21 April 2022

Welcome to a new issue of Stock Take, your weekly read about the share markets.

Market Summary

The European Union is preparing to place either an immediate or gradual ban on Russian oil. This means the prices of world oil will skyrocket. An immediate ban would cut Russian oil supply by four million barrels per day, and prices could be expected to rise by 65% to US$185 per barrel.

In terms of investment, oil ETFs such as iPath Pure Beta Crude Oil ETN (OIL) or the United States Oil Fund (USO) could potentially have a short-term upswing if the European Union decides to move forward with a ban.

We suggest keeping an eye out for any news about this that can be capitalised on.

Tip of the Week

The volatile nature of the share markets of late has meant we’ve only issued sell recommendations in the past week and have not issued any buy tips.

Of the three sell tips we’ve issued, Regis Resources (ASX: RRL) has benefited from the rapid increase in gold prices due to current geopolitical tensions and inflationary pressures, making it a profitable trade.

Trustpower (NZX: TPW) and Group 1 Automotive (NYSE: GPI), on the other hand, have not performed as expected, having been affected by rising interest rates and an unexpected period of weakness, respectively. These are signs to sell the stocks to stop any further losses.

Top Tips

Food and drink supplies are being impacted by both Covid-19 and conflict. The consequences of these – such as rising prices – are making food and drink one of the more popular industries to invest in at the moment.

Here are two of our best performing food and drink companies over the past six months, plus one where we didn’t get it quite right but issued a stop loss to help investors mitigate the impact of the price reduction.

See the performance of all tips here.

NB: These are examples of just some of Stockfox trading recommendations. They are not a reflection of the success of all Stockfox tips, nor are they necessarily an indication of the success of any future Stockfox tips. If you act on our advice, there is no guarantee as to the repayment of your investment or any particular rate of return.