28Oct 2016

Share Talk – Steve Shares 28th October 2016

steve-shares-image

Welcome to Share Talk and Steve Shares. This publication is an interactive update on what’s happening over social media and the trending stocks that have made the news this week.

We highlight the coming news and events in connection to your investments and holdings. So if you think that a stock or share or a piece of news will be in the spotlight soon, let Steve Shares know by contacting me via direct message @slarratt1 or by Tweeting the hash tag below and tagging me in. It is easy, use the hash tag of #ST (Share Talk) and add your company’s ticker i.e. #ST88E and tag me @slarratt1 so I can see what you are wanting Steve Shares to feature and I can share for all to see.

Steve Shares is here for everyone to have an equal voice over social media and not just within your individual discussion groups. The more readers that interact with this feature, the more news and thoughts can be known about your shares and their potential. Could your stock be a potential under the radar company that others could be interested in? Could it be a little unknown gem that you want to discuss or share a key piece of research on?

I provide a round up of Share Talks activities over the last week.

Don’t forget to follow Share Talk and sign up to receive weekly updates on what Share Talk has to offer and the news views and opinions on what matter to you. This publication will also be sent via email so you can read at your leisure.

If there are any thoughts or suggestions direct message me @slarratt1 so Steve shares can add to and for you, before we kick off can I please remind you of our upcoming free event with all proceeds going to charity.

Meet the directors of MTR, KGLD, MKA and RGM on 26 November

Share Talk presents our first ever Investor’s Evening at the Forest of Arden Marriot Hotel near Birmingham on the evening of Saturday 26th November hosted by Zak Mir, featuring Metal Tiger, Kolar Gold, Mkango Resources and Regency Mines.

Part of the Share Talk mission is to provide a platform for investors to be able to ask questions to the companies they invest in, often through our regular Q&As and podcasts on our website. This free event gives both the companies and investors a chance to talk to each other face-to-face in a relaxed environment.

Any profits made from the event will be donated to the Bradley’s Fight charity which we are proud to support.

To find out more and book your free place at the event, please register here.

Trending this week

Firstly

Thank you for your feedback on the last publication of Steve Shares, @dozzawba and @ShadowTradersGuild kindly put together a write up on their thoughts about Independent resource group (IRG) and was met with lots of discussion and I received several messages from holders and from people that couldn’t see a long term potential in the company until more facts are put on the table. It is nice to see people doing their research and evaluating new company’s and making informed decisions about their share holdings. Each and every person thanked them for sharing and wish to continue seeing new company’s being mentioned going forward and their potential. With that in mind ‘whats on next’ has covered two articles A big thankyou to @liamdillon_liam for offering a write up on Tern Plc (TERN) I have have been inundated with messages asking for a round up of Oxford Pharmascience Group Plc  (OXP) so have included that.

Again a big thankyou on behalf of everyone to @D1AMOND55 to his time and efforts on the bulletin boards in relation to Highland Natural Resources.

If there is any shares or people on social media that you would like to spread the news about let me know and I will cover these in ‘What’s on next’ in the next article.

Whats hot? Whats not?

The regulars…

88 Energy (88e)

News of the fund raising has left holders of shares scratching their heads this week. The last news from the management was that of being fully funded for their Icewine2 drill. Talk all over social media was of what the funds will be used for going forward. Several people are now happy to invest and hold over the longer term. There are many different guesses as to what 88e will be doing in the future with this fund raising. What are your thoughts on the news? Let me know on #ST88E and tag me in @slarratt1

Highlands Natural Resources (HNR)

Highlands natural resources holders this week have been counting down the days to an update on Helios2 and the clearance of the warrants. On friday they released news of a 3-6 feet gas flare, however they lost the logging tools and chose the safe route of capping the well. What are your thoughts for the company now that the main business concept has been proven to work? And now with gas being found at the field at helios2? Let me know your thoughts on #STHNR and tag me in  @slarratt1

CloudTag (CTAG)

News is still expected in relation to Cloudtag, I hope news comes soon for holders and I will be covering this story as it develops.

Sirius Minerals PLC (SXX)

Sirius Minerals announced this week that they have entered into a royalty financing agreement for its polyhalite project based in North Yorkshire. This is the first step in a two stage process towards financing needs of the development.Sirius has signed the deal with Hancock British Holdings Ltd, part of Hancock Prospecting Pty Ltd. Is this still a good share to be in for long term holders? Will the commodity price recover to previously seen highs?

