Indeed, investor appetite has ignited once again as revenues growth at Croda appears to be stepping up a gear.

The East Yorkshire business announced that “the improving sales trend seen in the fourth quarter of 2016 has continued in Q1,” with revenues at constant currencies rising 4.9% during January-March. This marks a vast departure from the 1.6% full-year sales decline punched in 2016 and underlines Croda’s improving revenues outlook.

Commenting on the results, Croda chief executive noted that “we are encouraged by the group’s performance in the first quarter,” adding that “whilst we expect the exceptional sales growth seen in Performance Technologies to moderate, we remain on track to deliver continued profitable progress through 2017.”

Core performs

Crucially, organic sales at Croda’s core (comprising its Personal Care, Life Sciences and Performance Technologies divisions and accounting for nine-tenths of total revenues) grew 5.3% in the period, with all three arms seeing sales improve in the last quarter.

Sales at Performance Technologies and Personal Care cantered 11.7% and 4.6% higher respectively during January-March, the former benefiting from strong Lubricant and Polymer Additive sales and the latter from robust demand for its Active products.

Although sales at constant currencies dropped 1.9% at Life Sciences, this fall reflected the drag from a from a long-running North American API contract. Excluding this item, sales at the division actually rose 2.2% during January-March.

Territorial titan

As well as enthusing over Croda’s broad-based strength, share pickers have also been encouraged by the company’s improving popularity across the globe.

In Asia organic sales leapt an impressive 11%, while in Europe turnover improved 8%. And while the aforementioned API contract dragged North American turnover 1% lower, Croda is beginning to see market conditions here — as well as in Latin America — begin to slowly stabilise.

Today’s release underpins the City’s confidence in Croda’s growth outlook, and are likely to prompt revisions to anticipated earnings rises of 26% and 8% for 2017 and 2018 respectively.

So while the chemicals giant deals on a slightly-heady forward P/E ratio of 22.7 times, I reckon the possibility of multiple upgrades to profit forecasts still makes Croda a compelling blue-chip pick.

Promising but petrifying

I am afraid I cannot extend my enthusiasm to potash miner Sirius Minerals (LSE: SXX), however, as I believe the road to earnings growth is littered with possible obstacles.

My fears are not exclusive to Sirius, you see, but rather the wider realm of investing in early-stage commodities specialists. It is true the firm’s polyhalite project in North Yorkshire is one of the most exciting on the planet, but Sirius is not predicted to start pulling maiden material out of the ground until well into the next decade.

In between now and then Sirius faces the prospect of ballooning costs, project delays, the possibility of subsequent financing issues and a range of other uncertainties. In particular, the state of the potash market once Sirius’ production starts hitting the market is anyone’s guess, and could see the digger fall disastrously short of its earnings targets.

Whilst still loaded with plenty of potential, I for one believe the risks at Sirius far outweigh the potential rewards.

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Royston Wild has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

That is not to say that Sirius Minerals (LSE:SXX) is guaranteed to deliver rich long-term rewards however, once the company’s titanic polyhalite project in North Yorkshire begins to pull material out of the ground from 2022.

Not only does the business face the same uncertainties concerning potential payloads, financing, and other uncertainties associated with all fledgling mining operators, but many other potash producers are also ramping up production to meet the demand surge in the coming years.

Just this month, for instance, Russian producer Uralkali received a licence extension to its Polovodovsky project until 2054. And the business received the go-ahead to build a potash plant with an annual capacity of 2.8m tonnes, due for completion in around seven years.

Therefore, the possibility that the current market oversupply will keep ballooning in the years ahead could seriously hamper potash price strength once Sirius Minerals’ mega-mine comes online in the next decade.

Serious supply fears

I would therefore consider Sirius Minerals to be a risk too far for cautious investors. But the potash play is not the only commodities stock where the potential problems outweigh the possible rewards, in my opinion.

Take oil leviathan BP (LSE: BP), for example. The share has seen its price accompany Brent prices steadily lower in recent months as the prospect of the crude market remaining mired in chronic oversupply lasting much longer than expected has dawned on market participants.

Brent oil fell to fresh four-month lows around $50.50 per barrel after latest EIA data showed US crude stockpiles hitting a fresh record peak of 533.1m barrels last week, once again defying broker expectations of a more modest build.

For all the fanfare surrounding OPEC’s supply freeze late last year, the accord gave North American producers reason to ramp up their operations and make up for the cartel’s reduction.

But the US shale sector is not the only reason for concern, the multi-year investment programmes in other nations also beginning to have a serious impact on oil levels. High levels of imported material from Canada made a huge difference in last week’s stock build Stateside, for example.

