Align Research Recommendations update

September 3, 2017 | Posted by

As equity markets globally continue to push on in the face of historically extreme valuations whilst seemingly ignoring recession risk in the US and increasing geo-political tensions, we believe that caution is very much warranted now and indeed it is time to actively raise cash and take advantage of the distribution opportunities that the buoyant markets currently present. Indeed, in recent weeks we have been doing precisely this.

We bring 2 important charts to your attention below and explain how this concurs with the Align approach:

What this distribution log illustrates very clearly is that going back over multi-decades, whenever PE’s have been in the late 20’s, the prospective 20 year (yes that is 20 years not months) has been nominal or even negative. Of course, history is no guarantee as to what will happen in future but it does certainly give us food for thought. Our own perspective is that when looking at the valuation of the so called FAANG stocks in the States is that buyers at these levels have zero safety margin for a whole multitude of scenarios. As an investor with hopefully many years of future life remaining that strikes us as not a great position to be in.

The 2nd chart we would like to bring to your attention is per below:

This is a near 50 year chart of the relative valuations between commodities (as a basket) and equities. Again, the same caveat applies re history being no guide to the future but what it also spells out to us is that our own anecdotal evidence of value (being value biased investors) is largely being presented in the commodities arena – in particular smaller cap stocks where there is a dearth of research. Choose these stocks well and they largely move independently of the wider equity market class. This is precisely what we attempt to do here at Align Research.

With the above in mind below is an update of our current call stances:

Company/Asset Date   Price Current % Gain/loss Notes
Vectors Junior Gold Miners 04/01/2016   1598.25 2956.5 84.98% HOLD
Randgold Resources 13/01/2016   4253 7915 86.10% TAKE PROFITS
Antofagasta 13/01/2016   368.8 1018 176.03% SELL
Fresnillo 13/02/2016   692 1621 134.25% SELL
Providence Resources 24/02/2016   15.25 8.5 -44.26% HOLD
Barclays 02/03/2016   158.1 190.25 20.34% HOLD
GBP/AUD 06/03/2016   1.9264 1.6239 -15.70% ADD
GRIT 17/04/2016   5.125 11.75 129.27% HOLD
Valeant Pharmaceuticals 12/06/2016   2400 1423 -40.71% ADD
Genel Energy 28/07/2016   90 155.25 72.50% HOLD
Strat Aero 27/06/2017   0.105 0.0825 -22.50% ADD
London Capital Group 12/10/2016   3.3875 2.25 -33.58% HOLD
VIX (to rise) 28/10/2016   11 12.04 9.45% ADD
Gulf Keystone equity 11/11/2016   121 120 -0.83% BUY
Zanaga Iron 13/11/2016   3.5 5 42.86% HOLD
CMC Markets 11/12/2016   100 146.5 46.50% SELL
IG Index 11/12/2016   457 666 45.73% SELL
Plus 500 11/12/2016   375 912 143.20% SELL
Dryships 28/01/2017   1950.2 309 -84.16% SELL
Short NASDAQ 19/02/2017   5324 5838 -9.65% ADD TO SHORT
Silence Therapeutics 11/03/2017   89 180 102.25% HOLD
Stanley Gibbons 06/06/2017   13 8.5 -34.62% ADD
Gold 01/01/2017   1130 1317.4 16.58% ADD
Gulfsands Petroleum 21/01/2016   2.875 5.75 100.00% HOLD
LGC Capital 07/04/2016   4.6575 13.5 189.00% SELL RECOMM 4 SEP 2017
Space & People 25/01/2016   38.75 34.5 -10.97% HOLD
ITM Power 11/08/2016   17 36.4 114.12% SELL RECOMM  23 AUG 2017
Mgmnt Res Solutions 13/09/2016   12.5 3.5 -72.00% ADD
Zenith Energy 06/10/2016   6 12 100.00% HOLD
Milestone 24/01/2017   0.37 0.245 -33.78% HOLD
Obtala 10/05/2017   18 18 0.00% HOLD
Short Bluejay Mining 11/07/2017   13 17.75 -36.53% REITERATE SELL STANCE
Powerhouse Energy 26/07/2017   1 1.32 32.00% HOLD
Arian Silver 12/05/2017   0.85 0.525 -38.24% HOLD
Greenfields Petroleum 17/08/2017   0.2 0.18 -10.00% ADD
        Total 1157.63%  
        AVERAGE 33.07%  


NOTE – Prices based on closing levels as at 1 Sep 2017 and local currency prices used.

We are pleased to report a simple average return of 33.07% on the aggregate of our recommendations.


Align Research Ltd and a Director of Align Research holds positions in many of the individual companies and instruments listed here.

This is a marketing communication and cannot be considered independent research. Nothing in this report should be construed as advice, an offer, or the solicitation of an offer to buy or sell securities by us. As we have no knowledge of your individual situation and circumstances the investment(s) covered may not be suitable for you. You should not make any investment decision without consulting a fully qualified financial advisor.

Your capital is at risk by investing in securities and the income from them may fluctuate. Past performance is not necessarily a guide to future performance and forecasts are not a reliable indicator of future results. The marketability of some of the companies we cover is limited and you may have difficulty buying or selling in volume. Additionally, given the smaller capitalisation bias of our coverage, the companies we cover should be considered as high risk.

This financial promotion has been approved by Align Research Limited.