Small Cap Value Report (Thu 22 Dec 2022) - YGEN, WAND, SIXH, GRIO, TGP, NWF

22nd Dec '22 by Paul Scott

59 comments 6822 reads

Good morning from Paul & Graham! Almost Christmas :-)

Just FYI, if the markets are open on any particular day over the Christmas/New Year break, then there should be an SCVR, but it won't necessarily be on time, depending on how much Malbec and Baileys has been swilling around in the Scott household the night before.

Agenda

Paul's Section:

Yourgene Health (LON:YGEN) - we've only covered this speculative, cash-burning company a couple of times here before. Yesterday afternoon it announced a horrific fundraise, at an 83% discount, along with poor interim results. So I'm flagging this up as another example of how cash-hungry speculative companies are in the last chance saloon right now, with discounts of 80%+ seemingly becoming the norm. So once again, I urge readers to check every position in your portfolios, and chuck out the ones that need to raise fresh equity from a position of weakness. (more detail below)

WANdisco (LON:WAND) - I covered this one yesterday, with a big contract win. There's another one announced to day! Although I'm confused as to why the revenue guidance for FY 12/2022 still seems so small. This share does look very interesting, but it's absolutely impossible for me to value at this stage, as it remains heavily loss-making. It's tempting to have a small punt on it though. (more detail below)

Tekmar (LON:TGP) [quick comment] - up 52% to 10.25p, which caught my eye. I’ve not looked at TGP since June, when it issued a pretty awful update, and put itself up for sale. Getting up to speed today, I see there have been several updates since June, and it seems to have an interested party that might make a strategic investment, to sort out the finances - but at what price, if it happens at all? Meanwhile the bank has been supportive, and liquidity looks OK. Today there is news of a big-sounding (no details provided) contract win for the North Sea Dogger Bank offshore windfarm (set to be the largest in the world, amazingly). My view - this looks an interesting, albeit risky special situation. (no section below)

Graham's Section:

600 (LON:SIXH) (£11m) - I’ve done my best to approach this one with an open mind. It fixed its balance sheet this year with the help of a disposal, but I’m not sure that its…

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Gudge58

22nd Dec '22

Smarttech247 (LON:S247) A friend of mine has flagged this recent IPO to me as a potential opportunity. I’m struggling to find out much information and wondered if anyone else knows them or has an opinion?

planetx

Paul

100% agree on bump and Numis totally unsuitable and not credible .

Good move by bump management but it should never have been a main market listing and Shoukd never have given Numis the fee fest .

Management and advisors very clearly got swept away with their ability to milk the market and forgot the basics of running a lean trading business .

Rule 1. - control the costs control the business

A lot here for me rides on the CFO, He’s the fresh blood that isn’t tarred like the previous management and a strong FD can relatively easily fix this .

Move to AIM is a definite

Turn the stock

Dave

andrewdb

I thought most people used rsync / lsyncd (linux / unix free tools), though in more business-critical environments, perhaps some sort of process to assure the copy is complete and accurate for audit may be something you could sell.

(it is a shaky memory but I think something like that was in use at a coventry based car manufacturer about 13 years ago - i was not directly incolved)

BenHazz

Hi Grudge,

It doesn't sound too dissimilar to £CRWD over in the US and if their recent performance is anything to go by shareholders very high expectations are not being met and the SP is in freefall. This combined with the the poor performance of the vast majority of recent IPOs would make me very cautious of £S247. Apologies I can't offer any detailed input regarding the company, just be wary the risk reward may be skewed to the downside!

Cheers,

Ben

JASVFS

Thank you for your quick comment on Tekmar Paul. We bought too many shares for the right reasons years ago and held for the wrong reasons ever since the cable rectification problems surfaced. Loyalty can equal stupidity, we're still holding.

Albm7

Superdry (LON:SDRY) (I hold) Financing has been agreed, new auditor appointed. Plus ..

Pre close - Trading update covering the 26-week period (‘H1 23’) to 29 October 2022

From CEO "I am also encouraged with how we have started the second half, which has seen our biggest ever week for Ecommerce orders driven by a return to record levels of jacket sales over the Black Friday period and good momentum through the recent spell of colder weather."

Very annoying that they only give % changes and not actual figures

eParo

Financing Facility

Superdry is pleased to announce that it has agreed a loan facility of up to GBP80m, including a GBP30m term loan, for three years with an option to extend for one further year, with specialist lender Bantry Bay Capital Limited1. This will replace the existing up to GBP70m Asset Based Lending Facility which was due to expire at the end of January 2023. Given market conditions, the interest rate will be higher than our previous agreement at SONIA2 + 7.5% on the drawn element. The revised facility is operationally less complex to manage and covenant light, giving us the necessary flexibility to navigate the current challenging macro-economic environment and continue to focus on driving our brand strategy forward.

Notes 1. Bantry Bay Capital Limited is a specialist lender which provides supportive debt capital solutions tocorporates in periods of growth and other change. Bantry Bay focuses on asset-based financings for private andpublicly listed companies across a wide array of industries, working with clients to provide the foundations forstability and growth. 2. The Sterling Overnight Interbank Average Rate (SONIA) is the effective overnight interest rate paid bybanks for unsecured transactions in the British sterling market.

https://www.investegate.co.uk/...

