Ark Innovation struggling as investors turn away from growth and tech stocks
It was one of the worst days in weeks for the Nasdaq as investors sold off their tech stocks in droves last night.
Apple shares fell by 3.5%, while Amazon and Alphabet, owner of Google, were down by 2.2% and 1.7% respectively in a show of concern over the companies’ high valuations.
The Nasdaq more broadly was down by 1.9% to 13,633.50, its weakest day since late March. The S&P 500 lost 0.7%, down to 4,164.66.
A recent dip in the Tesla share price, in addition to a move out of growth and technology stocks, has caused downward pressure on ARK Innovation, the star performing exchange-traded fund of 2020, managed y Cathie Wood.
According to Morningstar data, the $23.1bn fund confirmed gains of less then 1% last month, nearly 3% below the average fund in its category.
Since the beginning of the year the ArkInnovation ETF is down by 9%, while the S&P 500 is up by 10.9% over the same period.
Shares in Tesla, the fund’s biggest holding at 10.5%, are down 4.5% since the beginning of the year, playing a significant role in the fund’s fall.
“The market has rotated away from the fund’s favored growth stocks toward more economically sensitive segments of the market,” said Todd Rosenbluth, head of ETF and mutual fund research at CFRA. “We think if underperformance continues longer, some investors will become frustrated and seek an alternative.”
Hardman & Co has initiated research on narrowband radio frequency communications networks developer CyanConnode (LON: CYAN) and it believes that the company could be profitable within two years.
Smart meter roll outs have been gathering pace in India and the company’s RFMesh smart meter communications technology is an important component in several of the contracts. There are also potential contract wins in other countries, such as Thailand, the UAE and Egypt.
There are orders for more than 513,000 modules and potential to gain more in India and other parts of the world.
Uncertainty
The sh...
Despite a fall today, the Lloyds share price (LON:LLOY) has broadly continued its momentum from the beginning of 2021 in recent weeks, now standing at 45p per share. The FTSE 100 company has added 23.6% since the turn of the year, as the UK economy continues its seemingly stable path out of lockdown.
The bank finished off strong last week following the release of its solid results in a show that it could be set for a sustained recovery going forward.
Outlook
Can Lloyds continue this recovery for the remainder of this year and into 2022? Its Q1 results make good reading as the bank reversed some of the provisions it had made for loan losses following the spread of coronavirus. As a result Lloyds saw its pre-tax profit soar to £1.9bn for the quarter ending in March, well up from below £100m for the same period a year ago. It is certainly a positive start and can help to explain why the bank’s share price moved up over the last week.
However, Lloyds is not out of the clear just yet. Low interest rates provide difficulty as the bank relies on lending deposits in the form of mortgages, loans to small companies and credit cards.
“Banks make money by lending money out at higher rates than they pay on deposits – the difference is known as the net interest margin. With interest rates on savings accounts already on the floor (and zero in many cases) they simply can’t push the cost of funding much lower – whereas competition and regulatory action means lower interest rates get passed on to borrowers relatively quickly,” says Nicholas Hyett, equity analyst at Hargreaves and Lansdown.
That being said, Lloyds is expecting net interest margins to exceed 2.45% this year, which wouldn’t be too damaging for the bank, even if it doesn’t record massive profits.
“Given that low interest rates look like they’re here to stay, it’s perhaps no surprise Lloyds is looking elsewhere for growth,” Hyett said.
Microsaic Systems (LSE: MSYS) 0.24p, Mkt Cap: £15m
Microsaic have just reported very historic Finals to December 2020. These did not contain the recent significant events, such as the ‘rescue fund raising and new management. Msys already marked the potential change in fortunes by signing a global sales supply agreement for regulatory approved, CE mark, miniaturised mass spectrometry equipment and service on a non-exclusive basis with DeepVerge. Aim listed DeepVerge has a £60 mkt cap and will market and will distribute Msys’s portable solutions for healthcare diagnostic evaluati...
In an effort to impress investors, BP stated its commitment to buying back shares this year as the company reduced its debt levels quicker than anticipated. The news came as BP announced on Tuesday that it expects to reach its $35bn net debt target in Q1 of 2021. The estimate is a result of earlier-than-expected proceeds from disposals and a “very strong quarter”, the oil company said last week. At the end of 2020, BP had a debt pile of $39bn. The company previously expected to reduce its debt to $35bn by as late as 2022.
“With the acceleration of divestment proceeds, together with strong business performance and the recovery in the price environment, we generated strong cash flow and delivered on our net debt target around a year early,” said Bernard Looney, chief executive.
The company plans to begin buying back shares once it reaches its debt target, and will provide an additional update upon releasing its Q1 results on 27 April.
