Firering Strategic Minerals: From explorer to producer. Watch the video here.
Hi Claire - I agree to an extent with what you are saying but this is a huge oversimplification. The world already comfortably produces enough food to feed a much larger global population, but a significant percentage of it gets wasted (in 2011, the UN estimate was about 1/3 of all food for human consumption gets discarded). That problem is not eliminated by lab grown meat. A significant problem relates to the infrastructure and logistics required to distribute perishable foods. Increased urbanisation perhaps makes that a little easier but I am not convinced it will make that much of a difference. I have read that theoretically you shouldn't need to refrigerate cultured meat as the bacteria present in a slaughtered animal is not present in cultured meat, but the expectation was that manufacturers will err on the safe side and refrigerate anyway - I think I'd agree with that. I agree with your point that this will come down to price. I can already buy premium products which are notionally more environmentally friendly but in many cases I simply choose not to. For example, in spite of its multi-billion dollar valuation I have never bothered with Oatly milk. it's available in my local supermarket, but I am happy with normal dairy milk and milk costs less. I think my attitude to this is the norm. Once the products cost the same (and arguably to shake off the "frankenstein food" label, they may need to sell at a discount) and once they have the same taste and texture, then there is a good chance this will take off. Many challenges along the way though.
I think you need to be wary of being too dismissive. The article is based on a paper from Oxford Uni Post Doctoral researcher from their Physics department. I for one would not claim to compete with their level of knowledge on GHG emissions and carbon sequestration and I suspect you can't either. We should not be too dismissive of facts just because they don't match our preferred narrative. However, the transition to lab grown meat becomes more carbon neutral/negative if the energy source is derived from renewables, so the success of lab grown meat goes hand in hand with decarbonisation of the grid i.e. we are reliant on many stars aligning. UK making good progress on this, but US less so.
Hi - It is an interesting product but I don't know how big a market this would turn out to be. Promoting this as better than formula milk for environmental reasons is all good and well, but I suspect part of the driver will be to promote it as being more or less equivalent to breastfeeding hence making it more attractive beyond just the environmental aspects. I would accept that it may be better than formula but it is categorically not the same thing as breastfeeding. To name but a few differences, actual breastfeeding passes on mothers antibodies, helps mother to child bonding, helps the development of the baby's facial structure, reduces mothers risk of breast and ovarian cancers and osteoporosis etc. Man-made breastmilk will not have these advantages so for those who don't wish to or can't breastfeed it will come down to cost, how much they care about the environmental sector and exactly what benefits of the man-made milk can be proven (noting that it is absolutely not the same as breastfeeding). It will capture some of the market, but possibly not that much. Breast milk donation is already a "thing". It will also be competing with that.
Desmond45 / JackieWeaver - I thought you had me on mute?!
Please explain in a well thought out, non-paranoid, logical manner how any comment I make on this board can have a material effect on the share price?
And as an aside, I have said on several occasions that I hope this share price multiplies many times over. I am also realistic to the very distinct possibility that it won't. Are you?
TwoCents - i said they had failed to deliver shareholder value, not failed outright, but again, that's besides the point. In the case of ANIC they had the opportunity to get more money from PI's and I don't think the dilutive effect would have been a big deal. They chose not to take advantage of that. Now I don't pretend to know AIM or other company rules especially well so it's possible they were legally bound within some limits of what they could increase the offer by (they increased from £2M to £3M when there was £17M of applications). So I am asking why ANIC or probably any other company prefer II cash and are happy to knock back PI cash. I don't honestly know, but I am floating that PI's are more awkward to deal with and that II's are better at showcasing the business etc. which in turn is likely to make their access to future funding more straightforward. Maybe having a high % of PI's looks unprofessional or too speculative to the wider market. Don't know - just putting it out there.