Your thoughts and comments please on #STSXX and tag me in @slarratt1

Soloman Gold (SOLG)

In recent months there has been a constant news flow in connection with the company’s assets, different deals on the table with better offers, names such as Newcrest and BHP Billiton in talks with the company are very encouraging for shareholders. Their various projects are being explored and results are due upon completion. What are holders thoughts on results going forward? What are your longer term aims in regards to the share price? With the share price rises in the last few months, is now a good time to invest?

Your thoughts and comments please on #STSOLG and tag me in @slarratt1

Frontera Resources (FRR)

After Delays on its Georgia assets good news this week for shareholders, six new wells have been prepared at its South Kakheti gas project and will shortly receive completions in November.

The preparation of the wells comes following extensive work towards achieving its goal of year-end pilot production rates of 2,200 barrels of oil equivalent per day. This would result in monthly revenue of around $3.0 million US. What are holders thoughts in regards to the Market Cap versus the potential income? Will the future of the company have a brighter outlook after these results?

Thoughts and comments on #STFRR and tag me in @slarratt1

My thought of the week

How diversified is your portfolio? What do you see as diversification? Many people I know will only get involved within certain sectors ‘because it is all they know’… It is a shame that so many other stocks get missed by the masses that have potential going forward due to not understanding in other sectors. Think how much your investment strategy going forward is limited by not gaining knowledge in other sectors..

Share Talk round up

Interviews and updates

Share Talk presents: Why is it important to review all your trades? An article by Catherine Stott

Read the article here

Share Talk presents: The Higher the stock market, the more profits warnings there are. An article by Zak Mir

Read the article here

Share Talk presents our first ever investors evening at the Forest of Arden Marriot Hotel near Birmingham on the evening of Saturday 26th November hosted by Zak Mir featuring Metal Tiger PLC, Kolar Gold Ltd, Mkango Resources Ltd and Regency Mines PLC.

This event is supported by London South East, St Brides Partners and Mining Maven.

Read the details here

Thor Mining Plc (THOR)

Share Talk interviewed Mick Billing, CEO & Chairman of Thor Mining Plc about the recent assay results from the Molyhil Tungsten asset and what the future holds for the company.

Listen to the interview here

Kodal Minerals (KOD)

Share Talk spoke to Share Talk spoke to Kodal Minerals CEO Bernard Aylward about the change in focus towards Lithium assets in their portfolio. We talk about the recent acquisitions

Listen to the interview here

Fox Marble (FOX)

Share Talk spoke to Share Talk spoke with Chris Gilbert, Fox Marble’s CEO about the company announcement of the landmark venture formed in cooperation with the Government of Kosovo

Listen to the interview here

Strategic Minerals (SML)

Share Talk speaks to Strategic Minerals managing director John Peters. We talk about the company’s current cash producing assets based in New Mexico USA, the existing nickel sulphide projects in Australia and ask about Strategic Minerals new acquisition in Cornwall UK.

Watch the interview here

what’s on next…

Lots of messages asking for coverage on Oxford Pharmascience Group Plc – (OXP) so here it is…

Shares in Issue – 1,205,661,619

Mcap – £24m

Cash – £22.1m

Oxford Pharmascience is a drug development company that redevelops approved drugs using proprietary formulation technologies to make them better, safer and easier to take.

Since the company’s products incorporate previously approved drugs, this reduces risk and results in a simplified drug development regulatory pathway allowing less expensive development programs and faster access to market.

The Company’s pipeline is focused on pain relief and cardiovascular disease indications addressing unmet patient needs with significant commercial potential in global markets.

Its Board of Directors Includes Marcelo Bravo (CEO) Founder of Oxford Pharmascience and an entrepreneur Marcelo spent 16 years in R&D with The Procter & Gamble Company and subsequently spent 3 years in corporate development with Boots.

Pipeline

All products in Oxford Pharmascience’s pipeline target unmet patient needs with strong commercial potential in global markets and are supported with associated intellectual property and stringent proprietary science and preclinical/clinical data.

These products are created by combining proprietary formulation technology with proven, marketed drugs, resulting in reduced development risks and costs and a faster time to market.

The pipeline is focused on pain relief and cardiovascular disease indications, with lead programmes in NSAIDs (Ibuprofen, Naproxen, Diclofenac, Aspirin) and statins (Atorvastatin).

