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Do Monitise Plc, Rare Earth Minerals PLC & Sirius Minerals PLC Offer More Pain Than Gain?

Back in April I considered making what I called a three-way high-risk play by investing across a trio of potential multi-baggers.

The growth prospects at Monitise  (LSE: MONI)Rare Earth Minerals (LSE: REM) and Sirius Minerals  (LSE: SXX) were tempting many investors at the time. I was looking to turbo-charge my rather stodgy-looking portfolio of FTSE 100 blue-chips and wondered whether these three could add some urgency. I thought at least one of them must pay off, making up for any losses incurred elsewhere.

Off The Moni

Unfortunately, mobile banking software group Monitise has been a full-blown disaster. It was trading at 14p at the time, down from its 52-week high of 36p. Today, you can hoover up its ravaged shares for 3p a pop. It has been a dismal year for Monitise, which has lost a rumoured buyer, founder (joint-chief executive Alistair Lukies), partner (Visa Europe), chief executive (Elizabeth Buse) and the faith of the market.

In return, the company has gained some big-name competitors with infinitesimally larger pockets, including Apple, Google and PayPal. Those who said Monitise was in a booming sector have been proved right, but it lacked the muscle to compete. It still notches up the odd contract win (eg, Telefonica), but urgently needs fresh leadership and profit visibility. One for bottom fishers only.

Mineral Misery

Rare Earth Minerals and Sirius Minerals had to go some to offset my losses. Sadly, REM has fallen 25% since mid-April, from 1.22p to around 90p. That’s despite striking a potentially game-changing deal with electric sports car and energy storage products company Tesla Motors.

Perhaps investors are nervous about the tough two-year performance milestones Tesla has affixed to the deal to buy lithium hydroxide from REM’s Sonora field in Mexico, or maybe it is the lack of recent news, but investor interest has stalled lately. Even news that successful tests had persuaded it to mobilise a second drill rig at Sonora did little to revive spirits. All we can do now is wait until progress reports on the Tesla lithium deal. 

Sirius In The Black

At least Sirius Minerals has hit pay dirt, up 28% from 14p to 18p since April, helped by steady progress towards winning full approval for its North York Moors potash project, where it hopes to dig the planet’s largest polyhalite mine, which should produce 13m tonnes of the fertiliser per year.

There has been little news since it received prequalification status from Infrastructure UK (IUK) for the project, which will help in its quest to raise funds. Sirius has been knocked by the commodity blow-out, which could make raising investment funds harder. That said, potash is a very different market to, say, copper or iron ore, even if the price has fallen sharply this year.

My three-way bet has gone badly so far, but investing is a long-term game. I don’t hold out much hope for Monitise, but Rare Earth Minerals and Sirius Minerals may yet prove winners. Still, I am relieved I didn’t back this bet with real money. 

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Harvey Jones has no position in any shares mentioned. The Motley Fool UK owns shares of Monitise. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.