Clean Energy Transition
BP suffered over the past 12 months as the pandemic squeezed demand, while investors didn’t fully buy into its transition into a clean energy company. While its recent results were impressive, this still remains an issue for the company.
Mr Looney has said he is “encouraged” by the major’s direction and that he is “focused on the job at hand”.
“The last thing investors would want us to do is start changing our mind,” Mr Looney said, adding: “We’re a transitioning company. Our ambition is to become a net zero company but it won’t happen overnight.”
It could be years before we know whether or not BP is able to reinvent itself in a way which convinces shareholders.
The Argo Blockchain share price (LON:ARB) is moving upwards again. Having fallen from a record high of 284p in mid-February to 135p by 19 April, Argo appears to be at the early stages of a recovery. Now at 179.9p per share, still well down from its all-time-high, investors will be curious as to whether or not the company represents good value moving froward.
Bitcoin
The performance of the Argo Blockchain share price is closely correlated to the performance of bitcoin, the cryptocurrency which it focuses most of its attention on as a mining company. As UK Investor Magazine has previously outlined, if the price of bitcoin falls, then Argo’s share price is likely to do the same.
From the middle of April, when bitcoin was priced at just under $65,000, through to the end of the month, bitcoin’s price fell dramatically, getting below $48,000. It amounted to a slump of more than 25%, similar to the fall seen in the value of Argo Blockchain’s shares.
At the time of writing, and similar to the value of Argo Blockchain stock, bitcoin is showing signs of a recovery.
Argo Blockchain’s Mining Revenue’s Continue Rise
Argo Blockchain has reported higher revenues in April as the company continues its bitcoin mining, in addition to seeing raised margins. In a monthly update, Argo has disclosed revenues of £6.7m, an increase from £6.57m in March, while its average monthly margins are around 85%.
The company also said it has mined 163 bitcoin during April, compared to 165 bitcoin in March, bringing its holdings to 935 bitcoin.
“I’m thrilled that Argo has generated a fourth consecutive month of record mining revenue and profits. I’m also pleased to have engaged Navier in the development of our Texas facility, a partnership that will enable us to expand our mining infrastructure significantly and efficiently,” Argo chief executive Peter Wall said in a statement.
“I am also delighted to have announced the second year of triple digit growth in our 2020 full year results. Our team has laid an excellent foundation for 2021 and our strong performance in [the first quarter] of this year highlights we are executing it in line with expectations,” he added.
TheCarCrowd – A Passion Asset Investment Platform set to disrupt the investment market and address the lack of options for UK Millennial’s has launched on Seedrs.
TheCarCrowd are building a new way for people to invest in the assets they love. Starting with Classic Cars they are offering people everywhere the chance to take a real equity stake in a classic car and benefit from the potential appreciation. Having smashed through the original funding target on the Seedrs platform they are extending their campaign to allow more investors a chance to support their journey.
Using data sourced from the FCA financial lives survey, TheCarCrowd estimates that around 8 million UK millennials have no form of investments. A lack of choice and high minimum investments often cause barriers to entry.
TheCarCrowd are on a mission to unlock some strong returns for this large underserved market. Classic Cars have appreciated in value 194% over 10 years up to Q4 2019 (Source: Compiled by Knight Frank Research using data from Historic Automobile Group International. Please note that figures refer to the past and past performance is not a reliable indicator of future results).
However, these assets were largely reserved for those who can afford to buy, store and insure the car. TheCarCrowd is changing that with a real equity stake in a car starting at just £20 making is accessible to petrol heads everywhere.
Investors also gain piece of mind knowing that TheCarCrowd are an appointed representative of Kession Capital Limited who are regulated by the FCA.
Launched in Nov 2020, and now with over 620 registered investors demand has been strong. Their first vehicle; a Peugeot 205 GTI funded in just 67 days.
The platform has been purpose built and has a fully automated know your customer, anti money laundering and buy shares journeys meaning they are set up for scale.
The current raise on Seedrs has seen over 200 individuals invest in this exciting and innovative business. TheCarCrowd are also offering some great investor rewards with tickets to UK car shows and even a private track day on offer for qualifying investors, all detailed on their Seedrs page.
“With this fundraising round, we are looking to give people more options when it comes to investing. Helping them to diversify their portfolio and invest in something they really care about.
This Seedrs campaign is a great opportunity for us to supercharge our growth, and we want to bring some valued connections on board
It doesn’t matter how large or small your investment, we’d would love as many people to come on this journey as possible.” David Spickett – CEO
UK Chancellor Rishi Sunak has made the case that the UK is well-positioned for a strong recovery, as those who have remained in their jobs throughout the pandemic will have pent-up savings to the tune of billions of pounds.
Manufacturing managers, who were interviewed as part of the survey, said the relaxing of restrictions, increased demand and rising backlogs of work have seen growth in output.
