Allied Minds Share Discussion Threads

[mrwhits1] 15/7/2015 12:44

worth a read,

hxxp://www.shareprophets.com/views/11961/allied-minds-still-a-sell-after-results-3-times-overvalued

makes a good case for the downside IMHO.

regards

mrwhits.

disclosure - short ALM.L

[hydrus] 15/7/2015 12:31

Hpcg I think that's about right. The issue with ALM I guess is that at its current market cap some considerable success is already baked in.

[hpcg] 15/7/2015 12:24

I agree with alphaville it is VC and should not be valued on an earnings multiple. However as a VC fund it should be valued based on NAV which accumulates all the current knowledge about those that will fail and those that will succeed. As per the grey there is only a sanity check on NAV of the components when they sell some of the asset for more funding.

The alphaville argument, like some of the longs in the run up to 700, was that there are so many opportunities that one is bound to be a multi-billion blockbuster. That might be the case, it could even be more than one. It could also be zero. Until value gets a bit more concretely defined follow the chart.

[hydrus] 15/7/2015 12:13

Sorry bamboo I don't know but that's a good question

[hydrus] 15/7/2015 12:12

The moral of the story for me is all these IP companies are interesting but the vast majority of people, me included, have no idea what a reasonable valuation is and really what the prospects are so its firmly in punt territory alongside NSCI, TEK, IPO, IVO. I'm punting on the smaller ones but maybe sensible to split across all of them and cross fingers.

[bamboo2] 15/7/2015 12:10

FWIW, while I know many on this BB "don't do" charts, the H&S hit its target today.

Interesting about NSCI. I am very keen. How did they get the Glucosense investment, when IPO Group are signed up as Leeds Uni's preferred partner?

[ifthecapfits] 15/7/2015 12:06

Reads well - and thinks "undervalued".

[elcapital] 15/7/2015 11:41

ftalphaville today:

So, Allied Minds
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reason i wanted to raise this again is that it has become clear to me recently that lots of people think I said sell when the chairman said he was stepping down
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What was that -- end of April?
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Seems this story has gone far and wide
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But I didn't
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All i did at the time was speculate over whether he might now off load some stock.
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this is Mark Pritchard btw
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And he hasn't
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As far as I can see he hasn't sold a share -- still No3 on the register.
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I'd speculate that the reason he hasn't done so is because -- having founded the company and having a decent view of the news flow over the coming months -- he reckons there no reason to be selling stock.
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yeah?
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This company is basically an option machine.
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For ever -- or at least for the foreseeable
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Across umpteen growth sectors
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From semi conductors to drugs to advaced wireless

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it's madness to start trying to put revenue multiple valuations on the thing
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it's VC
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I'm not the only one who thinks this company is still strangely undervalued
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Neil Campling of Aviate, who we primarily like cos he doesnt like Stick Internet, pushed out some stuff over night

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This was on the back of the Micron story -- supposedly getting Chinese interest
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Incoming grey
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Micron +10% on reported (WSJ) interest from China. This has nothing to do with the memory cycle…but everything to do with technology IP and China’s intent.

Chinese government believes there is substantial ROI to be gained from technology investment and has put together two funds to accelerate technology investment, especially in the arena of semiconductors and digital technology to wrestle some of the control from across the Taiwanese strait. The Sino IC Fund is funded by central government to the tune of 120 billion RMB (roughly $20 billion), scheduled to be spent between 2014-2017 by and 2017. Additionally, local governments and private equity funds have a 600 billion RMB (roughly $100 billion) fund specifically targetting M&A and strategic acquisitions of foreign companies with key technologies. So there is $120bn of Chinese technology IP focused money seeking a home.

