Member Info for picax

Insanely low level of IIs and seemingly low proportion of large holding LTHs. I think this just points to the share (and SP) being dominated by punters and traders who don't care about AGM resolutions. That is driven by the BoD treating shareholders badly with little communication and an explicit bias away from creating investor value in presentations, the volatility and short-term outlook of being a COVID stock, and reliable news deserts followed by giant RNSs (that could have been released separately). Since hitting 440 we've seen 2 big pump and dumps in the SP that kicked us off the downward trendline briefly, but no real strategy to stop this trajectory continuing. At this point I'm a little concerned that the dominance of speculators will mean that even the DHSC resolution will see a similar moderate rerate followed by a few months of sell-off. Not surprised that the base isn't engaging and it's largely the fault of the BoD for encouraging this situation.

https://twitter.com/NovacytGroup/status/1448681521230106624

I guess they got their final 2% by midnight yesterday or we should have had an RNS today about failing to meet the requirements. I thought that this AGM, since it was a redo, doesn't have to meet any voting threshold, so I wasn't sure why they were going on about it on their twitter.

I'm at £3.3 average and even I'm hurting, but I know a lot of people here are far worse off. The bottom really fell out of this over the last couple weeks.

I'm tired of the constant spats on here completely ignoring the discussion being presented. I don't post much but decided to tell you lot to please grow up. Don't feed the trolls.

In answer to OP, the significant risks that I think are priced into the SP are that the DHSC have decided to all but destroy this company in both past and future actions and that demand will crater towards the end of next year as the pandemic ends. This is exacerbated by rampant speculation on the share, infrequent communication, unexplained delays and worst of all, the French.

I think the big value drivers are in the first para and the share price volatility is in the second. I don't hold much credence to the points in the first para but I reckon the market does.

GLA

If anything confirms the astounding lack of communication it is dropping an RNS about the R&D development with several substantive items directly after not getting a quorum. Transparent, and not in a good way.

This was before the wider market issues. NCYT have been very hesitant to regularly talk about their own innovations, sales figures and future growth prospects. Sentiment on AIM reflects the BoDs own flimsiness. Occasionally they come out with a monster innovation RNS or another reiteration of meeting projections, but such irregular news flow means that swing traders and similar are just waiting for an RNS to drop that hikes the price 50% in 3 days and sell out leaving some more bag-holders here, who will eventually get fed up (over several weeks / months of no news), leading to a slow price decline after the initial bounce. If swing traders had any fear that RNSs could drop any time or regularly, or that LTHs wouldn't be slowly bleeding from the company, then maybe this wouldn't be such a speculation stock so far from its intrinsic value.

A sale is a good time to buy but I like to know what the market sees that I don't. Unless this is just short-term speculation that the iron ore price is going to drop so will the price, I reckon the company is in far better a position than they were last time they were at this SP. The fundamentals and future look really solid to me, so the broker rating triggering such a panic is a surprise. I'll be looking to top up soon.

This does seem pretty wild but there are some elements that make it plausible. At the Investor Meeting 2021 at 45m, Ajan says their targeted areas are infectious diseases (obviously), respiratory (again obvious crossover expertise) and transplant (???). Well, Heartcel fits quite nicely into the picture to explain that non-sequitur.

Heartcel hasn't been approved yet and they would be bold to hire people to build out a product for a drug at that stage for a company they haven't bought yet. So potentially they are hiring people to work at the megalab in advance that can transfer to Celixir when necessary. Now this is very tentative because if they plan to manufacture in-house they will need people to test their instruments, but I would be surprised if this were called a validation scientist as once their instruments were set up they would be out of a job, so I would imagine these duties would be rolled into a production scientist (or similar word mash) role. A validation scientist might work on calibrating and testing systems designed to go out to customers and which would be needed for pretty much every sale of a PROmate system or similar providing a permanent position with that title. But why hire new staff to test instruments now, as they are already being tested? My wild speculation is that they are hiring now as part of the resolution of the DHSC complaint, that they resupply the required kits with more rigorous testing, and that those scientists can then be transferred to Celixir after they have scaled up. Based on nothing but the slightly incongruent facts presented and having worked in a similar role (instrument validation).

Forgot to mention that the overall market conditions for high grade iron ore and for value stocks appear to be very positive. For the former, Biden's infrastructure bill, increasing demand elsewhere and supply disruptions, as well as green incentives. For the latter, interest rates moving up across the world pushing people towards companies that have good financials and less debt. So not only do FXPO appear to perform individually very well, but they are also well-positioned to benefit from near-term shifts in the broader market. Yet people are expecting this to go down another ~50%?!

FXPO trades with a strong correlation to current iron ore price but if the company makes a bajillion pounds during the peak of the iron ore spike, which it has (trailing P/E now <3), and the current iron ore price is still very profitable, why is this not reflected in the SP? This money allows for expansion and investment, the payment of their debt facility earlier this year and hefty dividends. Strong cash flow and EBITDA , ROCE (5yr) of 42.4% (insane, really). So ... uhh ... does anyone have an idea why brokers downgraded this company and why it was already valued so low? I feel like I'm missing something really obvious.

I guess this is what's behind the 6% drop today? Govt backing of competitors with no stated rhyme or reason.

I have briefly dabbled in the rock solid science of chart analysis. ATR(14) has hit a minimum and we've crossed the 50d MA with a neutral RSI of 55. I can confidently say we will move in a direction sometime in the next two weeks, but don't hold me to it.

