Member Info for Agricore

It's been delicious bargain buying today but I was lucky; I was in the process of moving funds from one SIPP provider to another so had dry powder through that.....

Once things settle down about the Ukraine we'll see a bounce in the market

Given the recent fall I went back over the recent interview on Vox Markets to write down the key points of the interview.
1. Brand strength in their niche areas (60% of revenue). Products are staples.
2. Customer Brands (40% of revenue) opportunity for new opportunities, additional sale of VLG products (white labelling)
3. Vertically integrated - helps offer better levels of service to customers
4. BBI - Balance Active Diabetes products - growing, 2 new areas of therapeutics - women's health; additional Swedish manufacturing capacity
5. Helsinn - Oncology products - help reduce side effects of cancer treatment - profitable and growing
6. Majority of sales are European. Looking to grow US presence. For now use Amazon. Good relationship with Amazon. In the future looking to acquire a US presence.
7. Chinese distributor strong until early 2020 (é7m sales in 2020). Hit with lockdown, large inventory, never recovered. Samarkand now in place who specialise taking European brands to China. VLG now deal with the UK people of Samarkand.
8. Overstocking. Hand sanitiser - over ordered during covid.
9. Margins. 3% hit to gross margin due to cost increases e.g. shipping costs. Now passed on customers as higher prices in 2022. Will we see margins above 40%? MD replies YES YES
10. Dentyl has ingredient called CPC. The research will be peer reviewed in 2022.
11. New product development. Innovating on existing products. More acquisitions around women’s health. Acquire weak brands and rebrand them using VLG’s brands e.g. Balance Active
Four levers to achieve synergies in acquisitions. 1. Strip costs out e.g. admin costs (+5% margin) 2. internalise manufacturing (+5% margin) 3. International Markets 4. New products. Leverage “substantial benefits”
12. Debt capacity in Jan 2022 - £5.5m includes lease obligations FRS16 – net debt is “considerably lower”. Scope for £50m inc accordian… can buy 2.5xPBT + what they’re buying.
13. "Expect 10% growth"
14. Existing manufacturing capacity to grow sales to £60-70m

https://www.**********.co.uk/articles/stocks-to-follow-on-vox-markets-21-12-21-5a3485d/

Anexo covered by Paul Hill and Justin Thingamebob

They don't mention Anexo's new foray into addressing substandard housing - but otherwise a reasonable write up. Anexo is growth at a reasonable price plus potential for a 20%-50% special dividend potential for the VW award (using the comparative settlements in other countries as a guide). The fact that Courts are reopened and catching up on cases, and the fact that some of the competition have left the market over the past 2 years are 2 strong tailwinds for Anexo, which they don't touch on either.

Interesting to note the author thinks NW Africa is highly suited to green hydrogen projects:

https://www.rechargenews.com/energy-transition/not-the-new-oil-petrostates-could-lead-world-in-green-hydrogen-but-wont-dominate-irena/2-1-1146560

Froggy beleaves in his tea leaves

Today retracement of 3.6% suggests that the risk is now in the price.

The risk is that sanctions will be used if Ukraine is invaded. If a compromise is found then JRS will quickly re-rate given the strong gas/oil prices. Putin and Russia have much more to lose than to gain by going to war - but will extract concessions before they back down. I think that's the most likely outcome. Those concessions should - if any - be positive for JRS.
https://www.themoscowtimes.com/2022/01/18/investors-continue-to-ditch-russian-assets-amid-war-fears-a76071

Adjusting for the current market price of Backblaze ($12.75/share on 19/01/22) from my prior assessment ($24/share in October 2021) that reduces the NAV to $8.93 - I agree.

What is quite interesting at this stage is whether Backblaze is a "jam tomorrow" growth stock with no path to profitability or instead is a cash generative and which has a runway to positive Net Profit in 2022. If it's the former then it deserves to be at 12 bucks. If instead the business can maintain its trajectory where it is already highly profitable above the line, and given a year's growth then it's current price is well below a fair value based on fundamentals. The 6 analysts that track this share seems to concur that it's 50% below fair value. Backblaze's latest results are here:
https://f001.backblazeb2.com/file/backblaze-b2-collateral/Earnings-Presentation-Q3-2021.pdf

Vanadium outlook 2022: What’s ahead next year: As 2022 kicks off, global demand for vanadium is expected to grow.

“There is limited demand downside, as either growth is expected to slow (steel, chemicals) or increase in pace (aerospace, batteries) as all main demand categories are poised for some growth,” Thomas said.

Looking specifically at the steel sector, CRU is expecting demand in China to be flat, with firm intensity and slightly lower steel production figures — down 10 million tonnes, or 0.89 percent. The rest of the world is expected to see a slight rise in steel volumes with intensity remaining flat.

“For the aerospace/titanium segment, aircraft inventory is moving again and the supply chain is starting to pull in more vanadium,” Thomas said, adding that CRU is looking for demand increases for 2022 over 2021 figures. “This sector is lagging from pandemic recovery by about one year to 18 months.”

Another segment that continues to grab attention from investors is the battery space, as vanadium is a key metal used in vanadium redox batteries.