The Chinese market and industry has been suggesting a significant focus on the memory market in recent months. Head of the CSIA (China Semiconductor Industry Association) previously confirmed 70% of Sino IC was set aside for chip manufacturing and 30% on chip design. Or in other words the entire fund was set aside for the semiconductor complex. No wonder China imports 5x more semiconductor chips than domestically produced. The logical way to scale the innovation curve quickly is to ramp M&A with a focus on R&D and next generation technologies. Micron for example has scale, proprietary memory IP, and a A* star list of customers (led by a company who can’t be named but is coincidentally the largest company in the world).

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China has some production in NAND in the form of a foundry, XMC, but this in turn is a partnership with Spansion and early this year collaborated further by signing a deal with Spansion to develop 3D NAND. The interest in MU, if the WSJ article is to be believed, is probably a sign of intent that China wants to get into full scale memory technology and production, which Spansion’s small size and footprint doesn’t provide.

The VC of CSIA, Professor Wei, as referenced above also happens to be lead professor at Tsinghau University focused on microelectronics and led the advisors on merging Spreadtrum with RDA, taking both companies off Nasdaq and reformatting to a Chinese corporation under Tsinghua Unigroup. (Similarly Omnivision, with considerable IP in image sensor semiconductors, was bought out by Chinese PE firms). Tsinghua Unigroup is in turn 51% owned by Tsinghua Holdings which in turn is owned by…..Tsinghua University.

This movie, in a related technology industry, has played out before. But most Western investors and observers will have been unaware of it. However, they may know the conclusion…

ZTE has built one of the largest patent portfolios in the world. In fact, it has been awarded in the top 3 of patent awards globally every year for the last five years. (and who had the highest global patent awards last year….another Chinese global disruptor, Huawei).

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This latest “interest” from a Chinese, state backed conglomerate buying its way to leadership may ultimately fail based on price and cycle timing. But that misses the wider implication of another step in a considerate, deliberate mosaic designed to buy and build China into a considerable leading edge, IP based, technology leader. Whether successful or not in acquiring Micron, the intent is clear. Which, in turn, should support the value of those semiconductors companies with IP edge and technological disruptive solutions. ARM remains a global leader and pioneer in this regard, and has an unenviable position having taken over such leadership from previous IP pioneer Qualcomm. So who could be the next ARM? Little is made of another UK listed, IP focused, cutting edge technology disruptor….. Allied Minds.

And, specifically (with respect memory and Technology IP), Allied’s subsidiary Spin Transfer Technology (STT). Which happens to be an IP led, next generation memory semiconductor company with a proprietary doubled spin-transfer torque MRAM memory technology - essentially a speed and reliability that static memory (SRAM) can only dream of and with the non volatility of flash memory which compensates this non volatility with slower speed and lower reliability.

Spin Transfer Technology was valued at $250m on it's last financing. But this wasn't a technology formed in recent weeks. It was incubated back in 2007. Ten years later could see the most significant breakthrough in semiconductor history since the origins of Moore's Law. Without trying to bamboozle with acronyms and jargon as is oft the way with technology analysts the simple fact is heavyweights Samsung, Hynix, TDK, Qualcomm, Global Foundries, IBM, Toshiba, Intel, TSMC and many others are working on the technology and science of next generation memory semiconductors. Such is the stability, speed, power performance, and cost dynamics in STT's technology the potential is to revolutionize a market within semiconductors worth some $300 billion revenues a year.

We remain buyers of ALM LN.

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Now, to be clear I dont think there is any chance of the Chinese buying Allied Minds
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That is not going to happen

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Allied Minds key relationship is with the US military
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Heh. Chinese buying US IP silo. That'd be interesting.
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That's not going to go to china
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However...

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All this activity (and money) puts a spotlight on AM tech
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Spin Transfer Technology is just one example
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Neil Woodford pouring money into this thing
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Unlisted currently
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Just go and look through the AM portfolio
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Do your own work
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Emoticon

[hydrus] 15/7/2015 11:05

I think that NSCI is a better bet for now. a £70m portfolio company with near term product launches from subsidiaries. Similar model to IPO, IVO, ALM but with less formal university relationships and hence no commitment to fund ventures they do not believe will lead to much. They pick and choose.

