price you paid. Get it right and you can be rewarded handsomely as the short supply can create demand exceeding the real value of the stock. Pick the right stock at the wrong time and the result can still be a loss making exercise.
My interpretation of LLP's (low liquidity plays, remember that cos it's a pain in the @ss to type), is not for short term trading. Sometimes it pans out that way, mostly it requires belief and faith in your research and the ability to ignore short term fluctuations. The targets are the under-researched and the undiscovered.

Most of the stocks I cover will be mining based, as I feel I can interpret them better. SC, thank you for your codes, they are not in areas I can fully relate to and cross reference, so I would prefer to stay away from them for now.

Vespuria, i won't be running this as a set capital set-up. I don't think it is in the best interests of the thread to 'trade out' and forget a stock when it rises to '$X'. I feel using a percentage gain/loss system where profits/losses are left to run will be more helpful, as the full view of the potential gain/loss will be seen over time, highlighting how LLP's can excite or burn you over the period of coverage.

I don't have the luxury of picking a price for each stock i would like to buy them at, as each one may/may not sink that low. This is a real time exercise. All stocks will be started at the exact price at the point I identify them.
Starting price will be recorded each time, as well as a high/low price from that point. This will identify the potential loss/gain on each stock, regardless of whether someone could/should/would have entered or exited earlier.

Ideally my preference is to have a max of 200m shares on issue. I prefer lower amounts than that, but I am ruling out too many money making/losing opportunities if i narrow my view to 1-2% of listed stocks.
The other criteria I use to sort the stocks include cash position, market cap, visual graphs, management, past results and areas of high probability of successful drill results.
I will sometimes bend the criteria a little if the stock ticks most other boxes.

All stocks posted will have why I have selected them

[oddson]

Hi Springhill,

I really enjoy these type of threads. They are an excellent way to learn about making money on the stockmarket and they provide great entertainment! It fascinates me reading other peoples reaction to their investment decisions over different timeframes when taking into account the current share price/company peformance.

This thread has great potential. Best of luck.

Cheers

Oddson.

[CanOz]

Springhill, I'm quite happy to throw up some chart analysis on your stocks in focus if you like. They may have to be weekly, which is fine.

Also, I think you are looking for low market cap, tightly held stocks? The low liquidity is more of symptom of the stocks supply, as you said. Do I understand this correctly?

Cheers,


CanOz

[springhill]

Springhill, I'm quite happy to throw up some chart analysis on your stocks in focus if you like. They may have to be weekly, which is fine.

Also, I think you are looking for low market cap, tightly held stocks? The low liquidity is more of symptom of the stocks supply, as you said. Do I understand this correctly?

Cheers,


CanOz

That is fine with me CanOz. My view is mid-long term, so a shorter term perspective would be great. Sometimes the shorter term lack of action can be quite boring, sometimes not. Any effort is appreciated.

Low cap, tightly held is a great way of explaining it. That is what I was trying to get across, but it was 2am by the time I finished prepping the stocks I will be introducing. So clarity factor may have been low!

[So_Cynical]

LLP's in my experience are just like HLP's except that the positives and negatives are accentuated (magnified) i suppose due to the incredibly low levels of buyers and sellers...when a large seller does come along the SP can fall spectacularly simply based on the fact that someone is selling, and the flip side of that is someone buying and taking out all the sellers and thus driving up the price.

Someone buying or selling only a couple of 100K (or less) of stock can really move the SP without any announcements or fundamental changes to the stock...and then when fundamental changes do come along they can also have a magnified influence over the share price both positive and negative.

I've noticed that in the current market long periods of no news often results in price declines because its somehow seen as a negative....in general i don't like resource LLP's because they tend to not have any money and seem to be good at spending it looking for stuff...how ever i will follow this thread with interest.

[burglar]

Interested to see how this unfolds.

I often find with my pennydread picks ...
I know they will go!!
I just don't know when.


So I'm waiting to see if there is
something in your plan that suits me.

[springhill]

The first batch of stocks I have selected are as follows (upon further research I will add more in the future if they suit).

HDG - HODGES RESOURCES, 14.5c @ 1/7/12
FPO shares - 78m
Cash - $1.7m
Top 20 hold 54%
Nathan McMahon consistently buying on market
Moruple Sth 2.3b JORC inferred, with 1.2B potential open cut
Moiyabana exploration target 1.4-1.65Bt JORC due Q3 2012

A big resource for a small market cap, with low cost development. Director has invested in this like no other i have seen. Have ridden this before from 12c to 35c+. I believe it will happen again.

RAD - RADAR IRON, 27.5c @ 1/7/12
FPO shares - 71m
Cash - $3.9m, including a recent raising at 22% above market price.
Top 20 hold 51%
Targeting 5.8Bt Iron Ore (500Mt DSO hematite, 5.3Bt mag)

Massive exploration target, cap raising went at a premium - in this market hard to do, spin off from TRH (common directors) which was another LLP that went from 15c to $1.40+ before being taken out at 85c. RAD one of my favourites.

