Fantastic 3D, but where do I invest?

I'm a great fan of 3D movies, and have recently taken my family to see 'The Hobbit' and 'The Life of Pi' at our local cinema. I can thoroughly recommend both films.

Over the past year or two I have seen a number of newspaper articles that suggest that the 3D revolution is over hyped. I disagree. Personally, I won't go to the cinema to watch a film that isn't in 3D. I absolutely love the experience, and I'm sure I can't be the only one.

Critics have noted that some 3D movies have not attracted the expected audiences and that consumers are opting for the 2D versions. Sales of 3D TVs have been sluggish. Two simple reasons I'd suggest: cost and content. 3D movies are far more expensive than there 2D version counterparts, and 3D TVs are still expensive with content sparse. The past few years have been exceptional economic times with low consumer confidence, but world growth will eventually gather momentum and, in my opinion, so will the 3D revolution. But where to invest?

A company that has been on my radar for some considerable time is DDD group which describes itself as follows:-

"DDD transforms the visual experience by bringing 3D to the consumer. Its TriDef(TM) 3D solutions convert 2D to 3D automatically, and enable delivery to 3D TVs, PCs and mobile devices. Leading brands including Intel, Samsung, LG Electronics and Sony license these solutions. Over 20 million TriDef 3D products have been shipped by DDD's licensees worldwide. DDD's Yabazam! label delivers 3D everywhere with its online content portal and Smart TV apps."

DDD is a growing company with a terrific client list (see above) and market leading technology, it's just turned a maiden profit and has a solid balance sheet and gross margins currently running at 96%. Revenues were up 74% in the 6 months to June at $4m with EPS at 0.06c. So why haven't I bought any?

With a current market cap. of £30m it's a bit too expensive for my tastes at the moment. However, should a suitable opportunity arise then I'll be a keen buyer.

Please note I can also be found on twitter at :-

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Something on my mind

Sometimes it's easy to become preoccupied with certain events at a company, and forget about some important details that are currently unresolved.

Readers will know that I'm a great fan of Avesco, and believe the company to be undervalued on any number of measures with or without a payout from Disney.

Recently of course like most shareholders I've been eagerly anticipating the 2012 results (due in a week or two) and any news associated with the Disney case. However, something else is on my mind.

At the June interims, Ian Martin the CEO of the company stood down from the board after ten years. Nothing too surprising there perhaps, but that was 6 months ago and they haven't yet found a replacement unless they are waiting to announce the new incumbent with their final results?

I re-read the interim statement again today where Richard Murray (Chairman) states the following:-

"Ian Martin, the Chief Executive, has decided to step down from the Board and leave the Company to pursue other interests and opportunities. I have known Ian for a long time and since I asked him to come to Avesco ten years ago, we have worked closely together to build Avesco into a truly international business. With that work complete, we both knew the time was right for the Company to make a change. The parting has been amicable. I would like to thank Ian for his real contribution and leadership over the years. I know he wishes everyone at Avesco well and expects the Company to continue to go from strength to strength. The Board has asked me to dedicate more time to the business pending a decision regarding a replacement."

I am now intrigued by this line :- "...pending a decision regarding a replacement". Lots of different interpretations in those few words methinks.

I recently held shares in a company called Zetar which I have mentioned on this blog. It was recently subject to a takeover. Not long before the takeover approach Zetar announced this unexpected bit of news:-

"Our Chairman, David Williams, has announced his intention to step down from the Board at the forthcoming AGM. David played a pivotal role in the flotation of Zetar as an AIM listed company and has helped it to grow from a single GBP50m confectionery company to a confectionery and snack group with sales last year of GBP128m. The Board and, in particular, the Executives who have worked with him from Zetar's inception, would like to express their gratitude for all his guidance, support and the intuition he has demonstrated over these seven years and wish him every success for the future."

Umm........

I'm probably putting 2 and 2 together here to make 5, but make no mistake Avesco is cheap and is currently priced at less than twice this year's expected EBITDA. It's also worth remembering that Taya Communications are a 29.9% controlling shareholder and may eventually want to cash in their chips, so to speak, by selling the company on at some stage, although I have no insight into their long term intentions. Avesco attribute little intangible value to their company even though they have numerous prestigious clients. The current market cap. is little above the tangible value of their assets. As I said, cheap on any number of measures.

Clearly, the Disney case will need resolving one way or another, given the size of the possible payout, but once that's out the way....?

Anyway, just my idle thoughts which could be considerably wide of the mark.

As ever no advice is given or intended.

Good luck with your investing and if you need any good books to help, the link below takes you to my recommended reads:-

http://astore.amazon.co.uk/httpmichae1mb-21

Digital Barriers

Just for future reference, my twitter page is https://twitter.com/michae1mouse which I use to notify readers when my blog has been updated.

Just a few news stories released today. The company that I 've just a had quick look at is Digital Barriers which describes itself as a specialist provider of advanced surveillance technologies to the international homeland and defence markets. The news story that grabbed my attention was a RNSNON that detailed three new contract wins with a total value of £1.05m.

After a cursory glance, Digital Barriers looks an interesting potential growth company and the share price has been steadily moving upwards from a low in November this year.

Technical analysts may identify the up trend as a possible trading opportunity? The share price has advanced a further 3.9% today.

Reading further down the news stories, I noticed that six Directors had recently purchased £234,479 worth of shares in the company at £1.45. Further inspection reveals that this was their participation in a recent placing to raise £10m "to finance the acquisition of a fourth core technology".

All good so far. However, this led me to have a quick glance at the financials. The current market cap. is £70.5m and at the interim stage, whilst revenue has grown by an impressive 68%, the company made an adjusted loss of £5m. Whilst they still had £7m+ cash on the balance sheet (pre-placing), cash burn for the six months was a whopping £8m.

Some many fancy the potential growth story here and wish to research further, but for me it would take a huge leap of faith and it certainly won't be on my monitor at this stage in its development.

Good luck with your investing and if you need any good books to help, the link below takes you to my recommended reads:-

http://astore.amazon.co.uk/httpmichae1mb-21