TwoCents - It's easy to present II's as being the face of all things evil. I don't know anything about AFC but I assume you are talking about AFC Energy rather than Aberdeen Football Club. It's just possible it's a really cruddy company with really cruddy management who have destroyed shareholder value. Most companies fall into that bracket (and I accept this one might as well). I think the figure is something like the entirety of growth in US stocks since 1990 is accounted for by 1.5% of listed companies and globally the entirety of growth is from 1% of companies - so the remainder are doing what exactly? I used to do some work for an engineering technology company who are also now involved in Hydrogen. They shall remain nameless but they are still listed on AIM (under a different name from when I was involved with them). They were simply charlatans. When I did work with them they were big in turboexpander and turbocompressor technology, then it turned out their product was rubbish and that side of the business closed. They bought a heat exchanger company and a metal bashing company - they turned out to be rubbish too so they got binned for a fraction of the price they were purchased at. So they bought an air purification company and now they have something to do with Hydrogen. That's been a whistlestop tour of a typical engineering technology company and their aimless wanderings through various hair-brained schemes. All the time the leadership kept raising cash and kept destroying shareholder value. All the time the man at the helm has been the same and has not been held to account. Lets just call him "Big Phil" (as that's his name). But feel free to blame II's for the failure of AFC or any other listed company for that matter to deliver shareholder value. Most companies just aren't very good.
If the offer to private investors was so oversubscribed, why not just take the extra money rather than limit it to £3M? If the logic goes that every penny available for them to invest can be multiplied several times over, then why not have extra pennies? I don't think the dilution effect of an extra few million would make much difference? Is it because ANIC don't actually want a huge % of their shares held by private investors and they would rather large chunks were held by Institutional Investors (who probably behave and buy/sell in a more predictable and manageable level)?
PS - someone posted last week that they wouldn't want to be short on ANIC right now. Well.........looks like there is short term profit to be made with that strategy and I don't especially begrudge it.
OWLS, thanks for the feedback. I have a large chunk of my portfolio allocated to IShares World Momentum Factors Tracker ETF (IWFM) so am in agreement with the general momentum strategy. I think going for IWFM is less work than your suggestion but very possibly not as successful. It's almost tripled in price since 2014 but not done so well of late. If you want less effort, then maybe this is one for you to look at. The only reason I queried whether you had a "dartboard approach" was selling after 12 months come what may. I know you said this is because you rely on investments for income, but if you have several investments and after 12 months some are still meeting your momentum rules but others aren't but then you sell it regardless i would have thought that negated a lot of your upfront effort. All said and done, if it ain't broke, don't fix it. Wishing you well!
If you only invested in companies whose business workings you knew inside out, then you would probably end up investing in the same industry as you work in. That would be putting all your eggs in one basket as in the event of a downturn in your industry you would be at risk of losing your job and your investment wealth.
I fully agree that this stock is driven by news, hope and hype and to an extent so what? As long as you know this is high risk, just embrace it. Yes, you might lose your shirt, but you might also back a winning horse.
Pre-2008, everyone thought they knew that banks were boring and solid and these "safe-ish" assets formed the bedrock of many a portfolio. Turned out nobody understood the risks and investors got the shock of their lives to find out the level of risk they had taken on and were dismayed when the house of cards came tumbling down. At least with this stock, unless you are a complete fool you go into it with your eyes open knowing that it's risky (and OK, there may be a few fools who post on this board - hahahaha). I personally think this visibility of risk is better.
OWLS - I don't usually post on this board. All my posts have been on Agronomics (ANIC) but I am an SMT holder and saw your post and couldn't help myself commenting. My apologies if this comes across as being facetious - I can assure you it is not meant to be and my comments are genuine.
If I have understood you correctly, your investment strategy is as follows:
Step 1 - Purchase share
Step 2 - Ignore share for 12 months
Step 3 - Sell share irrespective of performance
If I have picked you up correctly, that is absolutely brilliant. It truly makes me smile that 2/3 of your investments make money via this strategy and calls into question the value of any active fund manager (I am almost certain most active fund managers won't make money on 2/3 of their investments).
Is this a recognized strategy? How did you come up with it? Can you logically account for why it appears to be as successful as it is? Is there specific types of stock where you think this is more likely to work or can you more or less take a dartboard approach to it (if I was brave enough i would be minded to take the dartboard approach).