Funding

Oxford Pharmascience is fully funded with £22.1m from Institutional Investors.

80% of the company shares are held by long term Institutional Investors and Directors at a much higher price of 10p and above Including 33% held by Neil Woodford, major Pharmaceutical Investor

Directors also holding 30% between them.

Major Shareholders

Woodford Investment Managers      401,597,920      33.31%

Mr R Griffiths                                       173,071,097      14.35%

David Norwood                                    105,938,633      8.79%

Marcelo Bravo                                       65,000,000        5.39%

Southern Fox Investments Ltd          51,000,000        4.23%

Henderson Global Investors               49,400,000        4.10%

Octopus Investments                           42,140,345        3.50%

Aviva Investors                                     37,964,329        3.15%

Mr R Quested                                       37,247,753        3.09%

Highlights

Substantive progress in commercialisation discussions regarding the Company’s lead NSAID1 assets, OXPzeroTM Ibuprofen and OXPzeroTM Naproxen

Feedback has identified the key precursors to successful partnership outcomes, including:

additional platform development

clarity on regulatory pathway for over the counter (OTC) and Prescription (Rx) product approval Significant progress advancing the OXPzeroTM technology platform:

Improvement of drug release in vitro

Scale-up and optimisation of the manufacturing process

Strengthening of the intellectual property (IP) portfolio

Planning to conduct small-scale exploratory pharmacokinetic (PK) trials to validate the in vivo performance of formulation improvements, with details to be announced separately in due course

Ongoing dialogue including the initiation of broader outreach to include the Rx market

Proceeding to seek pre-IND meetings with the US FDA to clarify US regulatory pathway

License per product would mean £20-30m upfront payment, Further sales milestone payments and mid teen royalty payments, Gastric safe NSAID’s potential sales of over £500m

Marcelo Bravo, Chief Executive Officer, commented

We are very encouraged with the strong traction we are getting from some of the major potential partners in our discussions and we are also continuing to progress our other pipeline opportunities including Asprin and statins. Ibuprofen is currently the dominant NSAID molecule in the pain relief and anti-inflammatory sector with worldwide sales of Ibuprofen in excess of $5bn per annum. The Company has initiated contact with a number of large, global pharmaceutical companies with strategic interest in the ibuprofen market and is at an advanced stage of preparing information to proceed to the commercialisation phase with the OXPzeroTMIbuprofen asset.

A big thankyou to @liamdillon_liam for offering a write up on 

Tern Plc (TERN):

Tern is an AIM listed investment company looking for small tech start-ups that they can transform through funding and access to global management skills.

They have a number of small stakes in UK cloud and mobile technologies, but their most interesting investment is in a UK based cyber security company called Device Authority who offer security products for the fast growing IOT market. A report out today indicates that the market that they are aiming for will grow from $7billion today to $37 billion by 2021 at a CAGR of 36%.

Device Authority:

They were originally called Cryptosoft but acquired a Californian based security company called Device Authority in May 2016 and have adopted the name of the acquired company. Following the acquisition Tern own 57% of Device Authority. The other main shareholder is a US based VC company called Alsop Louie partners. There are offices in London and California.

The stated aim is to either sell or IPO. Upon sale the founders of Cryptosoft/Device Authority get 25% of the sale price with Tern getting 57% of the remainder. Current MC for Tern is £9MM which values Device Authority at just over £20MM. Other smaller investments are discounted here since there is nominal value in those until further details are revealed.

The original Device Authority won a Gartner cool vendor award in 2015 and Cryptosoft won a Gartner cool vendor award in 2016. Their combined technology has been consolidated into a product called Keyscaler™.

People:

The primary entrepreneurial brains behind Device Authority is Al Sisto. As COO of RSA security he was instrumental in a major change in their fortunes negotiating partnerships with IBM, Intel, Compaq, Cisco and Nortel. Since then he has successfully grown and sold a number of small IT companies. He is widely seen as a visionary within the IT security market.

There are 3 advisers. Samsung recently put one of their VP’s into Device Authority but it hasn’t yet been revealed what his role is there, but it is suspected that Samsung may take a stake in DA. The other interesting adviser is Dan McDuffie. He has a significant following within the US amongst telecoms and IOT businesses.

The market:

Various industry commentators forecast the market growing from 6 billion connected devices to between 25 and 50 billion devices by 2020 with that growth projected to continue for at least a decade beyond that. There has been a huge amount of M&A activity in  the IOT sector with all of the big IT players investing heavily to try to grab share.

