Monday, December 05, 2016
Q&A: Falah Alamri, director general of SOMO
Exxon cuts Kurdistan portfolio by half The American super-major, whose 2011 contracts with Kurdistan spurred an investment bonanza, has relinquished the Qara Hanjeer, Arbat East, and Betwata blocks. Exxon cuts Kurdistan portfolio by half ExxonMobil CEO Rex Tillerson (second from left) meets with KRG President Massud Barzani (fourth from right) and other senior Kurdish officials in Davos, Switzerland, on Jan. 23, 2013. (Photo credit: Kurdistan Regional Government) By Ben Lando, Patrick Osgood and Ben Van Heuvelen of Iraq Oil Report Published Tuesday, December 6th, 2016 ExxonMobil has walked away from three of the six exploration blocks it operated in the Kurdistan region.The U.S. super-major relinquished its interests in the Qara Hanjeer, Arbat East, and Betwata blocks, according to Kurdistan's Minister of Natural Resources Ashti Hawrami and Exxon spokesperson Lauren Kerr. The company retains 80 percent operating stakes in the Al Qosh, Pirmam and Bashiqa blocks."It is normal," Hawrami said, speaking on the sidelines of the CWC Kurdistan-Iraq Oil and G... ================== Iraq's top oil salesman discusses the future of Basra Heavy, the choices necessary to implement the OPEC quota deal, and making more money on Kirkuk oil sales. By agreeing to participate in an OPEC cut, Iraq is taking a leap of faith - that upward pressure on global oil prices will compensate for reduced production, and ultimately lift state revenues. As the director general of Iraq's State Oil Marketing Organization (SOMO), Falah Alamri has his finger on the pulse of the oil market, and he expressed optimism that Iraq has struck a good deal, despite the complexities and uncertainties of today's industry."The country should make a calculation, b... Monday December 5, 2016 SOMO Director General Falah Alamri at the SOMO headquarters in Baghdad on Oct. 24, 2016. BEN LANDO/Iraq Oil Report Iraq's top oil salesman discusses the future of Basra Heavy, the choices necessary to implement the OPEC quota deal, and making more money on Kirkuk oil sales. Related Stories 1.Iraqi Parliament starts oil corruption investigation 2.Iraq sustains high crude output in October 3.Oil minister shakes up senior leadership 4.Iraq pursues scaled-down water injection project 5.Iraq faces tough cuts after OPEC deal ◾Q&A: Iraqi Oil Minister Jabbar al-Luiebi ◾UPDATE: Iraq breaks export records ◾Iraq faces tough cuts after OPEC deal ◾Iraq sustains high crude output in October ◾Kurdistan oil revenue rebounds despite export dip ================= Gulf Keystone receives Shaikan payment By StockMarketWire | Mon, 5th December 2016 - 07:49 Gulf Keystone has confirmed that a gross payment of $15.0 million has been received from the Kurdistan Regional Government for Shaikan crude oil export sales in September. Gulf Keystone and the KRG's Ministry of Natural Resources continue to work towards agreeing the final form of the invoices for May to September. Following receipt of the payment, the company's current cash position is $104.5 million. Recent Features • The week ahead: European politics, TUI • Share of the week: Oil mid-cap takes the crown • How our aggressive winter portfolio thrashed the market • The curse of the growth investor • Insider: Big bets these two have bottomed out Most-read this week • Stockwatch: Lock in 7.5% yield • Chart of the week: A bank ripe for turning? • 10 'magic formula' shares for value investors • Stockwatch: this bid target may have 20% more upside • How our aggressive winter portfolio thrashed the market ===================== 10 'magic formula' shares for value investors By Stockopedia and Ben Hobson | Wed, 30th November 2016 - 13:29 Share this 10 'magic formula' shares for value investors stock screen Greenblatt companies Joel Greenblatt, a prominent US fund manager, once wrote that "buying good businesses at bargain prices is the secret to making lots of money". He insisted that it was a timeless approach that could be executed easily, but he also acknowledged that focusing on value would sometimes lead to periods of underperformance. This year, however, his so-called "magic formula" strategy has been flying. Greenblatt enjoys celebrity status in investing. He generated 50% annualised returns at his Gotham Capital hedge fund over the 10 years to 1995. That led to a handful of books describing how he'd managed such spectacular results. One of them - The Little Book That Beats the Market - remains one of the simplest and most compelling investment guides around. In it, Greenblatt argues that anyone who really wants to beat the market shouldn't rely on professionals or academics for help. He said the best option was to "do it yourself". With this in mind, he set out a straightforward strategy that looks for both appealing value and quality in stocks across the market. To do it, he used just two simple ratios: the earnings yield as a measure