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The OMG newsletter recommends at least 15 companies each month, using the writers’ experience of small caps to give you a winning edge. Last week they wrote about Amryt Pharma and SysGroup. Read about these Opportunities 4 Material Gains!
Mid-week Tip
Orphan Disease Opportunity
Amryt Pharma (LSE: AMYT) 166.5p Mkt Cap £529m. It has proved to be adept at acquiring treatments with potential to build revenues and it has become a leader in rare and orphan disease treatments. Management has shown that it can identify acquisition opportunities that can enhance earnings. The focus is niche diseases that do not attract the interest of the large pharma companies. The latest acquisition was Chiasma, which has developed and launched Acromegaly treatment Mycapssa. This involved the issue of more than 1127 million shares and that has held back the share price since the deal was announced during May. The global market for Mycapssa is estimated to be $800m. The drug is priced at a level designed to facilitate access to the oral treatment, which is more attractive to patients than the injectable rival. The existing Metreleptin sales force is being used to sell the drug, while the Chiasma sales team can sell other Amryt treatments. Monthly orders in October were more than treble the January figure. Costs are being reduced and Amryt has identified a reduction of at least $50m a year. Revenues for the three existing treatments continue to grow and there is significant uplift potential from approval for Oleogel-S10. There could be further short-term volatility in the share price and investors need to take a long-term view. Buy.
Results Preview
SYS – 30p – Recovery to acquisitive growth
SysGroup (LSE:SYS) Mkt Cap £15m Interims Monday 22nd November. Pre Covid, SYS rated as an acquisitive growth stock in an attractive consolidating sector. Rolling-on to the interims which are half-way to the year ending March 2022. It expects to report a 16% fall in revenue for to £7.58m of which around 70% is sticky reoccurring income. The issue is that new customers are deferring and curtailing expenditure decisions and face2face meetings that may help to increase the sales pipeline remain constrained. SysGroup cloud-based services support clients strategic and operational IT requirements. Aimed at enabling clients to free up resources, grow their core business and avoid the distractions and complexity of inhouse IT services. The Covid pandemic should have made the corporate tech sector even more relevant. The net cash position should have improved from £1.17m to £1.96m.Given that the organic recovery should start showing SYS make a medium term Buy
Reviews
NWT – 44.50 – Director Dealt a poor hand
GDR – 18p – Missed the Covid surge
TRCS – 1000p – Williams benefit to come
- – 29.25p – Freight success
CGS – 374p – Order conversion declines
MNO – 13.25p – Transmission contract
PRES – 78.5p – Reduced loss
PTD – 55.5p – Ethiopia reassurance
Finally:
A rogue set of figures could speed-up the slow-motion economic growth v inflation narrative.
OMG! Opportunity for Massive Gains is a Premium Newsletter on ADVFN with two reports each week written by experienced small cap specialists. To get trips like this every week, sign up here.
