Ryan Mee, CEO of Fulcrum Metals, reviews FY23 and progress on the Gold Tailings Hub in Canada. Watch the video here.
Today's statement points to further growth in revenue and operating income.
At 435p, CML’s stock has declined by 11% YTD (FTSE AIM All Share: -14%) and presently trades on 6.7x EV/EBITDA for FY24F. This represents growth at a bargain price against a backdrop of robust demand across key serviceable markets, with attractive risk/reward underpinned by strong strategic execution in its chosen markets, major asset backing (notably the net cash), further product developments post the MwT acquisition, and additional M&A potential (following on from MwT this year and PFRI in 2020) - STRONG BUY
Just saying... the probabilities are very much skewed in favour of GROW being much higher in 12m time, not even speaking of 24 months:
- irrational discount of 60% implying that 60% of the portfolio is written down
- rate cycle ended in the US, one more +25bps in Spetember for the BoE but it's already priced in as consensus for terminal rate is 5.75%
- Portfolio is well funded with 80% of the Core portfolio having a cash runway of more than 18 months on
current projections
- Expected weighted average top-line growth of over 65% in 2023 across the Core portfolio
but I'd not remortage my house...
Today 25bps marks the end of the hiking cycle, coupled to the fed following the same path.
All in all, a positive for capital dependent stocks such as GROW.
With the current irrational discount, a stabilitysation on the rate backdrop, GROW is a STRONG BUY.
Not a super fan of technical analysis, but one should acknowledge when a price closes above the 200 moving average.
I would look at CNIC price remaining above the 200MA over the next 2 to 3 sessions for a confirmation that the momentum is a tailwind for the stock... let's go!
Waiting for the same !
Landed today… meddling govt/BoE ; the end of the hiking cycle is also in sight ! STRONG BUY
UK Treasury advisers are increasingly concerned the BOE risks raising rates too much in coming months, potentially pushing the country into an unnecessary recession. A majority of Jeremy Hunt's seven-member Economic Advisory Council believes the bank should slow its hiking cycle given recent soft inflation data, people familiar said. The advisers told Hunt that they expect inflation to fall sharply by year end. The Treasury said the council provides independent advice and its views don't reflect those of the government.
I do think the market has already priced in what was published this morning.
The outlook has a lot of green shoots !
Gresham Technologies (GHT.L, mkt cap: £119m, corporate): Interims - Enviable contracted visibility. H1 organic revenue growth of 5% y/y (cc.), driven by continued positive momentum in Clareti revenues (+11% y/y). 5 new Clareti contract wins alongside 16 upgrades, have all contributed to strong top-line growth, with performance also underpinned by a NRR of 103% (+1pp h/h). Cash adj EBITDA was £1.7m (H1’22: £1.8m), with net cash of £3.8m (H1’22: £6.3m). The key highlight is contracted forward-looking revenue visibility of 95%/FY’23e (at Jun’23), leaving an undemanding c£2m revenue to find in H2. Even given macro turbulence and rapid base rate rises which drove major disruption in HTM bond book values and subsequently across global financial services institutions (GHT’s core market), GHT’s market-leading proposition continues to capture healthy demand and “a strong pipeline of opportunities”. Rapid and accurate reconciliation software becomes even more critical in our view, with cadence of deals having potential to accelerate in H2 onwards (not in forecasts). Looking forward, we model cash EBITDA margins of 15% by FY’25e (FY’22: 9%) driven by GHT guidance for 40%/new ARR dropping through. Couple this with projected 14% sales CAGR to FY’25e and FCF yield moves sharply higher to 5%/7% by FY’24e/FY’25e. That’s compelling.
Last night, Alphabet results were out.
Google’s ad revenue are growing again after a couple of tricky quarters – thanks in no small part to YouTube. Q1: -0.2% ; Q2: +3.3%.
This is very good for CNIC considering its synergetic relationship with Google!
