The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
Fully agree that CNIC is bucking the trends seen elsewhere. The market will at some point catch up but across the UK markets good results are often being ignored with fewer private investors ready to get back into equities never mind small/medium caps. The tide will turn at some point probably when it is clear that interest rates have peaked and inflation is under some level of control. In the meantime our management team will continue to grow the business organically and inorganically and buy back cheap shares if no-one else wants them!
Our non-exec Chair is a highly experienced and very successful PE leader who was managing partner of 3i. For those that donât know much about private equity professionals, they spend their lives valuing and investing in companies. So, if he thinks WJG is a good investment at this level, I think that should tell existing and potential investors all they need to know about the companies prospects going forward. Sure a possible sale at much higher levels is always possible but when a new CEO is appointed, and we see the prospects of gradual reduction in interest rates on the back of reducing inflation, I am certain we will see a strong recovery here over the next 12 months so I bought more this morning.
Yes the sector has been pummelled as is normal during a period of high inflation and interest rates. Many will have sold out ( including institutions) over the past year and are waiting for a signal to come back into the sector. Early days but the inflation news today is welcome and a couple of months of falls in the same vein will build confidence for money to come back into equities. A very good entry point for a 12 months + hold.
As always the market makers have a field day and will never miss an opportunity to punish a company when a CEO resigns out of the blue. I expect that he has either secured another role or more likely the Board felt that he was not performing despite the obvious mitigating factors of the poor UK economic position. People will know that there is almost always an overreaction to the downside as we also see on the upside. Over time IMO this will recover steadily particularly given the potential that inflation will continue to drop steadily across the rest of this year followed slowly by interest rates. Equity sentiment will recover much more quickly than that ( it usually does) and there will be few better entry points than under 50p. In 18months we have seen an 80% drop in the share price which is comical given the contracted developments so time to wait for inflation, interest rates and sentiment to improve and the share price will follow suit IMO.
Yes the UK market is comical atm and I suspect that market makers are making little or no money these days hence the wild and illogical swings we see not only on AIM but on the larger cap indices too. It smacks of desperation just like some of the posters on here. UK Pension funds have exited UK listed companies over the past couple of years and focussed on overseas stocks and government securities and now that interest rates are higher than we have seen for many years, risk free returns of 5% are available ( T-bonds and gilts) so fund managers have taken the safe option to the detriment of listed companies. This wonât change a great deal until inflation is brought under control allowing interest rates to come down. When this eventually happens those same fund managers will have to work harder for their returns and do some research again into stock picking god forbid they are let loose again to do that! In the meantime if you have capital to allocate and time on your side investing in attractive growth prospects like Futura will IMO prove to be a good investment and this will become clearer when granular data is published. The lack of this data makes it too easy to knock potential future returns as we have seen today. You are either a believer that a good team of partners is being established to drive the growth of new sales across the globe with more to come and a very attractive free cash flow stream or you think that the Board will blindly give away everything that they have worked for a measly few % royalty deal. I think that I will back the management team to optimise returns now that we have reached this point in time after many tough years and I will happily wait for a year or two before the obvious potential is reflected in the financials.
Similarly, I have it down this week but not absolutely certain. Someone has just invested ÂŁ2.6m today or at least it looks like purchases just ahead of the anticipated update which is either pure coincidence in anticipation of strong trading outlook, or they have inside information. Of course it must be the former as no-one ever gets convicted of being an insider do they? I am heavily invested here so looking forward to some good news so we can re-rate.
Bottom-picker. As Anthony pointed out you clearly have difficulty reading the detail provided in the RNS and âconvenientlyâ make a post which makes no sense to anyone who understands the RNS. I suspect that you sold this morning on the spike and no doubt will buy back in as it drops. Just to be clear I have no problem with people trading this who donât attempt to mislead but most like me will have issues with people who post nonsense in the hope that others may sell to assist their agenda. Which one are you I wonder?
Well the traders who sold down in the last couple of weeks were caught napping and will have been scrambling to buy back in this morning. This will catch the attention of institutions now IMO given such a strong partnership with Haleon. Exciting times now as we have the worlds biggest market being primed to expect Eroxon on the shelves of Walgreens and perhaps the other big retailers depending on the distribution agreement.
Perhaps a change of mentality would make things a little less stressful. Instead of trying to second guess the next set of news to make a few quid on a trade, why not reflect upon the future potential here and relax in the knowledge that multiple new commercial deals will be signed and announced in coming months as well as revenue figures and more granularity in terms of repeat purchases and effectiveness of distribution channels etc. This is what will move the share price onto a different level but of course these things actually take a little time and in todayâs world of instant gratification ( Eroxon can help in this regard) a few weeks is as long as some people are prepared to wait for their pot of gold.
No need to worry about debt. Our CEO explained that they refinanced the debt last year for a few years hence at lower interest rates than we see today and with strong free cash flow we can use the cash to ramp up share buybacks as well as selected acquisitions. I donât blame them for buying shares back at these prices if the market is asleep. Letâs face it most of the UK is in a coma atm and companies like CNIC with strong cash flows can take advantage of it. When we get out of this economic rut and inflation falls and interest rates turn down, cash from pension funds which is earning 5% on deposit or in bonds will return to equities again ( it always does). Smart investors will be waiting for this and will position themselves to take advantage.
