Diary: enq, pic

ENQ - Enquest - Oil and Gas producers - 91p/£730.1m

BTW, whenever I quote a price in a headline, it's usually at yesterday's price - I pull it off of Sharelock Holmes. This will help explain some inconsistencies in the prices I report.

ENQ is one of my forays into growth investing. I bought in late August at 109.6p (including all costs). Shares are up 11% today to 102.5p on a great announcement:

EnQuest sanctions the development of Alma and Galia. Production guidance shows growth potential of over 20% p.a. Alma/Galia:: Medium term production guidance: CAGR of over 20% per annum, 2009 to 2014. Crathes exploration: exploration well, 21/13a-5 encountered a 52ft light oil column in excellent quality Palaeocene sands.

Here's what a poster on LSE (that's London South East, remember, not London Stock Exchange. I've never had much joy at the latter's site) said about ENQ:

To those who have only recently come across Enquest let me tell you some facts. The CEO of this companyAmjad Bseisu is perhaps the smartest guy in business today. Not just the oil business but any business. He is a very very sharp, polished smooth operator. As smart business men generally do he has already made a LOT of money. When he joined Petrofac he was considering the idea of setting up his own hedge fund specialising in oily type deals. Enquest has given him the option to do this in a practical way with real fields and bits of kit but be assured they are merely the means to an end which is making much more money for himself and his shareholders. Look at the investment he has made with his own money in the company he is running! Why do you think he is doing that? Because he can't think of anywhere that he can make more money! Enquest will continue to put together innovative value enhancing deals for years to come. I admit I know the guy well and as a result have approx a quarter of my SIPP invested in Enquest at prices up to !35 but I'm relaxed as presumably Amjad is who also bought more shares at a much higher price than they are today. Long term this is a highly professional steady business that will make money for years to come. It's not a Wessex or a Chariot but as safe core high quality holdings go they don't come much better than Enquest.

OK, a bit rampy that one. There's not much other good stuff on the BBSs.

I'm pretty happy with this one so far. Directors do have an enormous stake in it. Bseisu has £68.7m, Hares has £3.5m, and the others total about £1m.

Shares are trading on a PER of 15.3, so as oilies go, they aint cheap. RDSB is on 9.3, and poor old BP. is on 6.6. ENQ has net cash of £149.2m, negative gearing, but a low z-score of 1.59 (although that seems to be normal for oilies). ROE is currently 8.4%.

The future is of course imponderable, but I'm pretty happy holding this one.


PIC - Pace - Tech hardware and equip - 45.3p/£138.3m

A quick glance at analyst forecast show that they're getting increasingly bearish since the last time I looked. I'm getting EPS figures of 2011F 18.87p -16.5% 2012F 17.77p -5.8%. I still hold this share, what little left their is to hold, that is.

As ever, the basic reasoning behind holding is that the problems are only temporary. And it isn't all bad news. Here's an article that appeared today, for example:

Norwegian triple-play provider sees 35 per cent service user growth with launch of Pace Elements-powered VoD (Video on Demand) portal. The new portal provides Altibox subscribers with a simple, highly intuitive experience when searching and navigating its on-demand film and TV content.

PIC is doing some very neat things, they've just been finding lately that water and electricity make poor bedfellows (yeah, laugh it up, us PIC shareholders need a sense of humour). It's trading at a PER of 2.4. Ugly indeed.

I've taken some snippets from the ADVFN BBS - a site that I'm growing to tolerate despite the jiggling baloney and dreadful layout. Here's some very recent opinions, which pretty much capture the sentiment of the market:

You see, you read news like that and I just think wow.... This company is going places. If the software side comes off big time this could be a massive growth company. Such a shame regarding the disasters this year.

and

Terrific news HOWEVER, and as so often there’s no £-$ attached to that news! Are we charity?  Had the potential numbers to this been significant they’d be obliged to say so. The market will likely just react with ‘oh very good’ NEXT! IMHO bla bla

and

I just don`t see the long term Case for Pace . I`m no Tech` expert , but , often these `Tech Superior` company`s are overtaken by `New Tech` . I don`t rate their Global Reach anymore in the hands of these Directors , I have no confidence that they will be able to exploit it , in fact it may well be another cash gobbling distracting disaster in the making . Both the above require funding as well as expertise , and even the funding via cash generation looks wobbly . So , the three reasons I originally made the mistake of buying here , now look to be highly suspect and unattractive . I got it all wrong , but I am also holding a small residual stake in the hope of a takeover .

and

Even if business declines to the point they earn only £50m profits they will still be worth £2 a share when debt free in two years time. Personally I think they can hold £100m profts year on year as a absolute min, I'm not convinced £200m will be achieved according to strategic review.