OMIP (One Media IP) is not a company I've written about before on my blog, but I have briefly commented on ADVFN.
https://uk.advfn.com/forum/search?q=michaelmouse&post_poster=on&post_post=on&index=posts&thread_id=28458514
I bought into this micro-cap at prices around 3.5p, and took my original stake off the table when the share price doubled in a very short time frame. I've left the profit to run for the long term. The re-rating was chiefly due to a return to profitability and cash flow generation and significantly aided by "so-called" heavyweights Michael Grade and Ian Dunleavy joining the board of Directors.
The company appealed to me because of it's lowly valuation at the time, alongside it's past ability to generate healthy profits, cash flow and pay a dividend. It was also debt free. All the signs were that after a temporary hiatus OMIP was returning to growth which has now been confirmed by recent results. A lovely, overlooked little company in other words. I took out my original stake after the share price had doubled simply because I couldn't see how they could significantly ramp up growth without a larger war chest.
All that changed yesterday with an over subscribed fund raise and debt financing which will enable the company to acquire the rights to more valuable music catalogues that they can then monetise.
https://uk.advfn.com/stock-market/london/one-media-OMIP/share-news/One-Media-iP-Group-Plc-Proposed-Fundraise-of-a-min/78169362
https://uk.advfn.com/stock-market/london/one-media-OMIP/share-news/One-Media-iP-Group-Plc-Results-of-the-Placing-and/78174779
This is an exciting development, although with added risk because of the debt funding. However, with the expertise they have available, I can imagine that any purchases will be very prudent and have the potential to significantly enhance earnings in future. It's also worth keeping your eye on their TCAT services sales which are used to monitor music conflicts and potential copyright infringements. Sales are in their infancy but there is excellent potential here also.
The placing price of 6p announced yesterday was disappointing but only in the context of the
recent share price, and my remaining holding is still 82% in profit and a "free" ride.
OMIP will now be a very long term hold for me, and will hopefully offer significant upside from
here, but as ever DYOR.
Saturday, 1 September 2018
Sunday, 26 August 2018
Is 7digital's partnership with SoundHound the game-changer?
I've mentioned 7digital's partnership with SoundHound a number of times in the last few months on the ADVFN thread e.g.
https://uk.advfn.com/cmn/fbb/thread.php3?id=32540870&from=3208#firstpost
http://about.7digital.com/news/7digital-partners-soundhound-inc
Essentially they provide a voice first AI interface which can be white labelled for sectors like automotive, IoT, consumer products and enterprise services.
For those interested in 7digital (7digital and SoundHound Inc. are developing digital music solutions for customers around the world), it's worth a minute or two reading this article:-
https://www.forbes.com/sites/johnkoetsier/2018/05/03/build-your-own-alexa-soundhound-just-got-100m-from-tencent-to-give-every-brand-an-ai-driven-voice/#65298a5f4048
The list of SoundHound's backers and clients give some idea of the possible scale of the opportunity for their technology, but also for 7digital.
Interestingly, the article says, "If Walmart decided it needed an Alexa competitor to meet Amazon head-on, SoundHound could help."
Now who else has mentioned Walmart in recent interviews? Well 7digital's very own Simon Cole.
This could get very interesting hopefully, but as ever it's important to do your own research.
https://uk.advfn.com/cmn/fbb/thread.php3?id=32540870&from=3208#firstpost
http://about.7digital.com/news/7digital-partners-soundhound-inc
Essentially they provide a voice first AI interface which can be white labelled for sectors like automotive, IoT, consumer products and enterprise services.
For those interested in 7digital (7digital and SoundHound Inc. are developing digital music solutions for customers around the world), it's worth a minute or two reading this article:-
https://www.forbes.com/sites/johnkoetsier/2018/05/03/build-your-own-alexa-soundhound-just-got-100m-from-tencent-to-give-every-brand-an-ai-driven-voice/#65298a5f4048
The list of SoundHound's backers and clients give some idea of the possible scale of the opportunity for their technology, but also for 7digital.
Interestingly, the article says, "If Walmart decided it needed an Alexa competitor to meet Amazon head-on, SoundHound could help."
Now who else has mentioned Walmart in recent interviews? Well 7digital's very own Simon Cole.
This could get very interesting hopefully, but as ever it's important to do your own research.
Thursday, 19 July 2018
A share sale and a cautionary note
I haven't posted on my blog since April for the many reasons that I have already outlined. However, here's a brief update on a fairly recent share sale. The company in question is Cloudcall. It's been a love/hate relationship with this particular company as outlined in my previous blog post over a year and a half ago. Here's the link below:-
http://michae1mouse.blogspot.com/2016/11/another-bad-call.html
As you can see I originally bought shares at around 150p, and perhaps against my better judgement at the time, bought more at prices around 55p. The company had become unloved and many investors abandoned ship thinking all was lost. That is generally the best time to purchase your shares. In the case of Cloudcall, it was a fairly speculative investment and hence I bought a relatively modest holding for me.
In recent weeks, I've taken profits. Overall, I made a healthy 103% profit. Not stellar but I'm happy given it was never a conviction buy.