Agree that is an interesting article. To some extents it is reassuring that this is difficult stuff. If it was easy then the barriers to entry would be low and every man and their dog could get in on the act. I would assume that would mean that although cultured meat could grab a bigger section of the market more quickly, the individual companies would be valued at lower multiples of their earnings because the industry would be overly competitive. So my logic would be difficult = high tech = high barrier to entry = higher company valuations so you can get a higher valued company on a smaller share of the overall market. This is probably a good thing, but won't last for long. My biggest fear is the comments re. having to resort to GM which may well make access to the EU market much more difficult. Probably not a problem for the US though which is a worthwhile market even if that was the entirety of the market.
idg69 - you have a genuinely interesting view that this is not a high risk stock. I am invested in this precisely because I think it is high risk. If it was low risk, then I would assume that would result in a high chance of low returns. If it's high risk, that implies a high chance of losing it all but a small chance of astronomical gains. It's the latter I'm after! The acknowledged long timescale of this stock would almost seem to go hand in hand with it being high risk - the further out you push the prospect of market success (and for this stock it might be 10 years+), then does the passage of time not automatically increase the risk as predictions become less and less valid because you have no idea what disruptive events might occur which will blow the investment case out the water. Think of your 2011 self - did you think this would be what the world was like in 2021? I didn't! So I am genuinely interested in a well thought out justification for this stock being low risk, as that may force me to adjust my position.
DeuceJaxon - your view on shorters is too simplistic. If this stock is being meaningfully shorted and the share price is therefore artificially held back, then you are unequivocally benefiting from this. The consensus view on this board is that ANIC is one for the long term - at least 5 years and probably closer to 10 years. I'm going out on a limb and assuming you share this consensus view and are holding for the long term. So if the share price is driven down now, this is giving you the opportunity to buy at an undervalued price and when the re-rating comes due to news flow of portfolio companies achieving market success, you will re-rate from a lower starting point and thus make bigger gains. Conversely, if the shorters are right then this is keeping the price low right now and if the market collapses, you will fall from a lower starting point, thus your losses are limited. Either way, you win and what's not to like. You just have to see things from a view point that does not stop at the tip of your nose.
100Cups - your entry point doesn't matter. Drip feed money in to this every month without really looking at the share price. Some months you'll buy high, others you'll buy low and it will even out in the end. I don't think anyone is buying this share because they are particularly fussed about the market valuation right now (unless you are a trader nipping in and out of this stock). This is an industry in its infancy that doesn't currently have any meaningful presence in its target market. The market potential is enormous (literally trillions) so the hope is that the share price trades on several multiples of its current price in say 10 years time. Does it really matter if that is several multiples of 25p, slightly fewer multiples of 35p or fewer multiples again of 50p? To me, not really. In 10-15 years time, ANIC's market cap could easily be several billion. However, and you are only allowed to whisper it on this bulletin board, it might not! You have to accept that it might be worth zero. Most companies fail, and I have no doubt that many/most of the companies in ANIC's portfolio will not succeed, but there is indeed a whiff of a chance that one or two of them might just be spectacular winners. You can't know which ones will succeed and you can't know over what time period but it should be clearer in 10 years if you can wait that long by which time you'll either have lost the lot or possibly made enough to retire. Today's share price is practically irrelevant though as can be seen by the disconnect between NAV and share price.
Ryesloan - I think in my fag packet calculation I did assign more than the book price to ANIC of BluNalu by a few multiples and arrived at a valuation of BluNalu which is less than 1/15th of the market valuation of Oatly, so I was merely observing that it is optimistic to look at the market value of Oatly and then make any statement to suggest that BluNalu could be anything like that. Anyway, we will need to agree to disagree.
