Member Info for bobbyaxelrod

What are you thinking they will update? Seems stupidly undervalued, but low liquidity has worked against it. My holding gets especially hurt by the spread. I will probably do another review at some point - I felt confident when I looked at it deeply so chances are I will add. For 6m you get 20-30 restaurants, generating each over 1m turnover in normal year, with some cash. Most of their liabilities are lease related, which has hurt how the balance sheet looks. Just surprised that the value here has gone under looked (although I am willing to concede that I may be completely wrong here!)

If we exclude any accounting issues that I need to properly digest, then the business could be justified in trading on a higher multiple due to its favourable model & economics (franchising, operations, etc) and expected expansion (maybe 2x more in the UK alone, who knows international)

I'm a holder of MANO, and think is a great business backed by a strong model. I've been considering adding to my investment, and have ended up wandering down a rabbit hole into the IFRS9 accounting used by MANO (I'm not/nowhere near an accountant, so apologies if the following post comes across as dense):

It is the interplay between realised revenue, unrealised revenue and investments which causes me headache, as well as the relevancy and utility of unrealised revenue for an investor valuing the business.
Revenue = Realised Revenue + Unrealised Revenue
Whereby: realised revenue is the revenue received when a case is settled, and unrealised revenue represents change in fair value of "investments"
Investments = Insolvency cases purchased my MANO capitalised on the balance sheet at fair value (which is re-assessed regularly). The fair value reflects the net settlement value of the claim (settlement value - total costs) adjusted by probability of success. Adjustments in fair value (due to either value of the claim or probability of success increasing through the legal work done) is recognised as unrealised revenue. I have no issue with the procedures used to arrive at fair value, but just want to understand the actual accounting better.

I have 2 questions which hopefully someone can help with:

(1) In "Investments" (see Notes of Annual Report Section 13) - How are we to understand this?
fair value movements net of transfers to realisations = sum of (new case investments + net increase/decrease in existing case fair values + case completions
(i) Are "case completions" the transfer to realisations?
investments = additions + realisations + fair value movements net of transfers to realisations
(ii) Since "realisations" are recognised, but the value is always less than "case completions", does this reflect an adjustment for the previously unrealised revenue?
(iii) As "new case investments" is already recognised in "fair value movement", what is the meaning of "additions" under Investments? Are these the immediate fair value uplift on the "new case investments"?

(2) How useful is "unrealised revenue"? I am close to trying to avoid using it at all and focusing solely on "realised". I had problems understanding how the "adjustment" is made to account for unrealised revenue that later becomes realised. I have the following example of 1 case to try make sense of it:
Year 1 - Buy 1 case for £4m, net settlement value is thought to be £8m with a success probability of 75% so capitalised as an investment at £6m
Therefore: unrealised £2m, realised £0, total revenue £2m
Year 2 - Case is settled for £8m, and removed from the balance sheet (held at fair value of £6m) as an investment. As no new cases are purchased, the fair value movement is -£6m.
Therefore: realised £8m, unrealised revenue -£6m, total £2m

Thanks for anyone who read this, I think, for me, the accounting creates difficulty in being able to confidently value the business.

I just watched it - I think the market will only reward the share price once there is a meaningful & definite return to shareholders. Compared to the last talk there seems to be little progress aside from reducing net debt, for example still awaiting sale of solar assets or at least a move forward in the sales process, no definite plan for returning cash to shareholders despite the in depth coverage of balance sheet strength, and vague notions about possible ESG investments (whilst still insisting they should sell the one they have).

I have to think some more about this one, because the business has good fundamentals (they are at full capacity and provide cheaper energy than the other available options) and the talks from the CFO have been good overall and he seems very competent. Certain things are red flags, such as net debt forecast to increase and the possibility of ESG investments being made before shareholder returns reducing the credibility of the company in the market. They should return the cash and invest in ESG projects via remaining cash, shares (with share price supported by buybacks) and equity raises (given it is institutional pressure pushing for ESG and ready/cheap financing available for ESG)

I do think coal market are more likely to push coal price down over time which should help.

