The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
In my view the best value assessment you can make for companies like TEK is to look at the balance sheet.
- It is reasonably light on liabilities.
- Its cash exceeds its liabilities.
- Its assets are almost entirely equity investments. The valuation might be variable but IMO higher than the current market cap.
From a NAV perspective the question I ask is whether the assets are trading at a discount or premium to the shares. IMO, right now despite the valuations they certainly are.
As to the current investments
- Three are commercially operational. AFAIK Guident is on course to commence commercial operations.
- Bellascura's value if (big if) it receives FDA approval, IMO, will surge.
- The teams running Salarius and Guident have impressive resumes.
- TEK does not (and will not) divulge any commercial info but will update immediately on commercially significant activity.
So to me the investments seem largely sound. I am personally lukewarm on Lucyd.
And then there is the services side of the business which appears to be growing and perhaps on the way to supporting the group's operating costs. This is Cliff's personal baby, his chance to show himself as a capable manager, more than just an equity investor.
My only gripe with the company is their accounting policies w.r.t. recognising fair value as revenue on the income statement (IAS39, FRS9). These policies are used by banks and other financial trading entities who actively trade instruments during the year. To me, it feels wrong when used on assets you expect to hold for more than 12 months. Also I think many investors (at least PIs) find it confusing seeing unrealised P&L on the income statement which cannot be reflected on the cash flow statement.
Well said!
Amazing how loss averse investors are. Many will rather wait for total annihilation than exit at 20% or other level.
I recommend the Little Book of Behavioural Investing [https://www.amazon.co.uk/Little-Book-Behavioral-Investing-Profits/dp/0470686022], definitely worth a read.
"valued at 2p, with 200 restaurants currently in play"
Someone else might say "overvalued at 2p with (less than) 200 restaurants". Worse still, the money will run out by Q3 2020 since there is zero revenues coming in. Mr Market is not a fool, the SP will continue dropping until new funding is secured.
"Imo I don't care who is CEO so long as he has proven himself elsewhere and gets the job done..."
Something is badly wrong if/when the CEO's job is solely to attract restaurants to the platform. This is only one part of the equation. The bigger part is generating sufficient revenues and managing costs. There is nothing mentioned in this fellas resume to suggest he is CEO material.
But again, this company and its founder is more interested in hyping up the share price than being commercially viable. Why do you need a new CEO to try out a telesales strategy? Because the goal was simply to revive the share price. But good old Johny Private Investor isn't falling for it this time!
"I had bought some back here but monty5662 posting about his "it's time to get rid of Sanj" posts and knowing he has a hotline to Aidan so this might just happen has meant I have now got rid of them"
Lord, what a muppet! Trading on hearsay!!!
I was captured by the Shorter Army. They released me to deliver this message.
"Ordinary Private Investors of planet MTRO, our fight is not with you.
We have attacked because we despise the self-serving Twitterati swine who call themselves your leaders.
We well keep dragging the price down until they break.
Once Align "Research" and other rampers take their losses we will release the price.
The rest of you, just hang on and we will give you your money back."
P.E.A.C.E.