And this of course reduces the chances of Saudi Arabia orchestrating another output deal as it loses share to non-OPEC rivals, not to mention those OPEC members who are failing to meet their own supply restrictions.

Given the steady move to renewable energy sources too, as global legislators step up the fight against rising greenhouse gases (a scenario helped by improving technological efficiencies and cheaper user costs) the long-term demand for oil is also looking less than assured, and with it the earnings outlook at the likes of BP.

So which is the superior commodities stock? Well, given the prospect of yawning material imbalances weighing on both oil and potash markets long into the future, I reckon savvy investors should give both a wide berth right now.

The post Sirius Minerals plc vs BP plc: which is the superior commodities stock? appeared first on The Motley Fool UK.

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

So as we now enter the latter half of Q2, it’s a good time to assess whether recent risers Sirius Minerals (LSE: SXX), Tullow Oil (LSE: TLW) and Centamin (LSE: CEY) can look forward to further gains in the near term and beyond.

Potash power

Investor appetite for Sirius Minerals has shaken wildly in recent weeks following a spate of operational updates concerning its gigantic North Yorkshire polyhalite project.

The potash play set the market alight in late March after a definitive feasibility study revealed that the asset could have a net present value of $27bn on first production. But Sirius Minerals’ share price nosedived once investors digested news that $3.56bn would be needed to get the project up-and-running.

The stock has resumed its uptrend since the start of this quarter however, even though Sirius still has significant milestones to reach on financing. And of course the digger faces the usual risks associated with the business of minerals exploration and production, not to mention the prospect of prolonged weakness in potash values.

While fresh operational and funding updates could fuel further share price advances, the opposite is also true, particularly given the recent breakneck rise. I believe the company carries far too much risk at present.

Crude concerns

Shares in Tullow Oil have moved higher in lockstep with a resurgent crude price. Indeed, the driller stepped skywards again on Monday as the Brent benchmark moved to six-month peaks around $49 per barrel.

However, I reckon the oil market’s poor supply/demand fundamentals fails to support such a heady rise, leaving the likes of Tullow Oil in danger of a sharp correction.

Black gold prices have bumped higher today after Goldman Sachs advised that recent output disruptions have pushed the oil market back into deficit. But the broker expects the supply overhang to recur during the first half of 2017, and also slashed its WTI benchmark forecasts for next year to $52.50 per barrel from $57.50 to reflect this.

Maiden oil at its colossal TEN project in Ghana is expected to blast Tullow back into the black with earnings of 5.1 US cents per share. But I believe a consequent P/E rating of 116.8 times doesn’t reflect the firm’s vast risk profile, and reckon this leaves plenty of space for a significant share price retracement.

Golden opportunity?

Arguably gold producer Centamin has more compelling investment appeal than either Sirius or Tullow.

Gold doesn’t suffer the same supply/demand dynamics looming over other major commodity markets. Meanwhile, wider concerns over the health of the global economy could propel safe-haven buying of gold still higher — the hard currency touched $1,300 per ounce just last week.

But on the downside, the prospect of a resurgent US dollar could put gold values — and with it Centamin’s share price — under fresh pressure. And persistent weakness in Chinese and Indian jewellery and bar demand could put a further spanner in the works.

Centamin is expected to enjoy a 34% earnings upswing in 2016, resulting in a decent ‘paper’ valuation of 13.7 times. But there’s still plenty of mud that could send precious metals prices, and consequently Centamin’s share price, shuttling lower again, in my opinion.

The post Can Q2 winners Sirius Minerals plc (+24%), Tullow Oil plc (+26%) and Centamin plc (+31%) keep surging? appeared first on The Motley Fool UK.

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

Digger dives

Shares in potash play Sirius Minerals continue to trade in an extremely volatile manner, a 5% decline on Friday trading taking the stock to its lowest level in a fortnight.

Such extreme trading patterns are a common phenomenon for companies involved in the business of minerals and energy extraction, where news of bubbly discoveries — or conversely exploration disappointments — can prompt both panic buying and selling.

And so a blockbuster definitive feasibility study at its North Yorkshire polyhalite project sent Sirius Minerals spiking to 10-month highs back in March. Indeed, the London-based digger said that the asset had the potential to make it “a world leader in the fertilizer industry.”

But news released shortly afterwards that the firm would need $3.56bn to get the project off the ground, a sum Sirius Minerals plans to raise through issuing equity and raising debt, prompted investors to stampede towards the exits.

The mining play advised last month that pre-tax losses clocked in at £7m for the period to March 2016, not a surprise given that it’s yet to generate any revenues.

And the City expects losses to widen over the next few years as it attempts to get production up and running — indeed, Sirius Minerals is anticipated to see a loss of £66.7m for 2016 scream higher to £74.3m and £142.2m in 2017 and 2018, respectively.