I am a small holder of GEM Diamonds, bought in on the basis of its apparent undervaluation but seemingly sound operations. I was tempted to add today, but ran out of time before market close to do further research.

I posted before on here regarding the apparent undervaluation (I am about 25% down since investing) but still cannot get my head around it. They are worth £65 with cash and inventories (i.e. diamonds, not a bad inventory item) greater than this. Going off the H1 update it appears that they will come out similar to previous years with revenues around £200, gross c£50m, EBITDA £30-40m. Their retained losses are being eroded away each year suggesting the business fundamentally is working. Their SGA seems stable. Their balance sheet seems strong, although with big tax deferrals. They spend most of their operating cash flows on CAPEX, but surely this needs to start to reduce - this would be the biggest red flag. On top of that diamond market fundamentals, as well as ability for large diamond finds, would seem to create a good set up. They are also demonstrating that they are planning to pay dividends (which some could consider an overdue token gesture) each year going forward.

I need to do some more digging (or I guess it would be "sifting" for a diamond share) because I cannot understand the undervaluation on the basis of "fundamentals". I would say the downward drift must be due to poor liquidity, geopolitical risks (including just generally doing business in that area of the world) or a complete misunderstanding on my part of the business.

Open for a discussion to understand what I may be missing or need to research further. For me, the main draw back is the strong but messy balance sheet as well as the massive CAPEX that does not seem to stop - is this just a very CAPEX intensive business or are they classifying costs under here that are normally found elsehwere?

Does anyone have a contact email for investor relations?

I don't need to comment on how undervalued this is! They can have the best of all worlds from this base: dividends, buybacks, selective well-thought out acquisitions and capital allocation strategies... whether they can materialise this or not is the question

Hopefully... trading at (increasingly) less than their cash position. I am always tempted to add

How does the offering of Glantus differ from what other companies like Coupa (or Tradeshift, Ariba, Tipali, Ivalua) offer? One of Coupa's 3 main areas is accounts payable (along with procurement and expense management)

Is part of Tekmar's lack of profitability due to its 5 separate operating businesses? Can anyone give a good justification of why these need to be separate entities?

Thanks, yes I read a negative comment on advfn, then spent some time reading about death spiral financing and the RNS again - but it didn't seem to fit. For me, the funding arrangements seemed reasonable, but more specifics about the loans are needed. Plus the related party aspect always make me a bit wary

Anyone have any views on today's RNS? I myself have no idea.

Have you tried emailing your broker to find out? I'd be keen to know too

I've sold out but keeping an eye on this so my familiarity doesn't go to waste. Because I sliced off profits earlier, it has become such a small holding that even if it doubled it would not be significant. I was happy to continue holding at first, but a few things I've become increasingly uneasy about: the fact they own worldwide rights to to Nuvec (rather than Nuvec itself) through an agreement with the University of Queensland (this agreements seems opaque but perhaps the details are explicit somewhere along the line), the related party transactions including the big loan at 5% interest, and the number and pricing of warrants/options. Overall I think the technology is interesting, but difficult to get a sense of where this in relation to competition, and the current agreements seem promising, but again they could be argued to be opaque. Also worried that any sustained rise will lead to placing. That said keeping an eye, and cannot rule jumping back in if new information/insights. Good luck all holders

https://www.mining.com/yamana-gold-founder-talks-generational-mines/

I'm a big fan of this company, especially their business model. Had some great gains so far around 150%, just wish I had bought more at the time! I really think they should expand to airports and international as soon as possible, but I am sure management know exactly what they are doing, having executed so well thus far.

I still think solid results overall, and I agree paying down debt (especially if it is at certain rates) is a good use of the cash flows but only if this means more cash flows for shareholders in future. Without reinstatement of a dividend or at least small token buybacks it is less reassuring as a shareholder that you will get a definite return, however paying down debt should lead to an increase in share price (as market capitalisation rises to match previous enterprise value) but could be seen as a good move for the company rather than shareholders (as we have less certainty about what will be done with future flows).