Whilst all of the bull points I outlined in my previous posts still exist, and the company still appears to be achieving excellent growth, I sold for the following reasons.
I currently sense that some overlooked value/growth stocks offer better value and I felt this week's trading statement was a tad underwhelming relative to a market cap of more than £30m (predicted revenues of just £9m in 2018, still burning cash and making losses). Whilst revenue was up 31% on a comparable basis to H1 2017, from memory it was only up around 11% from H2 2017. Not as impressive, although reasons were given and I assume that they still expect to hit market expectations. In summary progress is slower than I had hoped.
If Cloudcall goes onto multi-bag from here then that would be great for holders, but of course there are always opportunities elsewhere, particularly amongst the micro and small cap companies.
The cautionary note is this. The bull market has been running for a long time now. It may have further to run. We haven't seen irrational exuberance yet, although some instances are now beginning to emerge.
Even experienced investors become complacent in long bull runs and begin to believe that this is the norm. It's not. Firstly, think about interest rates. They are still at historic lows. Even a 1 or 2 point rise from here would be alarming to some people. Those of us old enough to remember have seen interest rates at 10%-15%. Even 3%-5% may send shudders down the spine of some people. 3%-5% would be more normal.
As regards the stock market, my major concern is that many investors have got used to growth stocks on heady p/e values of 50 or worst still are valuing early revenue stocks on multi-million pound capitalisations before their business models have even been proven. Even for growth stocks, a p/e of 25-30 is pretty heady since it implies that they'll increase profits by 25%-30% year in year out. Asos is the exception that proves the rule (although it looks like growth at Asos is now beginning to slow). If growth slowed to let's say 15% a year at Asos and the p/e dropped to 25 then based on 2017 earnings it's share price would plummet to £19.30. Now if you bought Asos early and sold recently then no doubt you're a multi-millionaire that doesn't give a monkey's, but I've used the current share price as an illustration of what happens when growth slows or in some cases doesn't materialise at all.
Finally, back to Cloudcall, I often ask myself would I now buy this company at this market cap. given the current information. The answer was no and I sold. Of course it does depend on your long term view re:possible growth, but as already mentioned, I perceive better opportunities may lie elsewhere.
As ever, it's a personal blog and my opinions are not meant as advice.
http://michae1mouse.blogspot.com/2016/11/another-bad-call.html
As you can see I originally bought shares at around 150p, and perhaps against my better judgement at the time, bought more at prices around 55p. The company had become unloved and many investors abandoned ship thinking all was lost. That is generally the best time to purchase your shares. In the case of Cloudcall, it was a fairly speculative investment and hence I bought a relatively modest holding for me.
In recent weeks, I've taken profits. Overall, I made a healthy 103% profit. Not stellar but I'm happy given it was never a conviction buy.
Whilst all of the bull points I outlined in my previous posts still exist, and the company still appears to be achieving excellent growth, I sold for the following reasons.
I currently sense that some overlooked value/growth stocks offer better value and I felt this week's trading statement was a tad underwhelming relative to a market cap of more than £30m (predicted revenues of just £9m in 2018, still burning cash and making losses). Whilst revenue was up 31% on a comparable basis to H1 2017, from memory it was only up around 11% from H2 2017. Not as impressive, although reasons were given and I assume that they still expect to hit market expectations. In summary progress is slower than I had hoped.
If Cloudcall goes onto multi-bag from here then that would be great for holders, but of course there are always opportunities elsewhere, particularly amongst the micro and small cap companies.
The cautionary note is this. The bull market has been running for a long time now. It may have further to run. We haven't seen irrational exuberance yet, although some instances are now beginning to emerge.
Even experienced investors become complacent in long bull runs and begin to believe that this is the norm. It's not. Firstly, think about interest rates. They are still at historic lows. Even a 1 or 2 point rise from here would be alarming to some people. Those of us old enough to remember have seen interest rates at 10%-15%. Even 3%-5% may send shudders down the spine of some people. 3%-5% would be more normal.
As regards the stock market, my major concern is that many investors have got used to growth stocks on heady p/e values of 50 or worst still are valuing early revenue stocks on multi-million pound capitalisations before their business models have even been proven. Even for growth stocks, a p/e of 25-30 is pretty heady since it implies that they'll increase profits by 25%-30% year in year out. Asos is the exception that proves the rule (although it looks like growth at Asos is now beginning to slow). If growth slowed to let's say 15% a year at Asos and the p/e dropped to 25 then based on 2017 earnings it's share price would plummet to £19.30. Now if you bought Asos early and sold recently then no doubt you're a multi-millionaire that doesn't give a monkey's, but I've used the current share price as an illustration of what happens when growth slows or in some cases doesn't materialise at all.
Finally, back to Cloudcall, I often ask myself would I now buy this company at this market cap. given the current information. The answer was no and I sold. Of course it does depend on your long term view re:possible growth, but as already mentioned, I perceive better opportunities may lie elsewhere.
As ever, it's a personal blog and my opinions are not meant as advice.
Subscribe to:
Posts (Atom)