Lockdown lifts, Two stocks to watch: MNB and ONE
Published 25-OCT-2021 09:35 A.M.
7 minute read
Melbourne is finally out of lockdown. Great job to anyone who did it tough during so many days of isolation and made it through - we are going to go out and enjoy the day today.
Speaking of welcome milestones, during the week one of our long term holdings Minbos Resources (ASX:MNB) convincingly ticked past a 500% share price rise since we first invested over a year ago, a huge milestone for any small cap investment.
Before we invested in MNB, it had been a long hard road to bring its Angolan phosphate (fertiliser) project to reality - MNB listed back in 2011 and there were bumps in the road early - because it took so long to progress MNB was trading at just a sub $10M market cap back in late 2019 when we first took a look at potentially adding it to our portfolio.
We weren’t overly excited when we first looked at making an investment in MNB, it looked a bit stale and unloved, plus the share price had been pounded after many years of delays, but after a few meetings with senior management, the project looked good to go and the story really grew on us, we also really liked CEO Lindsay Reed and his ESG focus.
About 6 months later we decided we would get involved and added MNB to our portfolio in August 2020 at 3¢ equivalent (post the share price consolidation that happened that November) - here is our original initiation commentary on why we invested.
What we liked was there was almost a decade of hard work, goodwill, in-country relationships and value added to the project, but the stock was unloved due to how long things had taken - it looked undervalued to us at the time.
This is similar to our investment in Oneview (ASX:ONE), who before we invested had spent many years and tens of millions of $ developing its tech platform to improve hospital patient’s experience and provide telehealth via bedside tablet.
We believed that the market wasn’t valuing the millions of $ invested, many clients signed on, recurring revenue OR the years of valuable industry learnings by ONE.
We thought that a huge amount of value had been built but the share price was languishing because existing investors thought it had all taken too long - that’s fine for incoming new investors like us.
Out of the hundreds of deals we look at each year, myself and Jason are working hard to find and select the companies WE think are going to succeed over the next few years for our portfolio’s at Next Investors, Wise-Owl, Catalyst Hunter and Finfeed.
We expect to make maybe five more new investments across all our portfolios this year.
We are currently looking to invest in more companies like ONE and MNB with advanced projects where there has been years of work, investment and progress and have had delays in the past BUT are now ready to unlock the value built.
We are participating in the upcoming IPO of Evolution Energy Minerals (ASX:EV1).
📰 This week on Next Investors
Yesterday, we announced that we had increased our holdings in Ecuadorian gold exploration company Titan Minerals (ASX:TTM).
TTM is an advanced stage gold stock with a 2.1Moz at 4.5 g/t gold (Au) (foreign estimate) at its flagship project, Dynasty. TTM intends to re-classify this resource as a JORC resource by the end of the year, and extend the resource beyond the current estimate.
With at least $18M in the bank, a strengthened team of industry heavyweights, and six drill rigs at Dynasty, we think that 2022 will be the year for TTM.
📰 Read our full take here: We Think it's Finally Time for TTM - Timed to a Turn in the Gold Price?
This week Oneview (ASX:ONE) announced a new $2.4M USD, 5 year deal to provide 235 hospital beds with its virtual care and digital cloud offering. USA based hospital Kingman will now use ONE's virtual care product, which marks the first deal signed under the Microsoft co-sell agreement.
The Kingman Regional Medical Centre in Arizona is part of the prestigious Mayo Clinic Care Network, which boasts 45 major hospitals in the US and is the undisputed #1 Hospital Syndicate in the US.
We think that the deal is very important, because if ONE can impress Kingman with its service, it opens up significant opportunities to leverage this success to onboard more hospitals in the Mayo Clinic Care Network.
📰 Full Analysis: ONE announces US $2.4M contract, leveraging Samsung and Microsoft partnerships
Alexium International Group (ASX:AJX) released their first quarterly results for this financial year. With sales revenue up 40% and cash receipts up 70% compared to corresponding period last year - it is a strong sign that AJX’s cooling technology is being well received by customers.