WAC - WILD ACRE METALS, 12.5c 1/7/12
FPO shares - 39m
Cash - $650k
Just picked up 3 ready to drill projects in Peru
Promising rock chip samples at Sambalay

Very little known about WAC and rarely traded, cash position is lower than I would like, but a cap raising will still see this well within the bounds of LLPs. A smokey.

SOC - SOVEREIGN GOLD, 28c @ 1/7/12
FPO shares - 77m
Cash - $200k, but just secured $4m funding to drill NSW projects
Martins Shaft, Frasers Find and Melvaines Mine could all be A-grade targets.

Excellent projects for the high risk/high reward tolerant, grades turned up so far are quality and quite shallow, shown to be good cost minimisers - purchase of own drill rig to keep costs of exploration down.

NCO - NAMIBIAN COPPER, 14.5c (suspended atm) @ 1/7/12
FPO shares - 73.8m (50m escrowed)
Cash - $620k
Top 20 hold 71%
Have 2 good quality projects, Ongombo and Hambok

Ongombo is JORC compliant and they acquired Hambok for no cash upfront ($7.5m on commencement of mining) and just 50m shares. Cash position is thin at the moment, but Eritrean Govt has signalled interest in NCO's projects in that country, upon finalisation of terms NCO can then proceed with their cap raising. Potential for increases on both projects plus gold in Eritrea.

NGY - NUENERGY GAS, 7c @ 1/7/12
FPO shares - 200m
Cash - $7.5m
Top 3 hold 35%, with one director holding 15%
Potential for 4.43Tcf gas attributable to NGY in Sumatra

Large gas potential in Sumatra, plus work due to commence in Tanzania in the second half of this year for a MC of only $14m with half of that value in cash, make this an agreeable play in my eyes. Will not need to dip into the market for more funds for a while.

CQC - CUESTA COAL, 9.6c @ 1/7/12
FPO shares - 191m
Cash - $20.9m
Top shareholder holds 36.5%, top 20 hold 79%

Alot of resource upside for this cashed up LLP, 56.3Mt JORC inferred and alot of funding available to increase that. In the reputable Gallilee Basin.

HFR - HIGHFIELD RESOURCES, 19c @ 1/7/12
FPO shares - 44m (+50m upon approval)
Cash - $3.6m
Prospective potash areas in WA and Spain

I am bullish on anything to do with food production. Acquiring a Spanish project (subject to due diligence) for 50m shares (plus 2 x 50m issue performance bonus entitlements). Area was producing 200k tons of potash when it closed in 1997 when potash prices were $110/t, they are now 470/t. Acceptance of deal by shareholders should see positive movement, rejection may see SP weakness.

PKR - PARKER RESOURCES, 25c @ 1/7/12
FPO shares - 18m
Cash - $2.9m

PKR a pure speculation stock, has cash to explore for uranium in NT, i guess if you're looking for uranium the NT is as good a place as any. Has common interest (Jay Stephenson) with NCO. Nothing special to attract or repel me from this, just an all out speculator.

RIE - RIEDEL RESOURCES, 8c @ 1/7/12 Thankyou to Barney for this one.
FPO shares - 58m
Cash - $1.5m
Top 20 hold 70%

Recent director buying, fantastic rock chip samples from Tagou make this worth keeping an eye on. Working away in Burkina Faso which seems to be a hot bed of activity lately, have come across a few specs moving into that area. Speculation on any drill results should lift SP, that is if this can catch the eye of the masses first.

[springhill]

I will be adding Rand Mining to the list.

RND - RAND MINING, 39c @ 1/7/12
FPO shares - 60m
Cash - $1.6m
A little cash poor, but stockpile rich.

Very thinly traded, but with an approx market cap of $25m and an increasing store of gold at Perth Mint. Plus 1.5+ cash in hand, this looks to be an underrated company making coin working hand in hand with TBR. Production costs in the $400-500 range. Only moves a few cents on extremely low volume from the times of my observation.

[springhill]

Chesser Resources on the list

CHZ - CHESSER RESOURCES, 32.5c @ 2/7/12
FPO shares - 148m
Cash - $9m, with another $1.5m subject shareholder approval
JORC Inferred 5.9mT @ 2.4 g/t gold for 462,000 oz – likely to be open‐pittable

Macquarie just became substantial holder during cap raising, another substantial holder also lifted stake. 2 directors want to be in on cap raise. Targeting gold in Turkey. Nice, shallow grades. Issuing of more shares unlikely for quite a while.

[burglar]

So where do you get numbers such as "shares held"?
Is it from a company website?
Or a list for all companies?
(like I used to have, thanks to the Australian Financial Revue AFR)

[springhill]

So where do you get numbers such as "shares held"?
Is it from a company website?
Or a list for all companies?
(like I used to have, thanks to the Australian Financial Revue AFR)

Investor presentations are usually a good source for finding top shareholders. Some dont provide much info about it so I just email them.