Not only does Sirius Minerals face near-term obstacles to fund its polyhalite project, but the supply/demand imbalance washing over the potash market — not to mention the aforementioned unpredictability related to mining operations — casts further doubts over the company’s ability to flip into the black beyond the next few years.

I believe Sirius Minerals carries unacceptable levels of risk at the present time.

Software struggler

I also believe payment processing play Monitise is currently an unattractive investment destination. The company has remained extremely quiet since announcing in early March it was entering discussions to offload its Markco Media division, a unit it acquired for £55m just two years ago.

There’s already plenty of uncertainty swirling around the future of Monitise as the likes of Apple and Google take a chunk out of the firm’s market share by launching their own mobile payment systems. Card giant Visa has also torn up its relationship with the company as it seeks to go it alone.

Monitise’s customers are also rejecting the firm’s decision to stop developing bespoke applications in favour of generic software solutions, with revenues slumping 21% during July-December, to £33.4m.

The City expects full-year sales to June 2016 to register at £66.3m — down from £89m in 2015 — and to slip again to £64.5m next year, a situation that’s likely to keep Monitise locked firmly in the losses column. Like Sirius Minerals, I reckon the company is a perilous investment destination right now.

The post Why I’d keep on selling Sirius Minerals plc and Monitise plc! appeared first on The Motley Fool UK.

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Royston Wild has no position in any shares mentioned. The Motley Fool UK owns shares of and has recommended Alphabet (A shares), Alphabet (C shares), Apple, and Visa. 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.

Fertiliser supplier fades

Potassium digger African Potash (LSE: AFPO) collapsed 43% in Friday business, after furnishing the market with disappointing operational news.

African Potash advised that the severe drought hitting southern Africa has prompted a deal to supply 20,000 metric tonnes of urea to a COMESA customer to fall through. The client in question is still awaiting confirmation of order from its own customers, African Potash advised.

On top of this, particularly dry conditions in Zimbabwe has seen an agreement inked back in December with Windmill fall through, African Potash said.

In brighter news, African Potash also announced it had signed a participation agreement with Safyr Commodities — which itself has inked conditional sales agreements with leading Zambian fertiliser distributor Nyiombo Investments — for the supply of 50,000 tonnes of urea and NPK.

But investors have naturally given this news short shrift. African Potash is already on shaky ground, the company having seen pre-tax losses swell to $716,000 in July-December, up from $660,000 a year earlier.

Given the scale of unfavourable climate conditions on its revenues outlook, I believe African Potash is a risk too far at the present time.

Software play strides

Cerillion (LSE: CER) has seen its share price jump almost 8% today, after it advised the market that results for the first half of the year “are anticipated to be in line with management expectations.” The software play anticipates reporting that revenues and EBITDA will have advanced 11% (to c.£6.9m) and 21% (to £c.1.1m), respectively, between October and March, when it announces its interim results for the half year in late May.

Cerillion — which provides software for billing, charging and customer relationship management (or CRM) — announced in recent weeks the signing of a $2.4m contract with an existing customer which Cerillion describes as “a multi-service communications provider in the Americas.”

The company provides services for a broad range of customers in established and emerging economies alike, and sales continue to pick up speed. Cerillion currently boasts 75 major clients across 40 countries, and I expect cutting edge products like its Cerillion Skyline package to keep sales spiralling higher.

On the precipice?

I am not so optimistic over the growth outlook of Vedanta Resources (LSE: VED), however. Sure, the share price may have added an extra 33% during the past month as commodity  prices have rallied. But as I have previously cautioned, the fundamental picture for the resources markets remains less than encouraging.

Vedanta Resources continues to hike production across its main markets to offset the impact of lower resources values. Indeed, the business churned out record amounts of copper cathodes, aluminium, electricity and silver during January-March, mirroring similar measures by many of the world’s major commodity producers.

But a drastic slowdown in Chinese economic growth raises serious questions over where exactly all of this excess material will end up.

Given this backdrop, I believe recently-revived commodity prices are in danger of experiencing a severe reversal, putting the share values of chargers like Vedanta Resources in equal peril.

The post Should You Buy Vedanta Resources plc, African Potash Ltd & Cerillion PLC Today? appeared first on The Motley Fool UK.

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

In the money

Money transfer and currency card specialist FairFX (LSE: FFX) has continued its heady ascent of recent weeks with a 3% gain in Friday trade, the business greeting the market with robust full-year numbers for 2015.

FairFX announced that revenues leapt 35.7% higher last year, to £7.4m, although heavy marketing spend drove the firm into a pre-tax loss of £3.4m. The money play added 103,338 retail customers last year, taking the total to more than half a million.