In 2022, CRU expects demand for batteries to be up ***significantly*** in China and moderately in the rest of the world. Meanwhile, chemicals demand growth will lessen with slower industrial production growth in 2022 over 2021.

https://investingnews.com/daily/resource-investing/battery-metals-investing/vanadium-investing/vanadium-outlook/

Not sure about decommissioning costing a bomb - the Rogerstone Powerstation was about 5 miles away was blown up and is now a valuable housing estate.

Perhaps there's an agenda to grab the land for residential development in a very attractive area? It would be brazen, it would be immoral - but that doesn't make it impossible.

I sold out of SAE when they disposed of the highlands hydro division. £0.75m EBITDA sold for £3m? Desperate and regrettable measure. GLA to those who remain invested here.

Bet you there's a ST update later today. It's felt obvious to me that this one would re-rate given the traffic levels, increasing numbers of motorcycle deliveries and more recently the state of some rented housing. The fact that the shares barely responded when VW's counter claim was thrown out "without merit". Cenkos don't say how much of that 280p rerating includes their assessment of the Dieselgate pay out (should ANX win of course). It's looking increasingly likely. The UK would be unusual to not award when other common law countries (like Canada) have found VW liable. The other question is how generous will the award be as there's wide disparity from Country to Country. Anyway lots of reasons to be positive about being invested here.

He didn't have a scooby, Scooby :)

This morning's announcement on expansion tells you all you need to know about the forthcoming trading update. Glad I topped up here on the recent drop.

I agree but at least he’s not constantly talked over by Paul Hill - I call that progress.

To be fair you can’t take away his investments of the year track record, however. He has beaten the market every year and sometimes by a lot

Amidst all the downward revisions, Perlin reminds investors his positive thesis remains unchanged. The analyst thinks that last year’s acquisition of buy now, pay later leader Afterpay – expected to close early this year – will be an excellent addition which “links SQ’s two ecosystems more meaningfully together.” Amongst the key strategic benefits of this transaction are Afterpay’s 100,000+ global merchant base which will not only enhance merchant acquisition but will “accelerate SQ’s growth with larger sellers and expand into new geographies.” The deal will also enable Afterpay customers to manage their repayments inside the Cash App, thereby expanding SQ’s peer-to-peer product offering

https://www.tipranks.com/news/article/block-stock-gets-a-price-target-cut-but-there-are-reasons-to-be-bullish/

Perhaps Agricore should say what Agricore thinks? And believes.

I believe the nail was hit on the head when someone said the stock market is driven by sentiment. Least in the short run.

The fact that Investor's Chronicle list BMN almost at the top of earnings upgrades was interesting to me. The fact that we know investment is driving down cost and is starting to pay off (based on quarterly updates). At the same time the commodity price is improving. The fact that new markets for vanadium are emerging (yet are nascent). The fact that regulations are driving higher proportion of vanadium to be used in steelmaking. The fact that the US has signed off its infrastructure stimulus. The fact that the Chinese plan to do the same in 2022. All these facts lend weight to the idea that when brokers claim improvement is coming that we are not viewing the Emperor's clothes.

The wholesale dismissal of all analysts and all tips is just foolishness.
But the blind acceptance of their every word is too.

In the case of BMN I have concerns about the BOD; I have concerns about the VRFB economics. I wrote to BMN's Investor Relations asking them to explain the economics because all we know is they spent $1m in last year's accounts. There's no "business plan" just a vague plan and we learned they planned to recruit a Consultant last year to start to plan. Did my email to them make them think "hmm we need a plan?". I don't know. And I hope not. They didn't reply to acknowledge my emails by the way, which I considered quite rude. And by the way the analysts don't cover the economics of VRFB either, in their broker notes. I'd also admit that I relied on a broker note as part of my rationale and now feel once bitten, twice shy about that particular person and when I see their videos and tips I take what they say with a large pinch of salt.

So there's reasons to feel negative. Still. But I also think going back to the facts that the improving costs, the improving demand outlook and the stabilisation of the situation that the improved broker outlook is justified.

Most importantly - the negative sentiment has moved this down to a level that's not justified by its fundamentals.

Is it darkest before the dawn?

Selling EMH at today's price level would be a mistake. Today's price - 68p seriously undervalues it.

The video looks fantastic but here's the problem. In 2 months it's only had 274 views including views from everyone who uses this forum. I can't find feeling that this share is a bright jewel hidden under a stone. If only they could get their marketing going??:
a/ Covid Testing
b/ replace Servers and VPNs with secure edge computing
c/ Insect Protein Systems
All three have the potential to make this share a spectacular success. Sigh.

https://youtu.be/KV-zPUZL6Zg

No "news" but provides context of the events of 2021 and where they're going for 2022. Interesting too that they are once again on the acquisition trail and not standing still. All very positive in my opinion and am looking to next month's update. Describes their non-IFRS16 debt to be negligible which is interesting also..... reading between the lines that means cash flow in H2 2021 has reduced its acquisitions debt to negligible levels ("much less than £5.5m excluding lease commitments" said Jerry). That in turn means the cash flow positive indicates to me potential for a good level of earnings. I appreciate cash is only one current asset so it depends on a few other timings and aspects like destocking - but it's more evidence that this will surprise the market and at 45p it's still good value. Interesting, too, that Cenkos report that peer business Science in Sport has a EV/EBITDA 5x higher than that of VLG.