The cash flows are significant (I need to review their ESG strategy and feel that operating green energy ventures will be a way for a re-rate) but we don't know if these will be poorly invested. I did not get a good sense of what form these future opportunities will take, especially as they are selling their solar assets. They could buy Bisichi, or other cheap coal producer, at a market cap of less than £15m and have coal supply certainty. I don't hold any but wish I did before recent rises.

All this said, I am still weighing up adding at some point given the fundamentals. If cash flows continue they should be debt free soon with surplus cash to invest and return to shareholders. Part of me worries they fritter this away on poor investments and opaque CAPEX.

I am holder but disappointed with share price action over the last few weeks.

Market cap £70m
Cash £31m, Inventory (i.e. diamonds) £31m
If include all short term assets, including short term investments and receivables their market cap is less than their current assets. I know I haven't accounted for any liabilities but NAV is around 2.5x the market cap.

So my question for more experienced holders, why on earth is this so undervalued? Are there any catalysts or reason for a re-rate (not including diamond market fundamentals and dividend growth)?

So Frontier IP 1.5m shares are worth $34.4m at $22 per share

Looks like Exscientia is at $30 now, so Frontier's stake is worth $46.9m already (around £35)

part of me wonders if there is an argument for them to be more vertically integrated (e.g. coal supply), but I think the move into renewables is good and could help drive a re-rating. The market cap undervalues the businesses profits and cash flows. Has anyone got any insight into the debenture - have they essentially taken on debt at a slightly lower rate to pay of debts that are due in the near term? I think if they invest the cash into the business rather than pay a dividend it will pay off. I've not read the ESG report, any highlights?

fhey do not seem hopeful that the coal price will reverse to historical levels - I wonder how long the average contract with a commercial customer is and whether these can be offered at higher fixed rates when they are due for renewal?

https://www.nanalyze.com/2021/09/ai-powered-drug-discovery-stocks/

Four AI Drug Discovery Stocks
Company Name Ticker Market Cap
(USD billions)
Exscientia TBD TBD
AbCellera ABCL 5.67
Schrodinger SDGR 4.42
Recursion Pharmaceuticals RXRX 4.52

Founded in 2012, Oxford’s own Exscientia raised $374.4 million in disclosed funding from a slew of investors including names like Softbank, BlackRock, Celgene, Bristol Myers Squibb, and Sir William of Gates. All that money was used to build an AI-powered design platform known as Centaur Chemist which combines the power of machine learning with the knowledge of human chemists to discover drugs faster. As seen below, Exscientia reduces the time it takes to go from target to candidate by 70%.

Once there’s a drug candidate, it then needs to proceed through the FDA drug approval process like any other. That’s an easy value proposition to understand, but the accompanying business model is anything but.

If a software-as-a–service (SaaS) business model is to be rewarded for consistency and predictability, then a business model with unpredictable revenue streams should be penalized. While Exscientia’s revenues may appear to be starting out stable, there’s loads of volatility bubbling under the surface. There are two revenue streams – service fees and licensing fees – from which there can be four types of payments; upfront payments, research funding, milestone payments, and opt-in payments. Each relationship Exscientia has comes with its own terms. From collaborations to joint ventures, the business model quickly becomes so complex that it’s hard to fathom how anyone can keep track of what’s going on. So far, most of their revenues are coming from their relationship with Celgene.

During the periods ending December 31, 2019 and 2020, 69% and 83% of our revenue, respectively, related to the recognition of the Celgene up-front payments in line with our progress towards delivering up to three clinical candidate compounds.

Credit: Exscientia S-1 Filing
Then there’s the $4.6 million in revenues recorded for the first half of 2021 which consisted of 13% share ownership in a Chinese firm called GT Apeiron Therapeutics. While it’s counted as revenue, it sits on the balance sheet as an asset, albeit one that’s not likely to be very liquid.

While Exscientia has originated “the first three AI-designed precision drug candidates to enter human clinical trials,” their business model is far too complex for our liking. Complex business models = uncertain cash flows = stock price volatility. The same can be said for our next company.