Member Info for bobbyaxelrod

I have been looking at KDR in more depth, given the low market cap and potentially great project. I've found Commin's posts on here useful and challenging to properly address.

Reading this broker note https://www.kareliandiamondresources.com/sites/default/files/Karelian_Diamonds_KDR.L_FEL_Research_Note_TP_35p_Buy_.01.pdf

It seems there isn't enough tangible exploration results to justify all the assumptions about the resource. It would appear little has actually been done in regards to confirming there is an actual diamond resource and then getting them out the ground.

I am still watching, the market cap is attractive, but any positive news and share price movement will likely lead to an immediate raise. The broker note has a 10-20x (depending on pink diamond assumptions) based on a PEA. I think the lack of concrete exploration and development activity is difficult to see past. Happy to hear alternative views and discuss.

Have had a good run with this company >100% plus dividends. Waiting on interim reports before making any further decisions, but to date I think this business is very well run and seems to be coming together. They really stress their distribution network, which must have significant, but hard to recognise, value. Recent update says H1 47% this time last year (which would have had some covid influence) which puts revenues c21-22m. If they manage the same sales H2 that would be around 42-44m£, which still represent 20% year on year revenue growth. Hopefully they continue with progressive dividend. It looks like the (loss of) the revenue impact of ventilators to the UK covid effort, which I think was around 7-8m, is not being felt at all. I wonder if they will look at more acquisitions.

Does anyone have any idea of Frontier's stake in Excientia (I've heard/read around 1%)?
And I have seen they are proposing an IPO to raise up to $100m, so any takers for the proposed IPO valuation for Excientia?

If they were raising the full $100, and say they only sold 10% of shares, which would be a small amount, this would "only" be a $1bn valuation. So Frontier would have a $10m stake, which could grow. That said, I feel a much greater valuation should be achievable given the partnerships Exscientia has in place, but they this would mean selling an even smaller percentage of shares. If anyone has any insight this would be greatly appreciated.

Thanks for sharing. He has been bullish for a while. I think the main problem with his argument against what he is saying (which is the share is undervalued) is that the earnings multiple is (usually) related to growth (rather than the fact it is an operationally leveraged software business with a strong balance sheet), and the business does not appear to be growing fast enough. I am continuing to watch from the sidelines, because I like the company, especially financials, but I find myself in a position of "having to take their word" for the reasons for slower sales growth (e.g. longer sales cycles, ST's other reasonings) rather than being able to deduce for myself. I do agree with him that the valuation is an attractive buy in price presently.

I sold out today, not comfortable holding into results with the constrained growth picture. The fact I sold out is likely a bullish sign! I will be keeping an eye on it. I just felt with the "long sales cycles" perhaps H2 wouldn't have much unexpected positive news (although probable dividend increase). I still really like the business and think there is a fair change I could buy back in, especially its low capex requirements, but I wasn't comfortable with the valuation I've paid based on earnings and earnings growth.

Was weighing up exiting the remainder of my position (already had most of my money back) to free up cash and reduce holdings, and re-evaluated N4 pharma; for me the scales are slightly weighed in the bullish direction still. I think there should be news of how the current partnerships are progressing and possibly more trials or partnerships of the technology, which being a platform itself could have wider utility across many products. The main concern is the financial management of the company thought this period. They had over 3m cash at the end of Dec 2020 which should get them through. There are no major institutional shareholders and only a small fraction of the shares <10% are not in public hands. I am hoping the likelihood of equity raise and dilution might be lessened through a licensing approach (up front cash and royalties creating capital light model), although I am also way that good/any news flow will likely immediately preclude more opportunistic equity raises (regardless of the state of the business).

For me the software offering is opaque as I have no direct experience of their utility. I have seen previously that Arcontech were involved in the auctioning of Bank of England bonds, which suggests the people that matters rate them. I just wish they could expand their offering, using the cash flows to explore other ways to make money, otherwise they will likely tick along with dividend increases each year. Especially with the massive increase in retail investors, it seems a whole generation, there is space for a non-trading app but one based on news flow (and Arcontech could further use this consumer data in its other offerings).

I've added ahead of the RNS, mainly based on business fundamentals (cash position, recurring revenues, cash flow positive, reasonable valuation, dividend growth). I am hoping the dividend will continue to grow, but think the board need to be more adventurous in how they use the cash, e.g. a small investment could lead to a big re-rate, like a retail investor based offering etc.

On the face of it, I really like this company. Fundamentals look great. However, I was wondering what other investors think about the board? Their backgrounds appear to be more financially based, rather than technology, and I wonder if this is leading to the steady, constrained-growth type picture seen with CNC?