I think if the market worked correctly then it wouldn't be near this SP, but unfortunately it is way too small for institutions, too illiquid for traders, and has damaged sentiment from IIs. None of these things affect the fundamental value, just how it is disjointed from the SP, and as that disconnect widens something will have to give.

I'm looking around for unicorns like this on AIM that are growth companies with no debt as interest rate increases in the wider market should serve as a catalyst to see them rerate. Currently with zero interest rates money has moved mostly into speculative stocks like tech for the future instead of value, but companies like YU have growth futures and have value balance sheets now ... perplexing.

Thanks for the info Sparky, yeah the volume being actually zero some days forced me to rearrange my portfolio spreadsheet even! The USP here is digitisation, customer care and green energy options which appear to be slow to develop across the utility sector. For SMEs this feels like a big selling point. Being very illiquid and having high spread does seem to dissuade people significantly. It does feel like a good update gaining some traction in the market will lead to this rocketing up as liquidity will improve. 100M turnover and 40M MCap seems a little ludicrous (for a growth stock with no debt, no less).

But you have enlightened me as to 1. and 3. of your points, I wasn't fully aware of that and it could be an additional drag as AIM is hugely sentiment based.

BYP it was easy to misconstrue "both have 70m shares" as "together they have 140m" rather than "both exchanges together have 70m".

Also correct if I'm wrong but in the last shareholder meeting I remember GM saying that 2/3 of their *shareholders* were French, not that 2/3 of the shares were on the French exchange. I found the vagueness a little confusing, I too would like to know the share dist. across the two exchanges.

Yes I have factored revenue of 20% growth in revenue YoY but that isn't cash flow which is what is considered here. I don't think they have given cash flow predictions for this year (if someone has seen them please lmk) but I have taken it as being roughly proportional to the 277m revenue / 91m cash flow generated in 2020 going forwards. This is a very rough scaling and apart from revenue growing at 20% (which is very bullish) the rest of the assumptions I think are conservative.

Wilson yes there is no getting around the discrepancy between NCYT and other COVID stocks, it doesn't make sense regardless of NCYT's fair value. My DCF calc came out to about that with conservative estimates, as I said assuming that COVID goes away and that NCYT doesn't transition, neither of which I view as probable. It is still undervalued in that scenario.

I agree Bluelight and Kaeren, there needs to be more proof. I am going by the investing thesis by Myles McNulty - I think AVCT have shown clinical data that meets that bar but it is very early days for them yet. The two companies aren't really competing in COVID with the difference in their maturity and the sector is big enough for multiple companies to grow even if they were.

I don't know about ODX but AVCT's valuation is based on two things: 1) being best-in-class and dominating the market, selling all of their LFTs even as they ramp production, 2) their oncology angle with the same platform that could be revolutionary. They could be good on either leg, but both are unproven currently. We will hear more about both in the next few months, they have started selling and ramping production on their LFTs and started patient trials in oncology which should have results near the end of the year.

I have just done a discount cash flow analysis because I have no idea why the SP is so low. I managed to get 475p if I assumed that NCYT would hit 100m revenue this year and grow by 20% per year, which is excluding DHSC,for 5 years and then for revenue to be £0 from then on. 5% discounted per year, profit after tax same proportion to revenue as 2020. I think this has a mix of bullish (growth rate, COVID 5 years) and bearish (doing nothing with their cash, no DHSC resolution, £0 revenue from Y5 onwards). After running the numbers again assuming revenue stops after 1 year the revenue becomes 330p. So, this company is only fairly valued if you assume that COVID is going to wrap up sometime in 2023 and NCYT have no other avenues for development. If you think that COVID will last longer then it should be in the £5 range and if you think that the company will provide value further out than 5 years you could double that valuation easily. As always DYOR and valuations on AIM are pretty worthless but for my money it is also undervalued and think the last of my scenarios is still being conservative, although it looks like the market disagrees.

I'd like to pick your brains on something because the more I look the more I like this company's direction. It appears that there was a big re-rate beginning of the year when an analyst upgraded the forecast revenue for FY2020 from 90 to 100M, but still had target price of 245p. However, we have seen through the regular trading updates that they have increased bookings substantially this year. Company is going profitable this year with FY revenue "confident" predictions from company over (and possibly significantly over) the 100M of FY2020.

This stock seems to be very overlooked and has built a framework which can generate profits and increased market share for the future. Is this stock fairly priced with what we know currently? What could be potential downsides?

I'm invested in both AVCT and NCYT because they have different investment theses for me. NCYT financials and expansion opportunity are very underrated, it has been tanked by the DHSC dispute, shorting on the French exchange and poor investor relations. All don't really affect intrinsic value. PCR is still the gold standard and they are improving it all the time. AVCT is revolutionary tech but hasn't got market presence yet. Both are getting royally gnomed by the govt and their decisionmaking, but I think there is plenty of space for both to grow a lot as the market is only going to expand.

Glad that this British company is getting hamstrung by the DHSC for ... seemingly no reason, while supporting foreign companies and at the same time asking British investors to support home-grown industry. What a joke. I think ultimately this just goes to show that Tories won't stand by British industry ... they'll stand on it.

I am no conspiracy theorist but it certainly appears to me that Novacyt is an unlucky victim of a prolonged operation by the UK Govt to cover up their own incompetence, or possibly corruption. ttps://blogs.bmj.com/bmj/2021/07/11/why-all-the-secrecy-around-innova-lateral-flow-tests/?utm_campaign=shareaholic&utm_medium=twitter&utm_source=socialnetwork