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Iran remains a civilisation for now as TACO strikes again. At least for now.
The US and Iran have both agreed to a two-week ceasefire in order to open the Straight of Hormuz, in the first agreement towards ending the conflict rather than escalating it.
Trump has said that the 10-point plan from Iran was a “workable basis” for negotiations. And Tehran has allowed two weeks of safe passage through the waterway whilst the talks for a permanent deal begin.
Naturally, this has seen oil fall and stocks rise. But we are still not out of the woods.
It’s also worth pointing out that despite Iran seeing some heavy attacks, a month ago it couldn’t inflict such economic pain on its allies, and it didn’t control the Strait of Hormuz.
Now it has realised that it can, and now it does.
Iran has said it will take part in the talks for a maximum of 15 days.
So based on previous history, we can expect Trump to ramp up the rhetoric in the days prior, and then do nothing of what he said.
But you never know, and the downside remains high if this situation doesn’t cool down.
ITM Energy
ITM Energy put out a very positive RNS this morning.
The UK government through Great British Energy Group has invested £40 million into the business.
Not only that, ITM has received a letter from the Department for Energy Security and Net Zero (DESNZ) confirming its intention to award ITM a grant of £46.5 million.
This is obviously good news.
And the stock is up in early morning trading.
But often you have to look at what management aren’t saying.
What’s interesting to me, is that despite an expected £86.5 million injection to the business… cash guidance only goes up by £40 million.
Where’s the other £46.5 million?
The company said this:
The Grant remains subject to subsidy control scrutiny, a statutory process required to ensure any public funding complies with the Subsidy Control Act 2022. The subsidy referral was submitted on 7 April and is expected to conclude in June 2026, after which, subject to a satisfactory outcome, the grant would then be contracted.
Now, it could be that the grant is awarded in the next financial year, but there is no mention of an upgrade to cash next year.
There’s also no upgrade to cash in Zeus’s forecasts.
So we have a few options here:
Management doesn’t actually expect to get the grant
The grant is expected but cash burn is up by an equal amount
The company expects the grant but doesn’t expect to get the money until FY28 as a minimum
One of these options must be true, because money tends to not just disappear.
This is one of the nuances I’m looking for when I research stocks, and I’ve done a full walkthrough explainer video here.
I hold a long position in this next stock.
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