The UK manufacturing sector has now seen growth for 11 months in a row.
Rob Dobson, director at IHS Markit, said: “Further loosening of COVID-19 restrictions at home and abroad led to another marked growth spurt at UK factories.”
“The headline PMI rose to a near 27-year high, as output and new orders expanded at increased rates. The outlook for the sector is also increasingly positive, with two-thirds of manufacturers expecting output to be higher in one year’s time.”
“Export growth remains relatively subdued, however, as small manufacturers struggle to export.”
The survey also found evidence that inflation is on the rise, as average selling prices increased at a quickest rate since the survey began in 1999.
Jangada Mines share price up 68.8% since the beginning of the year
Jangada Mines (LON:JAN), a natural resources company which was discussed in detail on last week’s UK Investor Magazine podcast, has announced additional drill results from its current 2,000 metre drill programme at its 100% owned Pitombeiras Vanadium Project located in Ceará State, Brazil.
The news “demonstrates the continuity of the vanadiferous titanomagnetite mineralisation (VTM) in several directions”, the company said.
The company has already conducted initial preliminary economic assessment reports which confirmed commercial viabilities of Jangada’s Pitombeiras project.
Today’s news from Jangada Mines marks another significant milestone in the company’s journey towards production which is expected to start in 2022.
Pitombeiras North
VTM mineralisation at Pitombeiras North continues to be opened on the south-eastern, south-western, and north-north-eastern portions of the deposit for resources expansion.
Results recently received include:
o 21.29 metres at 0.58% vanadium pentoxide (‘V2O5‘), 11.09% titanium dioxide (‘TiO2‘) and 56.00% ferric oxide (‘Fe2O3‘), including 8.02 metres at 0.70% V2O5, 13.33% TiO2 and 65.66% Fe2O3
o 22.75 metres at 0.52% V2O5, 10.31% TiO2 and 51.66% Fe2O3, including 7.00 metres at 0.62% V2O5, 12.27% TiO2 and 60.23% Fe2O3
22 drill holes completed to date for a total of 1,466.45 linear metres
o 18 holes intersected VTM mineralisation, and 16 holes’ results have been received from laboratory – one was drilled for metallurgical purposes
Drilling programme at Goela target to start imminently
o Upgraded and expanded Mineral Resource Estimate (“MRE”) and revised Preliminary Economic Assessment (“PEA”) scheduled for completion in Q3 2021.
o Focus on evaluating a Direct Shipping Ore (‘DSO’) operation for the export of a saleable magnetite concentrate containing a minimum of 62% Fe and additional credit from 25% contained V2O5
Jaganda Mines Share Price Up 68.8% YTD
The Jaganda Mines share price has reacted by adding 2.22% on Tuesday following the results announcement. It is a continuation of what has been a strong performance so far in 2021, including a 52 week high in mid-February, with the company’s stock value up by 68.8% since the beginning of the year. From the 16 March 2020, the AIM-listed company’s share price is up by a massive 504%.
Brian McMaster, Executive Chairman of Jangada, commented on the results and gave his outlook for the future: “We continue to advance the Pitombeiras Vanadium Project on many fronts, from resource expansion drilling to project development activities. These include petrographic and mineralogical studies and collection of volumetric samples to assist upcoming metallurgical testworks, detailed topographic drone survey, environmental baseline studies as part of the trial mining licence process, and the initiation of discussions with the Port of Pecém for export of our DSO product.”
“As we successfully wrap up the drilling campaign at the Pitombeiras North target, I am pleased to note that the deposit continues to be opened in several directions, providing significant future upside. While work to update the Mineral Resources Estimate for the Pitombeiras North deposit starts, our team is mobilising the drill rig to the Goela target; results from this campaign will be incorporated in the new resources on conclusion.”
“We are on track to deliver a more robust PEA, scheduled for completion in Q3 2021, and look forward to updating our stakeholders as we continue to progress with our plans.”
Vanadium
The main use of the chemical element, vanadium, is in alloys, especially with steel. 85% of all the vanadium produced goes into steel, 10% goes into alloys of titanium and 5% into all other uses. A small amount of vanadium adds strength, toughness, and heat resistance. Whilst today’s release from Jangada Mines focuses on Vanadium, the Pitombeiras project holds titanium and iron ore resources.
Bars operator Nightcap (LON: NGHT) is making it first acquisition since joining AIM. There has been sharp rise in the share price since the original placing at 10p a share and Nightcap is trying to raise a further £4m to help pay off borrowings of the Adventure Bars Group and finance its expansion.
Nightcap joined AIM in January and the share price has risen despite the company’s bars being closed for most of this year – and some are still closed. The share price has been over 37p, but it fell 4.5p to 29p after the announcement, having been as low as 27p.
Shares are being issued at 21p each to...
