They said:31 Jul 2014 13:31
This share tip is based more on the share register than fundamental analysis. At 0.05p (there will on Monday be a 200:1 consolidation so that will be 10p) the market cap is £7 million. Of that £2.5 million are shares held by the owners of OptiBiotix which has just been reversed in. Another £4.4 million of the shares are held by institutions and HNWIs who are in for the long run and anyway cannot sell in a meaningful way and came in at 0.04p so won’t want to sell until the shares are 0.1p or better. That leaves a free float of sod all.
The company has net cash of £3 million after a recent placing and so no need to issue shares and following an EGM to approve the RTO on Monday the news should start to flow as – given the nature of those behind the deal – will the share promotion. A tiny free float means it will not take much to get this moving. Incidentally on Monday the name changes to OptiBiotix with a ticker OPTI.
What does OptiBiotix do? It is described as “a microbiome modulation products discovery and development company.” Yes in English that means that it is developing compounds which modify the human microbiome – the collective genome of the microbes in the body – to prevent and manage human disease. The compounds will be used as food ingredients, and supplements or active compounds for the prevention and management of human metabolic diseases, examples of which include obesity, cholesterol and lipid distribution and diabetes.
In other words this is a play on how fat we all are. And we are getting fatter. Yes this is a crowded market but
a) The company does have IP – its proprietary OptiScreen® and OptiBiotic® platform technologies
b) We gather that tie ups with big names are in the pipeline
c) Its chairman is David Evans of Axis Shield fame who we rate big time.
Evans is of course also chairman of Premaitha (LSE:NIPT) our tip last month which so far has not done well – the backers of Ducat and are also behind Premaitha. The latter’s 30 day blackout rule since he RTO lapses on Monday and thus next week we expect to see not only a bit of news via RNS but also a detailed Panmure Gordon buy note where – we are told – the target price is a multiple of where we are now. So we’d buy a few more Premaitha today but as it surges accept is much smaller and far more tightly held cousin Ducat to get pulled higher on its coat-tails.
The Trade: Buy shares in Ducat today at a 0.5p offer and at up to 0.06p (no higher). The one month sell target is 0.09p (or 18p post consolidation)
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