Many thanks for sharing. This was a terrific interview and helped me understand the domain name market much better and the strategic drivers for success. It seems that we have a very capable CEO who has the ability to take this company much further. The market will eventually catchup so a little patience is necessary here along with most UK listed companies atm but I look forward to future financial updates and how the new deal with Microsoft BING will positively impact on revenue and bottom line. Lots to be optimistic about.
Jackbal - not a good analogy is it? Madoff created one of the biggest ponzi schemes and was convicted of fraud. Our dynamic duo are guilty of mismanagement/incompetence at worst some may say. I will be the last to defend them as they have destroyed value here but letâs not get carried away until we establish the facts over the change in majority ownership with the JV. If there is any evidence of wrong doing then that is the time to take action is it not?
Yes as expected, traders have taken their turn and are likely to be chasing other rainbows, investors are waiting for useful information ie. more granular sales data and information on commercial partnerships hopefully in multiple jurisdictions. Lombardâs position is both a strength and a weakness IMO. A strength in that they will have a big say in any takeover attempt and will want a very good return should this happen, negotiating from a position of strength. Some will see their position as a weakness expecting that they will sell into any substantive rise. They are very smart people and in their shoes I would sit comfortably just below 30% so they can sell down small chunks only if required to stay below the mandatory offer threshold and wait for the real monetisation events to happen. They may be approached by institutions to sell blocks to avoid those institutions buying in the market driving the price up but would certainly negotiate a decent premium. So, I am comfortable where we are and will wait patiently for the management team to do their thing and inform us of progress, hopefully, on a regular basis thereby avoiding the drip, drip that is only too familiar on AIM.
Bhargav - give it a rest for goodness sake. We are all acutely aware that Louis and Brad have made a complete and utter mess here and most have lost significant amounts. This could end very badly or a solution may be found, who knows, but I have all but written off my stake here. Own your investment decisions like most of us and stop bleeting day after day. I know that I should have undertaken more research on our weak management and the fact that they had no skin in the game instead of being seduced by 2 majors but my bad.
What evidence can you produce that there are any significant shorts here? I think you will find it is much less sinister and simply that retail investors have been selling out to avoid being locked out when the share is suspended on Monday am before the markets open. No-one has any idea how long it will take for this mess to be sorted out as yet another suspension with no timescales, which is a pretty poor show on any measure even though Fanning remains âexcitedâ despite the fact everything going on around him is âoutwith the companyâs controlâ. I do wonder who believes this stuff! I suspect that Tosca will be less than pleased with Fanning and I would not be surprised if they decided that he has had his chance and some and that they now need to preserve their hitherto large investment here before there is nothing left for the SLE portfolio manager to tip into the Tosca pot.
Always good to hear from the company this morning although, understandably, they have to be extremely careful about what they can and cannot say. I would like James to take some pills to boost his levels of enthusiasm though, as they have such a terrific story to tell and IMO should be shouting from the rooftops!. They have achieved a lot over the past 6 months but naturally the share price behaviour will move from speculative punters hoping for a turn on FDA approval to investors trying to make sense of the revenue and profit forecasts down the line. High quality data collection and analysis is also very important for their marketing partners to fine tune their strategy and to provide management with good quality data to communicate to the market. Our FD explained that it will take a few months which is understandable. In the meantime there will be commercial deals to negotiate which will take time as the US partners will be the source for the greatest share of revenue going forward and the deals have to be watertight with the correct blend of carrot and stick to optimise sales for all parties. Eroxon sales will continue as new markets open up and I hope that the company attract some new investors who are in for a few years as the product matures, rather than a few months. Buying below 60p will be considered a bit of a steal IMO as we progress across the year and we hear about new commercial arrangements being signed across the globe. The futura looks bright.
Just tried to buy another ÂŁ20k worth of stock on the drop this am. Surprise, surprise the market makers are at it as always as I had to split my order into small chunks until I bought the stock. Likely that they are dropping to accumulate to sell onto new investors who attended the presentation and can see the potential. For those new to investing this is what has always goes on in the background and it is worth spending time to understand the ebbs and flows to be able to anticipate the daily shenanigans especially with small caps. Unlike many small UK companies atm this has exciting prospects with majority of sales outside UK so not hamstrung by a depressing UK economic backdrop not helped by a poor governor of Bank of England who IMO is out of his depth.
Roadster - you have my sympathy as many investors backed Cross after making money in his previous ventures. This was a huge step too far IMO and his obvious failings came to light a few years ago when he failed to communicate regularly and clearly with shareholders choosing to throw us the odd crumb which IMO was arrogant and therefore he lost a lot of investors as a consequence. I remember selling out at circa 70p feeling that he was running a public company like his own little fiefdom. He surrounded himself with inexperienced âyes menâ so virtually no challenge to his stewardship which was a warning sign in itself. The damage has now been done and with the loony left sticking the knife in the sector there will not be a great rush to invest here in the future. Another sad story for UK investors.