Morning Mumble: Bowleven, a little Lonmin, the Caterpillar & WPP (Belatedly)

Good Afternoon,  Good Evening, its been so long I forgot to click publish.

Some tiddler octane both in the board room and stocks volatility, the occasional police raid, with Global Advertising expectations easing.

Bowleven, at around the current price (c.34) there's potential, sadly the management appears to have done very little to progress things for stockholders in my view. It’s bizarre that statements appear in the FT from the likes of New Age's Steve Lowden, "who he can’t actually remember the last time he even had contact with Bowleven." See: Bowleven, the former exploration and production company. Perhaps someone should ask BLVN board about their progressive and dynamic approach to its assets, seeing as Steve Lowden's comments raise a serious question.

The management's lack of ability to monetize the project for shareholders is very difficult to measure, especially if you base the share price in comparison to the remuneration of Directors, I'd go as far to say its appalling. The board appears to have commissioned supposed independent reports, enthusiastically recommending all the resolutions are voted against. Perhaps these reports should also disclose if and what fee the company has paid them. The cost of this defence, including promoted Tweets on Twitter, is appalling and lacks the substance even smaller companies are able to achieve. A quick glance at Ascent Resources (AST) and Victoria Oil & Gas, proves this, albeit I have zero interest in the latter having taken decent profits.

Those holding for some time will be aware of the glossy promotion that has come through the door. Additional items include Institutional Shareholder Services, Inc. (ISS), the leading corporate governance and proxy advisory firm, and Pensions & Investment Research Consultants Ltd (PIRC), and further waffle from, Glass Lewis. Save for the PIRC throwing Philip Tracy under the bus for some reason or other, it's vote against every resolution.

The board had ample time to do something, with a lot of activity happening around the Etinde license, and the potential of funds getting more actively involved in the neighbourhood, to me the board are lacking any credible defence.

Simply, Crown Ocean Capital P1 Ltd (unfortunately abbreviated) are right, perhaps the cash return needs to be reconsidered, but there's potential with a new Board to establish and progress things. There may even be a few more changes post a successful change in the company!

Lonmin, (having traded it a few times) where according to the gossip out in South Africa is contradictory to the share price movements. Admittedly they have a few staff 'communication' and cost issues, but the M&A in South Africa for large projects is far from finished. Sibanye decided to acquire stillwater mining company for $2.2 billion, instead of LMI.  

Will Sibanye be back at the table having been so close? One suspects so. Plenty discussed in various papers about this and the recent public walk away by Sibanye to complete on Stillwater Mining. Perhaps they'll be back, however with a fairly decent platinum price ($990/oz.), and costs controls being worked on with a simpler mining structure, it's not for the faint hearted or impatient, at these prices, some see further downside, but likewise, orphans and fainted-hearted shouldn't apply. It shall be interesting, all the same. Tightly held at times, it is very volatile.

Not so amusing for Caterpillar, yesterday I’d decided to go short on Caterpillar (CAT), the US construction figures were off and missed even the most conservative expectation. Caterpillar has a long way to go to benefit from the ‘Trump-Tastic’ and now with serious issues relating to a raid by US federal agents as part of a tax probe, it’s a welcome benefit to the short...

In France, populism is growing behind Le Pen, could this become the start of things to come. Most certainly in Spain, discontent is growing. One shouldn't discount those that are disenfranchised or feel trapped in a proverbial corner, they just may be forced/motivated to vote a la Brexit.

The global advertising landscape is shifting, I've been doing some work looking at the real advert figures vs the unaware audience, which despite not even noticing the advert, are considered to be a viewer of the advert; in measured terms, what is the organic reach of the advertising platforms of today compared to the success of yester-year. Too much reliance put on what people perceive as value and reach, when the results are now not materialising despite the alleged success and brand awareness. If there isn't a significant change in the measured reach of an advert and acceptance of smaller targeted campaigns, there will be a reversion in trends.

WPP, are the barometer of expectation in the advertising sector and are not overly positive for 2017, preliminary results. Its not looking so rosy for the eternal acquirer WPP. Is there a goliath out there that will be impacted more by this, I think so! 

Atb Fraser

Please remember the views are my own, etc...it pays to do your own due diligence. Common-Sense Rules apply!