Friday 23 July 2021
Firstly, apologies for me getting bogged down in yesterday’s newsflow. I’m trying to split my time between attending online company webinars, and reporting on RNSs, and sometimes it’s not possible to cover everything.
The company online meetings probably add more value, so on balance I'll focus more on that. Here are my notes on a couple of recent ones.
Transense Technologies (LON:TRT)
(I hold)
I attended a briefing on the company online this week, where no new information was disclosed, but I learned more about its tech & potential.
This online meeting and Q&A confirmed my thoughts here on 5 July 2021, when Transense put out an in line with market expectations update. What’s interesting here, is that after almost 20 years of pretty dismal performance, and mostly losses, the company has now de-risked by pivoting to a royalties model with major tyre manufacturer Bridgestone. Most of the staff & overheads moved over to Bridgestone, so it’s now a very lean IP business, that seems to be maybe around breakeven, or small profits. So risk:reward looks greatly improved. I don’t see much downside now, and who knows, there could be upside from its various projects?
Management struck me as very straightforward, and strikingly honest in their answers to my questions.
My opinion - Is it a good investment? No idea! The market cap is about £15m at the moment, and that doesn’t strike me as excessive. It could do well, if royalty incomes rise (there seems to be a decent opportunity there, in large mining trucks, so still a bit niche). Plus a few other projects. The downside seems to be that new tech in the automotive sector seems to take forever to actually start selling. Look at Seeing Machines (LON:SEE) for example. Although TRT is not interested in mass market products.
Overall, I enjoyed talking to management, and can see there’s some speculative upside here, probably with quite limited downside (in a bull market) due to the reduced overheads, and flow of royalties - although note the Bridgestone deal ends in 2030.
I get the feeling they want to extract some shareholder value here in one way or another, so I think it’s worth holding onto my small, speculative personal holding. But don’t feel motivated to buy any more at this stage, let’s see what happens.…
