The latest Investing Matters Podcast episode featuring financial educator and author Jared Dillian has been released. Listen here.
Definitely been a frustrating one as it is clear they have made massive progress but I expect patience to be rewarded. Its reasonable to assume that annualised revenue will be above the current market cap very soon. The first evidence of this will appear in the next financials and all doubts should be laid to rest when provisional H1 numbers come through. I will be interested in the average selling price of their production output. If that looks good a re-rate should quickly follow.
Agree with this. Another great social media post this morning showing the latest module up and running. Significant revenue growth should be there in black and white when year end results come out in a few short months. It looks like we will need to wait until then before anything major happens to the share price but the intrinsic value and earning potential should be pretty hard to deny at that point. What's great is they will be able to keep the near term growth story ticking over for several years: more modules to develop at the existing sites and shovel ready projects that will come with the acquisition. Unlike many other junior mining companies, all this is happening now not 5-10 years down the track. Im personally very happy with this one and willing to sit patiently with it.
Im expecting a fair amount of emphasis on the wider platform with some indication of their long term road map. Accelerating development of multiple drug candidates would make sense with the data they have. This may be designed to front run a hefty capital raise to fund multiple new clinical trials while strengthening their position against the likely take over bids that may follow. Looking forward to finding out tomorrow.
RNS was exactly what we needed to hear. Smooth sailing so far with the ramp up and their infrastructure has withstood the rainy season. Hard to know what more the market needs to see to give this company a fair valuation but I guess the next set of results should provide definitive proof that the money is starting to flow and we dont have very long to wait for those. The share price is a fantastic entry point in my opinion: the company is now significantly de-risked, with large scale production up and running. All things considered Im feeling very positive about the next 3-6 months for TGR.
Agree. Market seems to be taking a 'believe it when I see it' approach with TGR and has not put much stock in management's guidance up to now. Given that there is hard evidence on social media of fully functioning processing and production as of today is 10K tpa we shouldn't have long to wait before the money starts to show up in black and white on the financials. At that point, the market should have the evidence they need that the company are able to pull off mine development in this part of the world and hopefully we will see some value assigned to their 84k tpa target and a re-rating of the share price. All in all, if things continue to go smoothly with the ramp up I expect 2023 to be a good year for TGR.
My best guess (for what it's worth) is the science day is designed to facilitate a big fund raise on sufficient scale raise that Avacta can plausibly claim they intend to develop AVA600 in house as a strategy to improve their hand when future negotiations with big pharma begin. This may lead to some confusing share price movements in the short term but will ultimately increase the odds that management will get the best deal possible when the time comes. For me its a case of sit tight for 6 months and enjoy the ride.
Any thoughts from people on the timeline from here for different scenarios? ie. how long a big pharma buy out might take, if the Avacta management try to develop AVA6000 themselves, when they would raise the money for this? More importantly, how long before patients can actually begin to benefit? I guess its another couple of years for stage 1b and stage 2 trials?
Completely agree. Triple digit revenue growth imminent but seems like investors need to see the money in black and white before they are willing to believe it or give the management any credit. If this was a US company I expect the share price would be in a very different place. Im happy to just sit and let the next 24 months unfold.
Lots of reasons why a CEO should be talking to investors (both existing and new) but I think the main risk we have at the moment is that the current market cap makes the company a sitting duck for a take over bid if the preCISION platform is shown to be effective. I think acquisition is likely to be the eventual end game for Avacta but you would want to do it from a position of strength and a much higher market cap.
Also you only pay CGT if you realise gains over £12.5k in a given year. So you could sell half your portfolio one year and the rest the next and not be liable for any tax. If you expect to hold for the long-term though and plan to build a hefty position in this stock an ISA is a good idea. If the management deliver as we all hope this could be much higher in 5 years time than it is now.
Like you I'm sitting on nice paper gains after being down for nearly 4 years. Still very undervalued though and will go much higher if and when they get to financial close IMO. The AGM is next week and I wouldnt be surprised if they announce future plans for more conversions quite soon.
Late to this but you are right in saying this stock is significantly undervalued. This is a symptom of the market not knowing what to make of Uskmouth initially combined with the challenging route to market for tidal after the Cameron govt pulled the plug on financial support. Things are looking up on both fronts now but plenty of hurdles still to clear. Im very positive about the outlook. Uskmouth will be funded using the usual types of infrastucture financing (e,g project finance) once they hit financial close.
They will fund it through project finance, possibly selling a stake of equity at the same time to an infrastructure fund of some kind. With a market cap of £90m there's no way they could cover the £200m they will need to do the conversion work by issuing equity alone.
From memory I think there was a research note out a while ago from Cantor (mayboe) that had a target price of something like 80p. The enterprise values of Meygen and Uksmouth alone, even in their current partially developed form, are worth probably well over £200m so the market cap is still very low in my view. The Equitix deal previously valued Uskmouth at £120m and that was around 2 years ago when the risks around it were much higher. Meygen in its current set up will bring in £4m+ a year for the next 17 years as well and Greenhighland renewables is a profitable business. As ever, do you own research on this but I agree with Myles on this. A great buy and hold stock, still materially undervalued in my mind. Thats another major difference between this one and stock like ITM and Ceres. They are very well set to succeed in the new energy system but their valuations are totally detached from their current levels of turnover and rely on the assumption they will have several years of breakneck growth to justify it. For Atlantis its just a case of fair value right now finally starting to get recognised.
Muktass - that is my expectation as well i.e small equity raise for short term cash needs and a partner of some sort to give them access to the big money they will need for this. It wouldnt surprise me if there is some sort of raise though around the time results come out later this month.
For what it is worth, even at 15p this is still massively undervalued in my humble opinion. Enterprise value of Uskmouth alone is something like double the current market cap so I dont think its a case of missing the boat yet.
Hope so! There have been many false dawns with this stock but this time it is different. The sale of turbines and services to China and Japan means revenue growth is actually possible for the first time in years and Uskmouth is tantalisingly close to the finish line. Still two hurdles left - planning consent and project finance - but Im hopeful we will see big gains by the year end.
Good questions. I think they will go it alone. The Simec links give them global scale when they get to that point and I see them with ambition to become a big, independent vertically integrated IPP and project developer. On the other hand, they may also end up specialising in project development and O&M once they get tidal and the waste to energy units to maturity. Still very early days for the company. As for the share price, I think the decline has been general scepticism about the viability of its business model. The tidal unit was essentially stuck in limbo after the government pulled the plug on financial support so a lot of their IP and inherent value was at risk of being stranded without a route to market. They have managed to doggedly persevere and kept the tidal business moving slowly forward but as wind, solar and batteries got cheaper and cheaper I think a lot of people took the view that there simply isnt a need for tidal. Fortunately, things seem to be looking up now with prospects in China, Japan, France and maybe even the UK coming into clearer focus. Understandably given the challenges faced by tidal, the company saw the urgent need to diversify hence the move into thermal waste to energy. Again, I think the market was sceptical about whether they would be able to realise any value here and perhaps whether a company of this size (and limited balance sheet) could pull it off and has been waiting to see evidence of the viability. Slowly but surely that has come now and they are tantalisingly close to the finish line with Uskmouth. Hopefully now with the tidal business again showing promise and the thermal business looking good they are on their way to rapid growth. In theory, they could quickly scale from here and be a FTSE 250 sized company in 5 years but they will need cash in the short term and be loss making for another 2-3 years I expect.
Equitix were previously inline for a 25% stake but they have been conspicuously absent from all the project updates in the past 18 months or so. I reckon they have withdrawn. There were rumours of Chinese giants waiting in the wings though.