Richard Goodwin

"If you study enough companies, you’ll notice this from time to time: adjustments being made when “one-off” orders in the prior year don’t repeat, but no mention of any orders being “one-off” in nature during the prior year!"

I agree. This sort of thing, belatedly discovering that past orders were one-offs, really, really, annoys me. It may just mean that they failed to win the next order (ie failure to win led to non-recurrence) or it may be genuinely one-off, in which case they should have said so in the previous year.

Antehelion

I would recommend doing a check of their products,

I tried to open a savings account with them but found the process to be 20 years out of date. I bailed and went to Atom where I was up and running in a few minutes.

Night and Day from a customer perspective.

Unless they invest heavily on the back end processes and front end website, I can't see them retaining market share personally, any IT savvy person would just walk away.

Tanglands

I see paul scrubbed destiny pharma from his early list, don’t blame you paul!
But it’s announcement, today is in sharp contrast to the excellent points made about YGEN. Destiny will get a fully funded agreement with a larger US based pharmaceutical company to take their product into that market, assuming it does get signed in Q1.

Almost impossible to value, but everything so far suggests that their lead asset for the prevention of clostridiodes difficile infection should get approved in the US. Having had a brother who nearly died from it, let’s hope so.

I hold.

The Boon Fund

Albm7, as an Superdry (LON:SDRY) holder you either have rose tinted glasses and did not read this sentence immediately after, or maybe as a a holder you're trying a bit of light promotion? :)

"That said we are under no illusions that consumer confidence is fragile
and that the picture is unlikely to change quickly."

Rusty2

I had an account with them and had quite a few issues, don't forget your password, otherwise lots of problems getting it reset, read the reviews on Trustpilot, I'm not alone. Fortunately I had 1 months free phone calls, otherwise it would have cost me a lot of money. Takes ages to get through by phone, emails very slow response time. Yes antiquated is how I would describe them. Much better places to invest at the moment.

No I read it alright, I was not trying to be misleading in anyway just highlighting for anyone interested in Superdry (LON:SDRY) that there was news out as it has been discussed here recently. I didn't want to copy whole press release.

mojomogoz

Gudge58 re Smarttech247 (LON:S247) ...

I tweeted out the below on looking at it. I don't have much of view. Its unusual in cybersecurity floats in that it seems to have real revenues and relationships. However very new to market and I think some of the aspects to the biz are opaque (inc the Visibility Blockchain arrangement) and so could be the source of surprise (positive as well as negative). Instinctively I feel there will be some rough/surprise to navigate from this before we see what it is. Also note that founder owns 67% and employees 8%...

Davidcox

I've followed this share for many years now and made money along the way. It's all about moving data from premise to the cloud. It's the only company in the world I believe that can move data at petabyte scale while still receiving new data that will also go to the cloud and can still be accessed while it's happening. There are millions of companies throughout the world with their own computer set ups but many will want to start using the cloud. For a start it's cheaper I believe. You don't have to buy and maintain expensive equipment and when you want to expand you simply buy more space. What seems to have given it more momentum is that the EV manufactures have discovered that it's good for IOT and transferring data as I understand it from their cars to the cloud.

Dragon

Thanks for sharing with us what company you're actually promoting?

jamesalastair

23rd Dec '22

This share ... what share do you mean?

Harry Hindsight

24th Dec '22

WANdisco (LON:WAND) I believe as commented below. Need to understand it and apply common sense before investing. Currently don't have a clue.

I'm thinking of satellites and autonomous cars, soldiers in the field etc. GPS is inaccurate to 10m and can be compromised. Maybe the ability to pump up shed loads of data quickly and securely and returned in seconds would be some 'moat' ability. Will wait for their first profit but likely taken over by then.

Samsgrandad

29th Dec '22

A quick reminder that when replying to a specific post, if you want your post to be understood in the right context, use the "reply" link below the post in question. Don't use the "Add comment" box at the beginning of the comments or you will start a new thread and readers won't have a 'kin clue what's going on. PLEASE!

Readers can select to read replies in time order or threaded at the beginning of the comments field but this only works properly if replies are attached to the correct thread.

Having worked in IT starting in 1970, I was curious and I did a lot of digging into WANdisco (LON:WAND) years ago. I decided all the good news was already baked in. The company name derives from Wide area network distributed computing and they have changed their target audience a couple of times but now concentrate on migrating customers to cloud computing. Not just storing data in the cloud but also using the compute power and communications. Web based data providers and users communicate directly to AWS et al and the on premise part shrinks to being the equivalent of a remote user once migration is complete. The intervening part is where Wand come in. There must be built into the software that runs on the cloud system and the on premise system some means of recording which data has been copied across to the cloud and whether it has changed since copying in the same way that Backup programs save time by not copying data that hasn't changed. Eventually (and depending on internet bandwith that could be some time) all the data is on the cloud server and all applications using that data are on the cloud server. Answer to how it's done is probably slowly, and probably frequently changing data done first (with a database I would guess there would be additions but not changes)

My question is are there presently enough big data customers to migrate to keep wand busy enough to repay an investment. Future big data imho will go straight to the cloud anyway, their ebullient CEO has sold about £10M worth as shown on Stocko so doesn't inspire me. I don't think in its present form it has a long future.

Small Cap Value Report (Thu 22 Dec 2022) - YGEN, WAND, SIXH, GRIO, TGP, NWF

Agenda

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Paul Scott

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