Reassuringly FairFX added that trading during the first quarter of 2016 had been in line with expectations, and I believe the firm’s huge investment in marketing and technology — not to mention strategic focus on the retail card market — should keep delivering the goods.

FairFX is not expected to flip into the black this year, however, given that its hot growth story is still in the early stages. But the money play is expected to report its first earnings of 1.1p per share in 2017, and despite a heady P/E rating of 30.1 times I reckon FairFX could prove a lucrative selection for long-term investors.

Oilie gushing higher

Oil explorer Circle Oil (LSE: COP) also enjoyed a firm bump skywards in end-of-week trade, an 18% advance putting FairFX firmly in the shade.

Investor appetite shot higher following news that Circle Oil had agreed to suspend repayments to the International Finance Corporation under its reserve based lending facility. The payment deadline has now been pushed back to May 13th.

The stunning rise of Brent crude to four-month highs above $44 per barrel has no doubt boosted investor hopes that Circle Oil may now be past the worst.

I am not so convinced, however, and believe Circle Oil could find itself on the back foot again should ‘black gold’ prices retrace and the oil play’s fragile balance sheet find itself under the microscope again.

In a hole?

Like Circle Oil, I reckon Sirius Minerals (LSE: SXX) is also at the mercy of a colossal share price correction, thanks to the hulking supply imbalances hanging over commodity markets.

The potash producer was recently dealing 2% higher from Tuesday’s close, however, Sirius Minerals settling in recent weeks following heavy stock price volatility.

Shares shot to their highest in almost a year in March following a definitive feasibility study at its North Yorkshire polyhalite project, an asset that Sirius Minerals believes will transform the business into “a world leader in the fertilizer industry.” But news that the firm will need $3.56bn to start digging brought shares back to Earth with a bang.

While Sirius Minerals throws up plenty of potential, the firm remains a high-risk stock despite the exceptional results of recent drilling work. The digger still has to raise finance for its asset in the North, while subdued potash values puts a further fly in the ointment. And of course the unpredictable nature of minerals production also makes the Sirius Minerals a gamble too far, in my opinion.

The post Should You Buy Sirius Minerals PLC, Fairfx Group PLC & Circle Oil Plc Today? appeared first on The Motley Fool UK.

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

Box up a beauty

Real estate investment trust Tritax Big Box (LSE: BBOX) made the headlines in Tuesday business with news of another impressive acquisition.

Tritax — which buys and manages big-space locations like warehouses and distribution hubs — has snapped up Argos’s national distribution centre in Burton-upon-Trent for £74.65m, the firm announced today. This follows the £25.2m purchase of Brake Bros’ distribution site in Bristol last week.

Tritax is clearly a firm on the move — the firm recorded a total return of 19.4% in 2015. And the City expects Tritax to keep earnings growth rolling with expansion of 6% and 4% in 2016 and 2017 respectively.

Sure, these projections may create slightly-heady P/E ratings of 20.9 times and 20.1 times. But I believe dividend yields of 4.6% for 2016 and 4.7% for this year comfortably offset these figures.

Sports superstar

Shares in TLA Worldwide (LSE: TLA) have exploded in Tuesday trade, the company recently dealing 40% higher from the last session’s close.

The sports marketing agency made the headlines last week after announcing it had it had reached an agreement with Atlantic Alliance Partnership on a potential takeover by the US firm.

The deal will see the agency’s shareholders receive 10 new Atlantic Alliance Partnership shares for every 111 of TLA Worldwide’s shares. This represents an indicative offer of 65p per share for the British company, still some way above the current share price of 57p.

Of course, there is always a chance that the bottom could fall out of the deal, as is the case with any takeover attempt. But there is still plenty of room for investors to make a handsome profit should the accord come to pass.

Stuck in a hole?

Shares in Sirius Minerals (LSE: SSX) have endured a wild ride in recent weeks. The company more than doubled in value from February’s troughs to a peak of 24p per share less than a month later, although investor optimism has cooled significantly since then.

The potash play finally released the much-awaited definitive feasibility study for its North Yorkshire polyhalite project during mid-March. The release contained both good and bad news — Sirius Minerals estimates that the asset will have a net present value of $27bn when production commences.

But the cost of developing the asset shocked investors, with the digger expecting to fork out $3.56bn to get the project up and running. Sirius Minerals now plans to raise equity and take on debt to move the project along.

Considering the scale of finance the firm needs to develop the mine, as well as the potential for potash prices to keep on struggling, I believe Sirius Minerals is a risk too far at the present time.

The post Should You Pile Into Sirius Minerals PLC, Tritax Big Box REIT PLC & TLA Worldwide Plc Today? appeared first on The Motley Fool UK.

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