Let's not forget the huge buyback and the progressive dividend policy... for a stock trading at 8x fwd EPS and with a ridiculously easy to beat consensus... c'mon..
Agreed with ggrantsu - having resilience in such tough macro backdrop is a pledge of quality but more importantly, the stock forward growth is pretty low and easy to beat which will lead to upgrade by sell side. Moreover, current low ratings and deep discount to peers really provide downside protection, in other words, if the flat operating momentum was for a stock trading at 30x fwd EPS (as opposide to 8x for CNIC) or 20 EV/EBITDA (as opposide to 5.6x for CNIC) I would be worried. Still, such low rating doesn't pledge for CNIC cash generation and maiden profit. Remain a strong buy in my book
What do you mean by flat?
I have c. 9.7% organic revenue growth in 1H 2023. Split: Q1 12.2% ; Q2 7.4%
They have made 4 acquisitions as highlighted below from their RNS in 2022.
1. VGL: $55.3m revenues annually or $13.8m per quarter. VGL was acquired on 8th March 2022. So we have 2 additional months of VGL revenue in 2023. That is $9.2 worth of revenues
2. MA Aporia: $35m revenue annually or 8.75m per quarter – as it was acquired in Sep, the whole quarterly revenue is considered inorganic in Q1 2023 and Q2
3. Intellectual property mgmt. $2.74m revenue annually or 0.67m per quarter, and once again the whole quarterly revenue is considered inorganic in Q1 2023 and Q2
4. Portfolio generating websites - similar to the point 3 above , around $0.5m of quarterly revenue and Q2
This totals to c$29.1m of inorganic revenue in 1H2023.
They have reported $396m of revenue in 1H 2023. Or organically they only made $367m (subtracting out the $29.1m of inorganic revenue). 1H 2022 they made $335m of revenue => c9.7% organic growth in 1H 2023. Split: Q1 12.2% ; Q2 7.4%
"the growth disappointment is ‘new info’ "
what's new info when we already had 3Q like this?
Also what matters is where consensus is, and currently it's low for FY23 and beyond
• Maiden reported profit still well in sight
• Sequential growth is flatish as your rightly said but i'd qualify to "good" in the current macro environment
• on organic growth, I calculate 1H23 yoy organic growht +7.4% (1Q23 was 12.2%) but the microsft deal has not hit the numbers yet (expected in Q3)
• good cash level supporting buy back and dividends
• outlook: AT LEAST IN LINE
• deep discount to peers provides downside protection on what seems a very easy to beat consensus for FY23 and FY24
STRONG BUY
Let's go team - let's close above the 200 SMA !
Just wanted to flag this morning UK inflation print. The main story is that inflation is lower than expected, fuelling a narrative that we are through the worst.
· CPI rose 7.9% in June, below forecasts of 8.2% and moderating from May's 8.7%. It was the first downward surprise in five months.
· Core CPI growth decelerated to 6.9%.
· The numbers will come as a relief for BOE policymakers. Market now prices a lower terminal rate to 5.8% vs 6% yesterday. I believe 5.8% still seems aggressive and I am more comfortable with a 5.5% terminal rate implying another +25bps in August and September. Previously, the market was pricing another +50bps hike in August.
All in all, seeing inflation peeking is very positive for GROW as this stock is very "rate sensitive". The UK yield curve is rallying (bond yield going down) which is positive for the discount rate used implying a higher NAV.
Despite today’s rally the double digit discount to NAV remains an absolute steal. Moreover, Morgan Stanley CEO said yesterday in their earning call that the deal trough was behind us. Again a positive to the VC / PE space. STRONG BUY
Well done guys - conviction and fundamentals don’t lie.
ASML results show that the trough in the semi cycle is now behind us. CML has retraced a lot and now screens very cheap on EV/EBIT and P/E. STRONG BUY
Raising a beer to all the retails who sold in the hole. Thanks for your shares.