How many times have you seen a share price fall 70%, 80%, 90% or more in a year and thought it an obvious dead duck? I see it happening all the time, yet the punters out there must be split 50/50 — if everyone shared my bearish stance, the price would already be down to zero.
But one company I really don’t see any way back for is Monitise (LSE: MONI), whose shares are down 91% from their 12-month high set in late November 2014, to just 2.9p today, and there are no profits on the horizon yet. And if we go back a bit further, to February 2014, we see a subsequent fall of 96%.
Back then, as an early mover in the electronics payment business, Monitise was looking like a very promising prospect — the market was sure to skyrocket, and Monitise had a very strong partner in Visa Europe. But since then, Visa has lost interest and founder Alistair Lukies has moved on, as has subsequent CEO Elizabeth Buse.
Meanwhile, everywhere I look I see signs saying “Apple Pay accepted here”. Only last month Monitise signed a new deal with Telefónica, so there is some hope — but in the longer term it’s fighting what I can only see as a losing battle here.
Oil slump continues
Oil explorers are facing an increasingly bleak outlook, if oil prices are anything to go by — Brent Crude has slipped below $45 to hit new lows, after its two-month mini rally has come to an end. And while that’s bad news for the big companies, it’s worse for small explorers like Enquest (LSE: ENQ). Enquest shares have fallen 66% in almost exactly a year, to 24p, and by a whopping 83% since June 2014.
The upside for Enquest is that it is actually profitable, although EPS is expected to fall a long way this year and even turn negative in 2016. But against that, Enquest reported first oil from its Alma/Galia exploration last month, and its longer-term operational position actually doesn’t sound too bad.
At the interim stage reported in August, the firm told us it was on target for operational expenses of around $38 per barrel this year, falling to the low $30 range next year. That sounds good enough to survive low oil for a while longer, I reckon.
Shiny stuff
The commodities slump has hit platinum miner Lonmin (LSE: LMI) harder than most, and its share price has crashed by 95% from last November’s peak, and by 99% in five years. But at just 10p today, does that offer a big chance of success for recovery investors?
Sadly, I doubt it. Although Lonmin has been profitable in the past, we’ve seen pre-tax losses in the past two years — with the year just ended in September being especially painful, although it has been a year of modernisation at the company’s old-fashioned and labour-intensive mines. But with the costs of all that leading to net debt of $185m at the end of September, a $407m rights issue has been needed to bolster finances, together with the negotiation of $370m in bank lending facilities.
Not for me.
