Adam Davidson, CEO of Trident Royalties, discusses offtake milestones and catalysts to boost FY24. Watch the video here.
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.
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).