[mrwhits1] 15/7/2015 10:45

just look at those losses Elcap,...

year on year, massive cash outflow.....


and forecast to get worse for at least the next two years......

it's an investment company, and should be valued as such, it just might take a short time for the market to realise and mark down the share price to reflect that...

no jam tomorrow for this one I think, as the whole sector is overvalued.

regards

[elcapital] 15/7/2015 10:39

You are most likely totally correct. just pointing out the potential with this type of company. I am bearish, not sure if I will pull the trigger though

[mrwhits1] 15/7/2015 10:35

@Elcap,

but that has already happened, look at the exponential chart up to 700 odd p, on no news, pure speculation.

and its not the only company in the sector this has happened to, look at the US companies in the same sector...

hubble bubble, boil and trouble......

regards

mrwhits.

[hpcg] 15/7/2015 10:32

tipjunkie - I can think of many instances when alphaville have called it right. This year Afren, Shanghai and Shenzen bubbles to name but two which immediately spring to mind. I am keeping a weather eye on Rocket Internet which they keep highlighting. With these spec bubbles though timing is very important because the madness of crowds can keep a security inflated for a long long time before it crashes.

[elcapital] 15/7/2015 10:26

Yes, fair comment mrwhits

My fear though is if one of the many companies suddenly takes off, which can happen very quickly in this space, and then there is a speculative bubble.

[mrwhits1] 15/7/2015 09:25

@Elcap,

value it as an investment company, which usually trade at a discount to asset value.

I make that about 180p(share value not asset value), which is why I'm short ALM(since 599p).

Best of luck either way.

regards

[elcapital] 14/7/2015 13:14

it may be bullish or bearish, we do not know.

[tipjunkie] 14/7/2015 12:06

I cannot think of one single instance when the 'professionals' on alphaville were right about anything at all

[elcapital] 14/7/2015 12:04

There will be some news n ftalphaville tomorrow. This was just said:

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I had promised an Allied Minds update -- but sorry, you will have to wait another day
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Not a big update in anycase -- but i just want to check something

[elcapital] 14/7/2015 12:00

These type of companies are very hard to value, its all blue sky. I wasnt short, as I feared an announcement that could spike it up

[tipjunkie] 14/7/2015 11:58

it was great from 220 to 700 though!!

[elcapital] 14/7/2015 11:34

Are you still short dasv? Been a good one so far, and doesnt look too good chart wise for the bulls

[ifthecapfits] 14/7/2015 11:18

All gone a bit quiet here. share price drifting lower. No news. Will contine to drift I guess.

[dasv] 16/6/2015 09:56

LiquidKid - yeah totally inconspicuous wearing a VR headset in a public place...

--

hpcg - thanks for thoughts. Big cash pile but ludicrous multiple of sales. A lot of jam tomorrow baked in.

My short isn't big either.

[hpcg] 15/6/2015 17:18

dasv - I only have a small short here, alas, and I agree that 500 is a good target, but this is an investment company that isn't really worth a premium to NAV. Winners and losers will even themselves out for a while and it will need a really big winner to move the needle. 250p is still way ahead of NAV so if the froth comes out and the chart breaks down below 500 it could easily head there.
I can't think of any reason for those up not to take their profits and for those down not to cut their losses. Depending on the wider market I'm tempted to close at 500 and reload on the bounce.

[liquidkid] 15/6/2015 17:04

Would of thought that
the consumer version of the Oculus Rift virtual reality headset
being trumpeted by faecebook over the weekend would have ALM up about 20% today.

Isn't this Allied Minds / Gray Matter company?

Optio Labs bought Oculis a month ago in April this year

Oculis is developer of the award-winning products PrivateEye and Chameleon.
protect data displayed on a user's computer and mobile device screen from
visual eavesdroppers.

- basically it's a porn filter.

What I didn't know was that both these hitech inventions are the most innovative way of viewing said porn...

stick a box on your head with screen inside - job done!