RyeSloan - I think we are missing each others points here and this is in danger of becoming a bit shouty. I'll have one last bite at the cherry to explain my point. A previous poster highlighted the market value of Oatly with the question being how much are BluNalu worth. The clear inference was that it could be the same order of magnitude. I am pointing out that this is exceptionally unlikely to be the case right now and the wider market would seem to agree with my interpretation. It is public information that ANIC hold about 5% of BluNalu and there is widespread speculation that BluNalu will IPO within the year. It's also public information that ANIC hold about 15 or 16 other investments. So if you very optimistically say that the market assigns about 25% of ANIC's total market value (currently £141M) to being purely due to it's 5% holding in BluNalu and that this is one of the few ways to gain pre-IPO exposure to BluNalu, then that means ANIC's holding in BluNalu is optimistically worth £35 million and if £35 million is 5% of BluNalu market cap, then BluNalu is currently worth £705 million give or take. It can't currently be worth anything like Oatly so it is unreasonable and misleading to other potential investors to draw that parallel. I note that Desmond45 has put me on "filter" - he clearly believes the alternative to this that I am an incredibly influential shorter who is single handedly holding back this stock by posting mildly questioning comments on an inconsequential bulletin board. Which of these do you think is more plausible?
RyeSloan - you have missed my point. The direct parallel was drawn by others between the Oatly IPO value and the potential value of the BluNalu IPO. There is no direct read across. The Tom Brady comment was tongue in cheek (I thought that was reasonably obvious) - the main point there was that Oatly's valuation seems partly tied to popular and influential backers. You have also missed that I have stated quite a few times that I hope ANIC do spectacularly well - for what it's worth, I actually believe they have a potential market value of > 100x current price, but I also accept the likelihood of that is < 5% and the timescale for them to achieve that even if they did could be beyond my investment horizon. You don't appear to want to hear any potential downside either - refer to my previous post and Google/AltaVista "confirmation bias".
Deucejaxon - Just.......aaaaaaaaaarghhhhh!!! Why is presenting an alternative viewpoint "trolling"? Someone highlights the exceptional IPO of Oatly and draws a direct parallel with BluNalu. I highlight why there are key differences between the companies and try to inject some mild humour to emphasize the selling points of these products are very different. This is trolling? Why?
As I have said before, I am not clear why anyone invested in ANIC only wants to hear the rose tinted spectacles version of the investment case and doesn't want to consider that it just might not work out. I think you should Google "confirmation bias" - or you could try "AltaVista-ing" it instead - oh no, you can't, because in spite of AltaVista being the market leading search engine of it's day with the world at it's feet, they fell by the wayside, got bought out by Yahoo and are now proverbial nobodies. You don't know and I don't know that the same fate could not befall BluNalu for any number of reasons. If you don't accept that it is worthwhile to hear that side of the argument then you could lose your shirt on this or indeed any other investment.
As you have probably guessed by now, I see some challenges to the assumption that the valuation of Oatly has any read across to BluNalu.
1 - Oatly have been around since the 90's - it's taken then 20+ years to get to the position they are in.
2 - Oatly sell a product for which there is a proven market - people are actively seeking non-dairy alternatives for dietary/health/ethical reasons + they get to jump on the no cow farts bandwagon. BluNalu have a theoretical market and people are not actively seeking a lab grown fish alternative. It's an entirely different marketing story and almost certainly a more difficult sell.
3 - Oatly product is sold from 90000+ outlets across 20 countries. BluNalu currently sells nothing to no-one.
4 - The celebrity backing probably matters. Almost every Oatly article s accompanied by the comment that it is backed by Oprah, Jay-Z and Natalie Portman. Getting a heavy hitting social influencer onboard is likely to be worth something. Perhaps we could get NFL star Tom Brady on board with a quote like "Hi, I am multi-superbowl winning Tom Brady and I won't eat fish unless it's grown in the finest quality bioreactor. And by golly, that bioreactor had better be made from nothing but the best ASTM A182 dual certified grade 316/316L stainless steel, sourced from an American steel mill and powered by nothing but the fumes of Euphoria"!
5 - If you believe efficient market theory, the current value of BluNalu should already be priced into ANIC's share price.
These companies are at entirely different stages with different proven markets. I admire BluNalu, but they just won't be valued the same as Oatly (yet). Hopefully in 5-10 years time that could be a different story, but I would rein in expectations for such a mega-IPO.