Angle, UBC Media, Avesco and Trakm8

Apologies to regular readers of my blog, but life is very hectic at the moment, and consequently writing my blog is not top of my priority list. However, the next couple of weeks should prove a very interesting time for four of the companies in my portfolio.

Firstly, I have written several times about my speculative investment in Angle which has done considerably well this year, and was my entry into the 2013 shares likely to gain 100% or more (a challenge on one of ADVFN's bulletin boards). Well it's done better than that. The shares were languishing in the high 20's in January, but now stand at around the 80p mark.

As previously mentioned this is essentially a speculative investment based on the company achieving success with its Parsortix device, and certainly the company appears to be delivering on it's promises. I have high hopes for this product, and if it can gain traction in it's potential markets in the near future (subject to the relevant regulatory approvals anticipated this year) then growth could be spectacular.

Friday brought excellent news with the sale of their stake in Geometrics, a graphics technology developer, to ARM holdings. The sale brings in £6.2m to Angle and effectively erases any need for funding in the near future, and refocuses the group as a specialist medtech company. The available additional financial resources will be used for its Parsortix non-invasive cancer diagnostics business.

The shares rose modestly on Friday, but I expect this is largely due to investors being unaware of the significance of this event. It would be fantastic if Angle could now go it alone and successfully bring this product to market. This would be the most lucrative option for investors, although clearly the most risky since there are always potential banana skins at such an early stage - not least capturing market share before serious competition arrives on the scene. Earlier bid rumours appear to have quietened down in recent weeks, but Angle is now essentially a one product company (albeit with enormous potential) and I fully expect that suitors for the company will emerge in the not too distant future.

Angle's sale of Geometrics brings me on to UBC Media.

I must confess that I hadn't looked at the Geometrics balance sheet, but I believe revenues were in the hundreds of thousands rather than millions. Arm appear to have paid £20m for Geometrics (I believe Angle held a 31% stake) which is a pretty hefty price, but indicative of the heady prices that can be paid for small companies with the right technology at the right time.

Tomorrow should bring news of developments in UBC's reverse takeover of 7digital. There is no guarantee that the two companies will have come to any agreement at all, but if they have then this could add further excitement to what I believe was an already potentially interesting story.

At the same time that UBC announced their proposed acquisition, they also released their interim results which were very encouraging. Not least the explosive growth of the social media site Audioboo.

From the interims :- "During the last 12 months the growth in traffic at Audioboo has been particularly impressive, with registered users more than tripling from 600,000 to 1.9 million. The level of consumption of audio on the platform has also increased: 12 months ago, the number of audio clips listened to in October was 4 million, this year in the equivalent month it was 22 million. Perhaps more significantly, the company has now implemented the technology to monetise this listening; content owners can opt to be part of an advertising network on Audioboo with pre-roll and display advertising associated with their clips. Revenues are shared between the content owners and Audioboo."

Interestingly, in the weekend FT their was an article about Beyoncé releasing her latest album in digital format only and relying on social media sites to alert her fan base. This appears to have worked extremely well, and clearly emphasises the prominence that social media will have in the future.

We will see what tomorrow brings, but potential synergies between UBC Media, 7Digital and Audioboo sound very exciting to me. Of course the devil will be in the detail of the acquisition, but I'd hope with Imagination Technologies being a large shareholder in both companies, the deal should be a fair one for all parties concerned, if indeed it goes ahead.

The next two weeks should also bring news of the return of cash (£1.10 per share) to shareholders in Avesco, and more details of the potential transaction (again if this has been agreed?). The more I've thought about it, the more I'm convinced that this is more likely to be a sale of assets rather than a purchase. Surely, if it was an acquisition then there would have been no need to delay the details of the return of cash? However if they are selling the company (or part of the company) then of course it makes sense since the sale price is inextricably linked to the share price post distribution of the funds i.e. they would need to detail NTAV etc. post shareholder payout to fully explain an agreed sale price. Of course I might be wrong, but we shouldn't have to wait too long for news.

Finally, I expect Trakm8 to release their interim results this month (they are usually released in November or December). Of course these won't include figures for the enlarged group, but they will give an indication of how well Trakm8's market's and market share are developing and they should give some indication of how the acquisition of BOX is bedding in, and what current trading is like for the enlarged group.

As ever, no advice is intended or given.

Synety - A very promising speculative stock?

Synety, a UK software and telco company specialising in the provision of cloud based telephone call-control systems looks a very interesting speculative investment, and relatively recently I added this company to my current portfolio of shares, although I might add that it was a fairly modest purchase.

On many levels the company doesn't meet my usual criteria, not least because at the interim stage of this year the company made an operating loss of £1.3m and revenues were just shy of £200,000. At first glance, not exactly mouth watering I'll admit.

So why did I buy shares in this outfit? Well firstly, on the day of the interim results, I noticed that they had also raised £2.1m in a placing with institutional investors for the following reasons:-

"The net proceeds of the Placing will be used to expand the Company's UK sales force and customer services team, expand and strengthen the technology platform with disaster recovery features and provide general working capital for the Company to capitalise on its first-mover advantage and land grab a market niche where the Directors believe there is limited competition and significant potential."

The placing was at 150p per share, and the sentence highlighted in bold and subsequent developments enticed me to invest at about these same levels.

The trading update in September was very encouraging where they said that there had been a 30% increase in recurring revenue in 2 months, and growth is expected to continue at a faster pace.

Simon Cleaver the Executive Chairman said, "In the 6 months since we provided a trading update at the time of the Company's 2012 preliminary results statement, we have begun to see a much clearer, and very exciting picture emerging of market demand and potential for CloudCall."

The key performance indicators in the two months from June 2013 to August 2013 do look very impressive indeed, and annualised recurring revenue is now running at close to £500,000.

Cleaver finishes the update with the following:-

"There is every indication, as I have reported before, that we have a product offering that is capable of extensive rollout. Consequently, we have considerable confidence in both the short and longer term prospects for the Company."

To back up his confidence in the company, Cleaver and two other Directors have been recent buyers of the shares.

The company appears to have hit a very rich vein of growth, and if they are successful with their "land grab" opportunity then this could be a stellar performer.

With a market cap. of just £11m, whilst it doesn't look immediately cheap on fundamentals, in the context of it's growth potential and when compared to the valuations of many "trendy" tech companies at the moment, the current share price of 180p may well prove to be somewhat of a snip. We shall see.

As ever, no advice intended or given.

Ultrasis - Beating the blues?

Ultrasis, a provider of interactive health care services, also features in this weekend's FT. Investors who bought shares early this year when the share price hovered just above 0.2p will be sitting on very healthy paper profits indeed.

http://www.ft.com/cms/s/0/3c83aa18-4323-11e3-9d3c-00144feabdc0.html?siteedition=uk#axzz2jV2hHMc1

It's not a company I'm familiar with, and a quick look through it's financials doesn't inspire me to buy shares in the company. From what I can see revenues and profits have steadily fallen over the past five years, and indeed the company was loss making in 2011 and 2012.

Whilst they have recently won a new, possibly lucrative contract, the financial details of the contract have not been disclosed.

Losses at the interim stage of 2013 have continued and the balance sheet doesn't look very strong.

What would also concern me is that they appear to have just acquired a £0.5m revenue company with a pre-tax profit of just £91,000 for nearly £5m. Ultrasis itself is currently valued at £18.5m.

I might be missing something here, and "Beating the Blues" might be a massive booster to revenue and earnings in the future, but with revenue of just £480,000 at the interim stage, there's an awful lot of expectation already priced in.

As ever, no advice intended or given.