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Huge volume here yesterday, with large volume selling. Perhaps large seller capitalising on a good update and strong buying pressure? If so and seller cleared, this should continue shooting up. Relatively high volume again this morning
Taking the RNS at face value....
Sales - Up (albeit primarily thanks to +ve currency movements)
Gross Profit - Up - both in terms of cash and %age.
EBITDA - Up
PBT - No brackets!.
Cash flow - significantly up.
Debt - Under control. Debt to EBITDA ratio is c1.3x
So, why does a company making £18m EBITDA, and converting 90%+ of this into cash have a valuation of just £52m? In my view more conventional metrics would push this north of £100m.
Much of the difference between EBITDA and PBT is going on amortisation of previous acquisitions (Non-cash item), and depreciation which will unwind, albeit they have the costs of setting up Vietnam factory to digest still. Interest charges are up, but indicators are that rates have peaked.
So, the valuation should be rebalanced provided that they continue to chew through the DA, and deliver on the cash conversion, so that they can re-instate the dividend, which should bring back the demand for the stock.
Real opportunity to see this double in price, and that's before any growth is factored in.
One danger whilst the price is so low, is that somewhere a PE house snaps this up and takes it private at a bargain price.
All IMO. - please always DYOR!.
An update that makes a mockery of the 50m market cap. Should see good momentum going forward from here, provided the forward guidance remains on track
There's been an interesting fall over the last few days - may be insiders know something - if so, does this count as market manipulation/insider trading?
UK AIM market is awash with insider trading
I can't see them paying additional fees for a main listing. Far more likely they'll delist if things continue like this. What is the point of any London listing if the few UK public market investors who are left, don't want your shares?
The UK AIM market is broken and no one believes in it these days. It has mostly been used to raise funds for small (and often broken) companies. INSPECS should move to FTSE market if they want to be recognised.
The market also relies on regular info (company news, analyst notes, briefings, recommendations) to promote interest in stock. All attention is on the US AI and technology market at the moment with investors diverting funds to these stocks where better short term money is to be made. Nothing will happen here until Q2 but at this price the company is ridiculously undervalued. Previous fair price was £1.15. They will have lost Ted Baker contract becos they have gone into administration and the high priced fashion market is under pressure at the moment, but this is a solid company and can easily win new supply
partnerships
Absolutely. There is no liquidity at this end of the UK market, resulting in the share price drifting lower and lower. Companies are delisting because they are not getting fair value on AIM. As an example, it was institutional investors apparently who forced the recent agreed sale of Accrol Group plc for a derisory 11% premium to the previous day's share price, because they believed they would get better value and better prospects for company funding, if it went private. The institutional investor(s) in question wanted out but knew that to sell a large holding of an illiquid company would trash the share price, so this 'forced sale' at a cheap price was the only sensible way for them to exit the company. It's these sorts of shenanigans which are making it almost impossible to invest in small UK companies.
To many games on the London Stock Exchange -that's why many LSE companies are delisting or listing on other exchanges. The LSE is dead.......
SP has gone nowhere since the update in January following, in my opinion, an overdone drop. If we get some encouraging future guidance in the April results, this could back above £1 in no time just like last January. But can't see this going anywhere until good news arrives, if there is any. Fingers crossed.
Good solid company with lots in the pipe line
Https://uk.finance.yahoo.com/news/calculating-intrinsic-value-inspecs-group-050003392.html
Key Insights
* Using the 2 Stage Free Cash Flow to Equity, INSPECS Group fair value estimate is UK£1.15
* Current share price of UK£0.92 suggests INSPECS Group is potentially trading close to its fair value
* Industry average discount to fair value of 24% suggests INSPECS Group's peers are currently trading at a higher discount
Key issue with SPECS though is investor interest
This is an outstanding share with excellent prospects plus a buy out possibility will yet be flagged up by others
You're right about the lack of liquidity and this is certainly not a day or short term trade share, but when the share price movements can be big and happen quickly. I was fortunate, I bought a ton of shares when the MD's wife did at 42p and sold most of then at 120p. I'm back in now at 55p becos I think this is a great company and possibly a takeover target in 2 to 3 years time (or maybe soon after they bring their own production plant online). That's just my personal opinion of course
Think it will move from here
I think this is now oversold and a good buy but not enough liquidity for me to invest.
And more
I agree with your sentiment regarding IPO's.
Many if the IPO's on the UK stock market have been inflated rip-offs.
Indeed I have an ongoing compensation case against SVS Securities with the FCA for over inflating IPO prices and mis-representing stock values dating back to the 2008. SVS is only one of many - with many still active today.
There is little incentive for any stock to list on the UK stock exchange and I would recommend any investor stays clear of any new IPO as the Uk market is full of cowboys
It looks like a typical IPO flotation that ends in tears for those who purchased at IPO, presuming they believed the long term growth story etc. I've bought on IPO myself before and regretted holding them for more than a few weeks.
I've also bought IPO failures at a tenth of the IPO price and regretted that too.
So hope SPECS can deliver for it's shareholders, especially those who bought the IPO in good faith ( naive perhaps).
Can you remember if anyone 'profiteered - ie Exited' at IPO? If it was purely a fundraiser with no sellers exiting then maybe this time it may be different?
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80 + COUNTRIES OF DISTRIBUTION
1,800 GLOBAL WORKFORCE
4 MANUFACTURING SITES
30 K GLOBAL POINTS OF SALE
Could easily become a takeover target valued down here.
So .60p is the bottom upwards and onwards from here back to £1.20
Slight decline with various new contracts this is a dream time to invest
Is now, before the masses arrive to jet fuel the u-turn. ;-)
At these prices it was just too inviting not to join in. This SP is nothing to do with the company's performance or potential. It reflects the current macro uncertainty and world events. Any positive news and these prices will be history. Maybe not a day-trading share but for any investor with a little patience.....