Unexpectedly, Friday turned out to be an eventful day for three of my current holdings.
Firstly, on Thursday, One Delta released news that the acquisition through a reverse takeover of Audioboo had been agreed subject to shareholder approval with the new company to be rebranded as Audioboom. Whilst I don't hold shares in One Delta, I indirectly have a proportionate 20% stake in the company through holding shares in UBC Media. One Delta's shares returned to the market on Friday after a period of suspension, and soared over 100% in a day. It's highly speculative of course since the company is not set to make any meaningful revenues in 2014 whilst it concentrates its efforts in rapidly growing the volume of content, investing in technology, increasing the number of registered users, listens-per-user and content partners. At the current share price of 3.625p, the market cap. of the enlarged group would stand at just under £17m which clearly can't be justified on fundamentals, but compared with the multi-billion dollar valuations of other successful social networking sites, it could turn out to be grossly undervalued (Twitter is currently valued at around $22billion).
This is great news for UBC Media holders, Simon Cole, CEO of UBC Media, will become a Non-Executive Director of Audioboom, and UBC will be its largest shareholder with around 20% (including warrants), and bodes well for their own reverse takeover of 7Digital.
7digital have grown revenues 289% over the past five years, and details of the reverse takeover are expected in May (I anticipate that this could be as early as next week) at which time UBC Media shares will return from suspension. It appears that investor appetite for these types of companies remains high, and I expect 7Digital's listing to be very favourably received by the market. Of course there are no guarantees, and we shall just have to wait and see, but I do like the potential synergies that exist between 7Digital, UBC Media and Audioboom.
N.B. Previous blog on UBC Media :-
http://michae1mouse.blogspot.co.uk/2014/03/ubc-media-trakm8-and-synety.html
Sunday, 4 May 2014
Wednesday, 23 April 2014
Biome Technologies - Worth a punt?
One of today's big risers is a company called Biome Technologies following a positive trading update. I didn't recognise the name at first, but when I glanced at the news I noticed that part of the company is Stanelco. I do remember Stanelco, I seem to remember that they were developing some packaging technology some years ago, but were continually making losses. A real jam tomorrow company. I did follow their fortunes for a while, but lost interest. Is Biome Stanelco in disguise or was it acquired? Perhaps someone can help out here?
Anyway, Biome have released a positive trading update today, and the share price has risen accordingly. In fact by 12% whilst I am writing this article.
The company appears to comprise of two divisions:- A 'Bioplastics Division' and 'Stanelco RF Technologies Division'. In today's first quarter update both divisions are trading well ahead of the same period last year with Bioplastics recording revenues of £0.5m (Q1 2013: £0.2m) and Stanelco revenues of £0.6m (Q1 2013: £0.2m). The cash burn during the period is just £0.1m, 'reflecting increased activity, receipt of deposits for the RF Technologies division and working capital movements.' A confident outlook has been expressed for the year as a whole based upon increasing volumes of Biome's materials being procured in the period for use in the US single-serve coffee market amongst other applications, and Stanelco's order book growing in an encouraging manner with 2014 orders now in excess of the revenues achieved in 2013. Activity has now commenced on the recently announced GBP1.5m contract to supply advanced analytical equipment to a customer in a regulated industry.
Looking at last year's results and today's trading statement, revenues are increasing from a very low base and profitability looks some way off. Cash burn in 2013 was significant. However, if they can continue to control the cash burn whilst accelerating sales then this could be an interesting punt.
Tangible assets come in at £4.4m with no debt, against a market cap. of approx. £4m after today's share price rise. Not one where I'll be chasing up the share price, and I'd definitely need to do more research, but interesting nevertheless.
Anyway, Biome have released a positive trading update today, and the share price has risen accordingly. In fact by 12% whilst I am writing this article.
The company appears to comprise of two divisions:- A 'Bioplastics Division' and 'Stanelco RF Technologies Division'. In today's first quarter update both divisions are trading well ahead of the same period last year with Bioplastics recording revenues of £0.5m (Q1 2013: £0.2m) and Stanelco revenues of £0.6m (Q1 2013: £0.2m). The cash burn during the period is just £0.1m, 'reflecting increased activity, receipt of deposits for the RF Technologies division and working capital movements.' A confident outlook has been expressed for the year as a whole based upon increasing volumes of Biome's materials being procured in the period for use in the US single-serve coffee market amongst other applications, and Stanelco's order book growing in an encouraging manner with 2014 orders now in excess of the revenues achieved in 2013. Activity has now commenced on the recently announced GBP1.5m contract to supply advanced analytical equipment to a customer in a regulated industry.
Looking at last year's results and today's trading statement, revenues are increasing from a very low base and profitability looks some way off. Cash burn in 2013 was significant. However, if they can continue to control the cash burn whilst accelerating sales then this could be an interesting punt.
Tangible assets come in at £4.4m with no debt, against a market cap. of approx. £4m after today's share price rise. Not one where I'll be chasing up the share price, and I'd definitely need to do more research, but interesting nevertheless.
