Trader’s Café With Zak Mir: The Week In Small Caps, Sunday 19th February 2023

So, the FTSE 100 closed the week above 8,000. And once again, all the people who did not call it to record levels are asked to give the tuppence worth as to how / why it happened, when the economy is supposed to be in apocalypse mode. Obviously, it would be madness to ask anyone who did call the record and did understand, before it happened, why it could.

Author @ZaksTradersCafe

Fulcrum Metals, Creo and Clontarf

Of course, small-cap watchers have more important things on their minds, such as the potential return of liquidity, successful IPOs and some decent percentage share price rises. In fact, the week delivered a smattering of all three of these stock market goodies. We had the Fulcrum (FMET) IPO getting off to a decent start, there was Creo (CREO) proposing a minimum £25m raise, together with a £5.2m open offer at 20p, and Clontarf (CLON) bagged during the week.


But the riser on Friday that was particularly pleasing was dry eye treatment group OKYO Pharma (OKYO). I have liked the company for quite some time, for a number of reasons. The first is that my father was an eye surgeon, so I am aware what a breakthrough its OK-101 anti-inflammatory would be. Second is the background of CEO Gary Jacob, who has led in the U.S. pharma space at the top level. Finally, given that this is a topical treatment, the road to FDA approval / the market is much quicker and cheaper than it would normally be for your average ingested drug. The prize is to get the lion’s share of a multi-billion dollar dry eye market.

From an investor’s perspective, we see that OKYO is a decent way down the line on this journey. As recently as December it applied for U.S. FDA IND clearance. And of course, for any bears out there, remember that while it is the case that with many biotech companies, the journey to the clinic/pharmacy can be an expensive one, as this is a treatment for a nearly universal ailment, funding is not likely to be a problem. It was the above thinking that led me to suggest at the end of December when OKYO shares were 2.75p that the company was one to watch for 2023, with a 7p target. In fact, intraday Friday they hit 8p, boosted by heavy volume trade in the U.S. listing.

EDX Medical

One of the things that makes the rise/recovery in a stock like OKYO all the more pleasing, apart from delivering a pie in the face to the shorters, is that we all know how resources focused the UK market is. Another company which could be ready to be the exception that proves the rule in the biotech space is EDX Medical (EDX). This company stands out for a number of reasons, not least the founder, Professor Sir Chris Evans, who has decades of experience in the field. As far as the announcement this week was concerned, the deal to buy diagnostics testing group Torax, was through the issue of shares at 6p versus the present 3.75p. We are aware that appreciation of the acquisition is likely to be a slow burn affair, but hopefully this mention will be a decent marker.

Rogue Baron

Sticking on the AQUIS market, but moving away from the biotech space, and there was a decent reaction at Rogue Baron (SHNJ), where the shares were up 100% on the week. The trigger for this was NED buying in the form of Charlie Wood. What was of interest here is the way that director buying can be something of an unreliable indicator, taken by the market in some instances as a way of trying to artificially induce investor confidence. But in this case, investors look to have toasted the whiskey group’s latest announcement.

Jubilee Metals

Indeed, we were reminded how the market can be a little quirky regarding director buying with Jubilee Metals (JLP). Here there was a flurry of director buying after the company’s recent update, and subsequent share price dip. It would appear that the purchases here will prove to be correct, given that the issues described by the company are well and truly over, and that fixing them is likely to add to the bottom line going forward. Given the way that the group is a very handy cash generator anyway, it should be that the drop from a 2021 peak of nearly 22p, to below 9p this week is regarded as an over-reaction.

Harold Tillman / Hydrogen Utopia

Finally, most small caps would kill for a mention in the press, even if the influence of the papers is not quite what it used to be. This week saw a mention of Hydrogen Utopia (HUI) with its new ambassador fashion mogul Harold Tillman, CBE. The idea is that Tillman will make the fashion industry aware of the vast amount of plastic waste it produces, and with HUI’s technology use this to convert old clothes into hydrogen to power cars.

Author @ZaksTradersCafe

Disclaimer & Declaration of Interest
The information, investment views and recommendations in this article are provided for general information purposes only. Nothing in this article should be construed as a solicitation to buy or sell any financial product relating to any companies under discussion or to engage in or refrain from doing so or engaging in any other transaction. Any opinions or comments are made to the best of the knowledge and belief of the writer but no responsibility is accepted for actions based on such opinions or comments. Vox Markets may receive payment from companies mentioned for enhanced profiling or publication presence. The writer may or may not hold investments in the companies under discussion.

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