The market can be split into a number of verticals.

• Automotive

• Energy and Utilities

• Healthcare

• Transportation and Logistics

• Smart Cities

• Industrial.

• Security Certificates

Al Sisto is on record as saying the traditional security products eg firewalls and antivirus try to put up a barrier around the perimeter of a companies IT assets. He is not alone in stating that these old techniques have limited capability against the threats that will come from IOT devices. This is because a hacker can use your Smart TV, Fridge etc to get into your home network. Indeed if you read reports from the recent DDOS attack on Dyn that took Twitter, Spotify, Netflix etc down for a number of hours you will see that this attack derived from hackers using connected security cameras and other connected devices to flood the site with spurious streams of data.

Al Sisto is on record as saying that Device Authority have first mover advantage and have a unique and patented product to deal with these issues.

The product.

The product basically provides encryption of the data from the device to the cloud. The challenge for the industry is to get a product that can scale to millions of devices and that ensures that data being sent and received is only coming from authenticated devices and is going to only those who need to see it.

Because of the complexities in doing this there are numerous articles that highlight security for the IOT as one of the most significant barriers to its success.

Device Authority believe they have overcome the scaling obstacles that hinder traditional security methods, and not only have they developed the technology to authenticate devices but they do so with the award winning and patented dynamic key technology ( this came from the original Device Authority ). Basically a new key is generated each time there is an interaction with the device. So this prevents spoofing ie the ability of someone to copy the key and to pretend to be either the device or the person wanting to get data from the device.

Current Status:

There has been very little information provided by Tern on the revenues that are coming in, and indeed they have only gone public with one contract for $100k per annum. However their product is sold as a SaaS model where a monthly subscription would be paid for its use, so the absence of large stated contracts should not be of significant concern.

It is the partnerships that they have built up over the last 18 months that catch the eye. They are partnered with Dell, IBM, Intel, Symantec, Thingworx, Digicert, Globalsign and Cumulocity to name but a few. At the moment they add about 2-3 partners per month and they have said that they expect that to accelerate in the coming quarter. Their stated strategy is to embed their product into the products of their partners and use their partners as force multipliers. Dell, Intel, IBM and Symantec are well known names so success with any one of these would be transformational. Thingwork ( owned by PTC ) has 27% of the IOT platform market and Device Authority are the only security product offered on their portal. Symantec, Digicert and Globalsign are 3 of the top 5 certificate authorities ( when you see https: on a website that indicates that the website has a security certificate ).

Research shows that security start-ups typically build themselves by stealth. This is probably no different for Device Authority and suggests that there is a lot more going on than has been made public. Al Sisto aims to take Device Authority to the ‘top of the pile’ and information in the public domain suggests that he might just do that. But even a small percentage of the overall market would see a very high valuation being put on Device Authority and hence Tern.

Risks:

Competition – there are a very small number of companies out there who claim to be able to secure the IOT, but there probably are one or two who might take some share. But interestingly PTC who own a security company called Axeda, and Symantec, who are one of the largest pure IT security companies in the world, and Intel ( who own McAfee ) and IBM and Dell who have their own security products are partnered with Device Authority.

Dilution – that is a real risk and indeed a recent significant placing at 7p ( share price now 9.5p ) to fund employment of additional sales and marketing and technical staff mean that future placings can’t be ruled out. However revenues although undeclared for now should be starting to accelerate. Thingworx have Device Authority in their top 10 providers so implies that there must be decent revenues coming in from that source.

Overall:

The people and the partners associated with Device Authority suggest that there is something very attractive in the technical offering. If Al Sisto achieves his goal of taking Device Authority to the ‘top of the pile’ then an eventual valuation of $1 billion should be achieved with ease. It is quite possible that any one of their partners could make a large offer, long before the revenues to justify that are achieved. There is a huge land grab going on at the moment in IOT so that scenario can’t be ruled out.

The author:

I suggest as always that readers research Device Authority through their website and look at the market projections for themselves.

Your thoughts and comments please on these new companies covered by Steve Shares

@PatientWinner87 has asked for a special mention of #PROX what newsflow is expected there? Recent gains have slowed down, is it still a good share?

Any news flow due soon in the stocks and shares that you are investing in? Let me know your thoughts and comments #stwon and tag me in @slarratt1 so I can know what is hot for news…

Linking Shareholders and Executives :Share Talk

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