Sovereign Oilfield Group - needs to do more to impress the market
Good news this week from Sovereign Oilfield Group, the AIM quoted Aberdeen-based diversified oilfield services group, which announced a variety of contract wins with a combined value of more than £4 million.
We participated in the float of Sovereign in September 2005 at a price of 140p and saw the share price move up to as high as 277 in May 2006.
The market remained largely unimpressed with the share price barely budging.
With the shares trading at c17x 2007 broker estimates one can conclude that it is all in the price at this stage. Even the house broker concluded that ‘the shares as up with events in the short term’.
Sovereign is clearly going to have to produce a lot more to really convince the market.
I would particuarly like to see its Prodrill division really start show some growth potential. After all, investors are buying into Sovereign as a business with the potential for high growth (we can go for one of the bigger oil services players otherwise) and it's tough if a key operating entity remains a bit of a passenger.
We participated in the float of Sovereign in September 2005 at a price of 140p and saw the share price move up to as high as 277 in May 2006.
The market remained largely unimpressed with the share price barely budging.
With the shares trading at c17x 2007 broker estimates one can conclude that it is all in the price at this stage. Even the house broker concluded that ‘the shares as up with events in the short term’.
Sovereign is clearly going to have to produce a lot more to really convince the market.
I would particuarly like to see its Prodrill division really start show some growth potential. After all, investors are buying into Sovereign as a business with the potential for high growth (we can go for one of the bigger oil services players otherwise) and it's tough if a key operating entity remains a bit of a passenger.