Monday, 21 April 2014
The low p/e, small cap., high yielders vs. FTSE all-share
In January I started a study to see how a small portfolio of low p/e, small cap., high yielders would perform against the FTSE all-share index. The nine selected shares are listed in the link below:-
http://michae1mouse.blogspot.co.uk/search?updated-max=2014-01-06T12:56:00-08:00&max-results=3&start=12&by-date=false
Whilst I don't own shares in any of the nine companies, I did make some initial observations after some cursory research which can be seen in subsequent blogs:-
http://michae1mouse.blogspot.co.uk/2014/01/21st-century-technology-plc.html
http://michae1mouse.blogspot.co.uk/2014/01/fairpoint-and-h-group.html
http://michae1mouse.blogspot.co.uk/2014/01/ms-international-and-hydro-international.html
http://michae1mouse.blogspot.co.uk/2014/02/quarto-group-tandem-and-walker-crips.html
So how is this portfolio performing so far? Well whilst the FTSE-all share has fallen from 3605 to 3554, a 2.3% decline, the value portfolio has got off to a flying start, and is up 10.1% for the year to date. In fact just three of the selections are showing a loss whilst the other six have made impressive gains.
The star performer is Tandem with a gain of 40%. This has been driven by the release of better than anticipated end of year results and a positive outlook. Whilst revenues and EPS were down on last year, as expected, the dividend payment has been hiked by 4.5% and they state that revenue for the first quarter is well ahead of the corresponding period in the prior year.
The next best performer is MS International with a 16.1% gain. I can't see any specific company news to have driven the share price forward, but there have been some confidence boosting Director purchases.
Fairpoint has currently recorded a gain of 15%. Fairpoint recently released a good set of prelims. where, although revenues were slightly down, adjusted EPS had improved, they reported strong cash flow and improved the dividend pay-out by 9%.
An encouraging trading statement from Walker Crips has driven the share price 13.4% higher and Director purchases appear to have added to the growing confidence.
H&T has gained a respectable 9%. This was even better until recently when an expected bargain basement purchase of certain assets from Albermarle and Bond fell through. H&T also released their final results where they reported on a challenging year with EPS falling 63% and a reduced dividend (60%) to 4.8p. More positively, net debt had been reduced by 25% to £20.7m.
Quarto Group recorded a more modest gain of 4.6%. Following a challenging year, the group appears more confident about the outlook, they remain focussed on debt reduction, maintained a generous dividend and have recently entered into a joint venture with a Brazilian distributor.
Bisichi Mining is little changed with no notable news flow.
Hydro International is down 4% following final results where EPS halved to 5.15p. They predict a difficult year in 2014, although the dividend was maintained and longer term the management appear confident about the growth prospects.
Finally, the worst performer to date is 21st Century Technology which has lost 12%. Whilst there has been no new news, it appears that the value investor Peter Gyllenhammar has been unwinding his significant percentage holding in the company. The share price has risen a little in the past week or so following his disposal.
It's early days yet, and I'll try to revisit the performance of the portfolio on a fairly regular basis, but certainly it's got off to a flying start in 2014.
http://michae1mouse.blogspot.co.uk/search?updated-max=2014-01-06T12:56:00-08:00&max-results=3&start=12&by-date=false
Whilst I don't own shares in any of the nine companies, I did make some initial observations after some cursory research which can be seen in subsequent blogs:-
http://michae1mouse.blogspot.co.uk/2014/01/21st-century-technology-plc.html
http://michae1mouse.blogspot.co.uk/2014/01/fairpoint-and-h-group.html
http://michae1mouse.blogspot.co.uk/2014/01/ms-international-and-hydro-international.html
http://michae1mouse.blogspot.co.uk/2014/02/quarto-group-tandem-and-walker-crips.html
So how is this portfolio performing so far? Well whilst the FTSE-all share has fallen from 3605 to 3554, a 2.3% decline, the value portfolio has got off to a flying start, and is up 10.1% for the year to date. In fact just three of the selections are showing a loss whilst the other six have made impressive gains.
The star performer is Tandem with a gain of 40%. This has been driven by the release of better than anticipated end of year results and a positive outlook. Whilst revenues and EPS were down on last year, as expected, the dividend payment has been hiked by 4.5% and they state that revenue for the first quarter is well ahead of the corresponding period in the prior year.
The next best performer is MS International with a 16.1% gain. I can't see any specific company news to have driven the share price forward, but there have been some confidence boosting Director purchases.
Fairpoint has currently recorded a gain of 15%. Fairpoint recently released a good set of prelims. where, although revenues were slightly down, adjusted EPS had improved, they reported strong cash flow and improved the dividend pay-out by 9%.
An encouraging trading statement from Walker Crips has driven the share price 13.4% higher and Director purchases appear to have added to the growing confidence.
H&T has gained a respectable 9%. This was even better until recently when an expected bargain basement purchase of certain assets from Albermarle and Bond fell through. H&T also released their final results where they reported on a challenging year with EPS falling 63% and a reduced dividend (60%) to 4.8p. More positively, net debt had been reduced by 25% to £20.7m.
Quarto Group recorded a more modest gain of 4.6%. Following a challenging year, the group appears more confident about the outlook, they remain focussed on debt reduction, maintained a generous dividend and have recently entered into a joint venture with a Brazilian distributor.
Bisichi Mining is little changed with no notable news flow.
Hydro International is down 4% following final results where EPS halved to 5.15p. They predict a difficult year in 2014, although the dividend was maintained and longer term the management appear confident about the growth prospects.
Finally, the worst performer to date is 21st Century Technology which has lost 12%. Whilst there has been no new news, it appears that the value investor Peter Gyllenhammar has been unwinding his significant percentage holding in the company. The share price has risen a little in the past week or so following his disposal.
It's early days yet, and I'll try to revisit the performance of the portfolio on a fairly regular basis, but certainly it's got off to a flying start in 2014.
Subscribe to:
Posts (Atom)