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Highlights
- The energy and resource sector is under pressure due to the economic slowdown in the country.
- Investors are cautious of investing in the sector due to its highly speculative nature.
When it comes to investing in stocks, investors aim to find market-beating opportunities. However, the unpredictability and volatility of stock markets make it necessary to conduct thorough research and due diligence before investing in them. The war between Russia and Ukraine and the geopolitical tensions surrounding it has pushed up the prices of almost everything, causing the worst economic slowdown in decades and forcing international organisations like the World Bank and the International Monetary Fund (IMF) to downgrade the growth outlook.
How is the energy and resource sector faring?
This slowdown has, in turn, put huge pressure on the energy and resource sector, as it is cyclic in nature and reflects the state of the economy. The sector was already struggling due to the pandemic, and the war and subsequent supply chain disruptions mean that it will need more time to fully recover from the setbacks. Since the sector is highly speculative, investors should choose the right mix of stocks to make a profit from it.
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Recently, a few energy and resource stocks in the UK were in the spotlight. Let us take a look at their performance and see if they can be good investment bets.
Vaalco Energy Inc (LON:EGY)
The US-headquartered energy company is involved in the exploration and production of crude oil, and its properties are located in West Africa's Gabon and Equatorial Guinea. On Tuesday, the company made an announcement that in the Etame field, offshore Gabon, it has successfully completed the Avouma 3H-ST development well.
Vaalco reported strong performance in the fourth quarter of 2021, with a net income of $34.4 million. The net income for the whole year stood at $81.8 million. Its market cap as of 27 April 2022 stands at £323.10 million, and it has given a return of 194.28% to its shareholders in the last one year, while the year-to-date return stands at 138.98%. Vaalco's share price stood at GBX 525.00 as of 8:12 am GMT+1 on 27 April 2022.
Galileo Resources (LON:GLR)
The UK-based mining firm is engaged in the exploration of metals like gold, manganese, iron ore, and copper. The company on Tuesday announced that it had commenced the exploration of gold and lithium projects in Southwest Zimbabwe.
Galileo's shares were trading at GBX 1.20, up by 6.79% at 8:48 am GMT+1 on 27 April 2022. The company's market capitalisation currently stands at £12.44 million. Galileo's stock has given a return of 22.67% on a year-to-date basis.
Altus Strategies (LON:ALS)
The UK-based company is engaged in the development and production of minerals, and its portfolio includes gold, silver, copper, zinc, bauxite, and iron ore projects in Africa. On Tuesday, the company announced 'encouraging gold results' from drilling at its Tabakorole gold project in southern Mali.
Its market capitalisation, as of 27 April, stood at £62.18 million. In the last one year, Altus Strategies' shares have plunged by 22.06%. Shares of the FTSE AIM All-Share constituent were trading flat at GBX 53.00 on 27 April 2022 at 8.50 am GMT+1.
Note: The above content constitutes a very preliminary observation or view based on market trends and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks.
