Monthly Archives: April 2015

ASX:MRY – Soon to be ASX:NOR – prospectus out

***Update***
15 April 2015

will be a new renaming of Monterey Mining to Norwood systems
the prospectus is out and 2c capital raising
I would either buy @ 2c prospectus or wait til the recapitalisation around early May

As always This column is the personal opinion of the writer and does not imply any stock recommendations or offer financial advice. Readers should do further research of their own or talk to their adviser before acting on themes in this article. All prices and analysis at the Date of publication at the top of the post

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ASX:LER – Leaf Resources – Turning Waste biomass into useful stuff cheaper than anyone else

ASX:LER
Leaf Resources
15 April 2015

Corporate Snapshot

Market Cap 19.2M (as of 15 April 2015) (20M fully diluted)
Share Price: $0.17
Cash @ Dec 14 $ 1.8 M

What do they do:
-own a patented technology for simple, innovate, low cost method of turning biomass into cellulosic sugars at a lower cost and cleaner sugars – call Glycell
-the sugars are the building blocks for many other bio based products (plastics, chemicals, fuels)
-35% cost advantage over other technologies
– Market for these bio based chemicals is expected to be $500B by 2017, Bio plastics $2B in 2011 (fossil based plastics is 75 times larger), Biofuels $83B in 2011
– lower cost cellulosic sugars improve economics against petroleum based chemicals
– virtually every petroleum based chemical can be replaced by biomass
– current worldwide bio waste is 5 Billion tonnes

Story so far
– has been listed since 2006 and developing the technology
– at a point now where it is starting to commercialise with production trials etc
– recently had a capital raising so it seems like they are in need of cash

Reasons to get on Board
– increasing shift away from fossil fuel products
– great technology
– no capex requirements – able to licence technology

Reasons to NOT get on board
– run out of cash
– can’t sell their product
– how will the bio products market fare over the coming years especially with low oil prices

My thoughts
still a very speculative buy but if they can get some key agreements in place and revenue coming in through the doors then it will propel the price

Verdict – Speculative buy at 15c-16c

As always This column is the personal opinion of the writer and does not imply any stock recommendations or offer financial advice. Readers should do further research of their own or talk to their adviser before acting on themes in this article. All prices and analysis at the Date of publication at the top of the post

ASX:NSR – National Storage REIT (storing away profits for later use)

ASX:NSR National Storage REIT

Corporate Snapshot

Market Cap 535M (as of 2 April 2015)
Share Price: $1.60
Cash @ Dec 14 $ 9.5 M

What do they do:

Own and Run self storage facilities

Story in my view
Even though this is on the larger end of the small cap scale I still believe this has room for growth and is more a long term buy
mainly due to the cyclical and boring nature of the business, They are the only listed self storage provider and if the USA is anything to go by there isn’t going to be any reduction in the stuff people are going to accumulate and as they accumulate more stuff they need a place to put it so why not put it in self storage.

– Listed for just over 16 months
– risen 60% in that period
– still relative infancy and room for growth

Reasons to get on Board
– Still Acquiring properties for self storage
– diversified storage provider (Geographically + as a business) (personal, business, wine, vehicle storage + packaging & truck hire)
– Fragmented industry (no real big players)
– scale/ cost savings
– 70% occupancy rate with NPAT of over 30% of Revenue
– plans to diversify into recycling
– FY 14 Calendar year earnings in the $22.9 M range
– there is also opportunity to grow internationally (if they ever decide to pursue that path)

Reasons to NOT get on board
– debt levels are around 23% (recent capital raising helped reduce it)

My thoughts is that it is currently price at PE 26 ish
with historical market averages being around the 14’s
although factoring in 8c distributions you are looking at so very steady returns

Verdict – Accumulate and Hold for Income and Long Term Capital gains