Revenues were driven by sales of AJX’s Biobased Cooling Technology to bedding industry companies. While sales in the last period were driven by existing customers switching to this new product, sales for this period were driven by increased demand for the product and customer satisfaction.
We think that this foreshadows more sustainable growth for AJX, and greater revenues for the future.
📰 Read our full take: AJX posts best quarter yet - upward sales trend led by cooling tech. CEO says more to come
The most exciting news for this week was our 2020 Small Cap Pick of the Year, Vulcan Energy Resources (ASX:VUL) signing its third offtake agreement in 90 days.
This time it was with leading global cathode manufacturer “Umicore” - for an initial five-year term and the start of commercial delivery is set for 2025.
Umicore will be the first European cathode producer, doing so at its Polish cathode materials plant - and is sourcing its lithium from VUL.
📰 Full Article: VUL signs third major offtake in 90 days
This week we looked at three exciting stocks through a macro lens.
Recent developments in the energy sector have shone a spotlight on Uranium. This week the world’s largest uranium miler, Kazatomprom, announced that it would back a new physical uranium fund and in a powerful moment for the sector. This was also followed up by an announcement that Japan would restart 30 nuclear reactors in order to reduce its carbon emissions.
Our long term uranium investment GTi Resources (ASX:GTR) has two exploration projects in the USA and is about to start an exploration work program in Utah.
Last week Strickland Metals, who are right next door to our micro-cap investment BPM Minerals (ASX:BPM), made a large lead-zinc strike - which sent its share price soaring.
This, coupled with the Zinc price reaching a 14-year high of $3944 per tonne, bodes very well for BPM's exploration projects.
With the news emerging this week that China wanted to curb fertiliser exports, our Angolan phosphate investment Minbos Resources (ASX:MNB) share price ran.
This news, coupled with an increase in fertiliser prices and a green ammonia project in their back pocket - the time is ripe for MNB to capitalise.
📰 Read our full take here: Three stocks to watch for the next few weeks
In our other portfolios 🧬 🦉 🏹
On Tuesday, the Next Investors 2021 Biotech Pick of the Year AND finfeed’s first ever portfolio addition Dimerix (ASX:DXB) announced ethics approval for its Phase III clinical trials on patients with FSGS (a rare kidney disease).
This marks the official start of the clinical trial, and allows DXB to begin recruiting patients in Australia and start collecting data to evaluate whether its FSGS treatment is safe and efficient.
📰 Read the full story: DXB kidney disease treatment Phase III trial officially begins
🌎 Mainstream Media:
Fertiliser / Potash (MNB)
DTN Retail Fertilizer Trends (Progressive Farmer)
Salt Lake Potash begs for one last chance (AFR)
China’s Curbs on Fertilizer Exports to Worsen Global Price Shock (Bloomberg)
No. 1 Uranium Miner Backs Physical Fund in Nod to Robust Demand (Bloomberg)
Why Nuclear Power Could Solve the Energy Crisis (TLDR News)
Japan’s Carbon Goal Is Based on Restarting 30 Nuclear Reactors (Bloomberg)
UK to put nuclear power at heart of net zero emissions strategy (FT)
European Battery Metals (EMN, VUL, KNI)
Just-in-Time Economy Becoming a Problem for Europe, Lagarde Says (Bloomberg)
Tesla Shifting to Cheaper Battery Chemistry Tried in China (Bloomberg)
Thiel-Backed Lithium Miner Is Said to Prepare Nasdaq Listing (Bloomberg)
Hydrogen / Green Energy
Forrest v BHP may be start of green M&A fights (AFR)
Giant China Project Leads the Rise of Renewable Mega-Hubs (Bloomberg)
Covid-19 Treatment (DXB)
Will New Covid Treatments Be as Elusive for Poor Countries as Vaccines? (New York Times)
Angola Politics (MNB)
African politics: Lourenço pledges to end Angola’s economic ‘storm’ (FT)
Have a great weekend,
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