of "cheapness" and return on capital as a measure of "quality". A focus on value and quality Earnings yield tells you how much profit a company is making in relation to its underlying value. To take account of varying levels of cash and debt in companies, a widely used way of working it out is to divide what the company earns in operating profit by its total valuation (known as the enterprise value). You can then apply this earnings yield to every company in the market to see which are offering the best value - the higher the yield, the cheaper the company and the more bang you get for your buck. Return on capital is a leading indicator of good quality companies that can grow profitably, the return on capital focuses on how good a company is at generating a profit from the investment it makes in itself. Good quality companies are very efficient at delivering high-percentage returns from the cash they reinvest to grow - it might be opening new stores, expanding product lines or buying new plant and equipment. The return on capital is the percentage improvement in profits relative to that investment. That makes it a leading indicator of good quality companies that can grow profitably. Greenblatt's strategy scores every company on each ratio and then adds the scores together to get a magic formula for each one. The beauty of this approach is that you can rank the market for companies with the best blend of cheapness and quality and always find results. Ranking the market While Greenblatt claimed some impressive returns from these rules, he recognised that the system would still suffer periods of underperformance. Investors would need to stick with the strategy over a number of years to enjoy the returns he promised. graph 1 Tracking of the magic formula strategy by Stockopedia shows that this has certainly been the case. But in 2016, we've seen a useful 12% return, and a particularly strong run against the market over the past six months. It appears that this quality and value strategy is finding a sweet spot in current market conditions. To get an idea of the kinds of companies with high magic formula scores right now, we've reproduced the current list. The table includes Greenblatt's magic formula expressed as a more understandable percentile ranking, where zero is worst and 100 is best. Name Mkt cap £m 'Magic formula' rank % ROC % Greenblatt Earnings Yield % Sector Wincanton 275.3 97.1 128.3 27.7 Industrials RM 101.7 96.7 112.1 24.7 Industrials Gama Aviation 53.7 96.6 91.7 23 Industrials XLMedia 196.3 96.5 696.1 13.7 Consumer Cyclicals Harvey Nash 46.9 96.5 120 17.9 Industrials Air Partner 47.3 96.3 239.1 14 Industrials Communisis 77.5 96.2 78.3 21 Industrials Character 94.1 96.2 109 15.9 Consumer Cyclicals Wizz Air Holdings 969.8 95.7 49.6 79.4 Industrials InterContinental Hotels 6,569 95.6 148.4 13.4 Consumer Cyclicals One interesting aspect of the results is that the magic formula picks up companies that are both flying and falling. There have been positive price moves this year in stocks like Wincanton (WIN), XLMedia (XLM) and Air Partner (AIR). But equally, some prices have been under pressure, which of course can make the valuations of good quality stocks more appealing. Some of those include RM (RM.), Harvey Nash (HVN) and Character (CCT). Waiting for the magic to happen In the years since Greenblatt introduced the magic formula, there has been a great deal of analysis about how (and whether) it actually works. He always acknowledged that it was a difficult strategy for investors to follow consistently because, he said, it lacks excitement and it requires patience. That's an observation that can be applied to many value-focused investing strategies. But in recent months, the magic formula has shown that it can perform extremely well. About Stockopedia Interactive Investor's Stock Screening series is written by Ben Hobson of Stockopedia.com, the rules-based stockmarket investing website. You can click here to read Richard Beddard's review of Stockopedia.com and learn more about the site. ● Interactive Investor readers can enjoy a completely FREE 5-day trial of Stockopedia by clicking here. It's worth remembering that these and other investment articles on Interactive Investor are simply for generating ideas and if you are thinking of investing they should only ever be a starting point for your own in-depth research before making a decision. *No fee for publication is involved between Interactive Investor and Stockopedia for this column. Ben HobsonAbout the Author Ben Hobson is Investment Strategies Editor at Stockopedia.com. His background is in business analysis and journalism. Ben researches and writes regularly on investment strategy performance and screening ideas for Stockopedia.com. He is the author of several ebooks including "How to Make Money in Value Stocks" and "The Smart Money Playbook" This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.