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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 Ondo InsurTech, Attraqt Group and Applied Graphene Materials. Read about these Opportunities 4 Material Gains!
Mid-week Tip
CANDO
On its recent listing Ondo InsurTech (LSE: ONDO) raised £3.5m at 12p with 25p warrants, to roll-out its compelling home leak detection technology to Insurance companies. It is estimated that $17bn of water damage claims are made annually and LeakBot is proven proprietary technology that helps reduce these claims. The small easi-fit LeakBot device and software alerts the house owner /policyholder that there is a leak and can also call a plumber to fixit. The estimated market is 97 million home owners who could benefit from lower insurance premiums if they fitted the devise. This makes it a win-win, as insurance companies also benefit from reduced water damage claims. The LeakBot, is sold to insurance companies on a SaaS model at a recurring fee of around £2 per user per month. The insurance company may give the LeakBot to the house owner who will receive an early warning that a pipe is leaking that previously would have only be obvious after considerable water damage is done. The LeakBot is estimated to have a 5-year lifespan and to cost less than £15 to produce in volume. Ondo is targeting breakeven within 18 months as these contracts are closed. Ignoring the Homserve Loan , after cost we estimate there is around £2.5m cash to progress the business which should be sufficient for gaining commercial traction. At the current 11p it makes a speculative buy before the hoped for news starts to flow.
Results Preview
Hockey Stick
Attraqt Group (AIM: ATQT) 30.5p (30-31p)Mkt Cap: £61m. ATQT provide AI (Artificial Intelligence) search and SaaS solutions to online retailers and brand owners in order to significantly improve the online shopping experience and sale.. The platform enables internet retailers to personalise services to individual customers, in real-time, across both online and offline channels (omnichannel) It business has been developed with acquisitions and fund raisings the last one was in October 2020 a £4m at 32p. The Interims to June 2021 remained loss making but revenue momentum was reported to be building. The interims showed a cash outflow of £1.3m and net cash of £3.5m- we would feel, ‘shop-lifted’ if further funds were needed other than for an Earnings Enhancing acquisitions. Its 73% gross margins could create a Hockey Stick effect on profits as revenues increase. Medium Term buy
Jam needed
Applied Graphene Materials (LSE: AGM) 20p (19-21p) Mkt Cap £13m AGM harness the super power material of Graphene which its strong with high electrical and thermal conductivity and can be used to make products better. Over the last 10 years AGM have raised over £36m most recently at 41p with Institutional investors such as IP Group 11.5%, Herald 9% by making enough promises for Jam tomorrow to re-float the Titanic. The finals to July 2021 reported that 40 products were available to distributors, but revenue was a mere £123,000 with a negative gross margin and operating expenses of £3.5m making a Loss of £3.6m. Wednesday’s Interims will report on the progress of a ground-breaking new range of eco-friendly graphene that helps improve sustainability of its client’s product formulations of paints, coatings, and composite materials. We are generally too kind and patient with companies creating exciting new ‘potential’ products. Wait.
Reviews
XLM – 40p – Pocket a Profit
DBOX – 11.25p – Model working
BOKU – 117p – Bulging eWallets
PGH – 331p – Lagging recovery
KETL – 194.2p – Coming off the boil
MER – 210p – Resilient business
SBTX – 33p – Disappointing progress
MERC – 34p – nDreams uplift
PRES – 88p – Recovery on track
EAAS – 10.75p – New e-charging service
IGR -73p – Director buying
Finally
It’s already been signalled that US interest rates with raise further from 0.5% but the pace of increase is the worry barometer of whether Inflation or Recession is its biggest concern. In a relative way inflation is better for markets than recession.
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.