Yes, it seems they have no intention to deal with debt anytime soon (and their existing debt is at quite a high interest rate). That said, I like the company and can see the growth story/ambition. The management are incentivised towards a revenue target in the short-term, which ultimately should be positive for the rest of the business. Their plan of becoming a major consolidator in a fragmented market makes sense and I would consider adding more to my position if I had more new information on business performance/financials. Their plan of reaching scale as soon as possible makes sense. I still think there is a chance of an additional US listing, given that in every interview they speak about how important the US is and how listing in the UK has helped their brand awareness and credibility.

I've sold my small position for a small loss. Think it's a company with a good offering, but the fact they are not profitable for long, despite selling units, raises too many questions about the viability of their model. If there was a software (i.e. SaaS) element then maybe it would be more attractive, with customers receiving updates and/or discounted hardware (the money being made in recurring revenues).

How unusual - I'v rechecked, both logged and not logged in, and it's definitely behind a paywall for me...

Is anyone else followed around youtube with constant Brandshield ads? It makes me uncertain if this is well-spent marketing (unless cheap), as the average youtube watcher is unlikely to need to purchase Brandshield unless I'm mistaken. The clients they promote, big global companies etc, are unlikely to be affected by youtube ads.

I am holder here, and am considering topping up as the share price has slipped but the business appears sound, but at the same time I think a healthy dose of cynicism is required here to temper optimism.

A few things worth considering, (1) I think a US listing is a possibility especially given the reputable clients and silicon valley PR firm, (2) as I've mentioned before accounting structure is at times difficult to make sense of, (3) although it is clear how Brandshield's offering works and is differing, we need a sense that new types of threat detection and elimination are being offered (i.e. R&D and tangible output) either in-house or otherwise (e.g. acquisition) - at the same time, going into specifics can aid the competition and also give the game away to attackers.

Would be interested in discussion, especially re a fair valuation, thoughts on the company (including two shields) and future directions.

If anyone has access to the seeking alpha article ("explosive ten-bagger") on Mano, please copy and paste

Don't know if these will help, the first link gives an overview of the software. Would be interested to hear your thoughts, as I have been weighing up this position recently.

https://pdfs.investorschronicle.co.uk/IC_Alpha_Arcontech_Simon_021020.pdf
https://www.investorschronicle.co.uk/ideas/2021/02/28/tap-into-a-prodigious-cash-generator/

Great company and board come across as very competent and assured. Although part of the IPO was for increased awareness and credibility, given that it was a small raise, I wonder if there is an intention to list in the US (the importance of America has been alluded to quite heavily in interviews).

Think the business has been performing well. Part of the problem is confusing (for me) RTO arrangement, especially when trying to make sense of consolidated and company statements as it becomes unclear what you actually own.

I've held and followed Frontier IP for a while - would recommend checking out their related videos on youtube. CEO comes across as very credible.

For a similar I play (in a slightly different space) I would recommend looking at Sure Ventures. Also a well run company with good balance and even smaller market cap c£5mn. Some recent co-investment with Pires, and all investments in "hot" sectors.

Hi LazySundays,

If you have a look through the recent annual reports you will see Medica is working on integrating AI within their practice. They have partnerships with AI companies. At present the consensus is, as you as say, AI will help streamline and manage workloads. A large part of this is the technology but also the need to have a human being take responsibility. So the AI complete takeover might be further away that we think. Medica also covers a lot of the more complex scans (usually recognised as "routine").

The main drivers for revenue - increased emphasis on imaging, along with increased disparity between radiologists and images - remain. It's a case of AI making medica more profitable through efficiencies versus AI making medica less profitable through reduced demand. I'm in favour of the latter view (for now). I think they are forward-looking and will be making efforts to assess how to future proof their business (they spend more time than us thinking about it). The recent acquisition includes a foray into ophthalmology. They have a good track record of returning cash to shareholders with dividends, so even in a doomsday scenario it might be more of a case of reasonable cash being returned to shareholders rather than capital loss.

"As we outlined in 2019 we believe the short to medium term future for AI in radiology can deliver two main benefits: workflow enhancement and clinical decision support. The accuracy of tools in identifying specific clinical presentations, or the presence/absence of a specific disease is encouraging; however, no single tool or combination of tools is close to being able to provide a full clinical report, at least in the areas of radiology where Medica currently operates. A radiologist evaluates a wide array of data, including reason for referral, clinical history and all of the image data in this wider context
for all possible significant findings, not just a handful of specific findings. For example, algorithms now have similar accuracy to radiologists in finding lung nodules on a CT scan, but they are unable to accurately assess a multitude of other structures such as lymph nodes. To ensure the appropriate clinical pathway for the patient it is essential that the all elements of the scan are reported."

Seems to be very level-headed with a clear set of possible plans. The opportunity appears extremely well handled so far. I was surprised with Friday's drop, and would have definitely added to my position if I wasn't already in profit (still have not progressed to "adding to winners"). Anyone who is even slightly worried should work their way through Colin's interviews - extremely reassuring.